WEBVTT 1 00:00:00.640 --> 00:00:02.919 It isn't easy to launch a stable coin. 2 00:00:02.919 --> 00:00:05.200 You've seen a lot of people launch stable coins and 3 00:00:05.280 --> 00:00:07.599 it's hard for them to get to scale because there 4 00:00:07.639 --> 00:00:10.119 is an embedded network of that and so you have 5 00:00:10.199 --> 00:00:11.759 to think long and hard about whether you want to 6 00:00:11.800 --> 00:00:15.439 do it yourself or could you potentially use somebody else's 7 00:00:15.640 --> 00:00:19.359 or potentially do something that well, let's say the community coin, 8 00:00:19.839 --> 00:00:24.359 which is something we just launched last lead. 9 00:00:26.640 --> 00:00:29.160 This episode is brought to you by Uphold, which is 10 00:00:29.199 --> 00:00:31.920 one of the top crypto platforms in the industry. I've 11 00:00:31.920 --> 00:00:34.920 been a user of Upholds since twenty eighteen. They make 12 00:00:34.960 --> 00:00:37.640 it easy to buy, sell, and trade crypto. They have 13 00:00:37.719 --> 00:00:41.759 three hundred plus cryptocurrencies on their platform, which includes bitcoin 14 00:00:41.840 --> 00:00:44.399 in all the top all coins and folks. They do 15 00:00:44.520 --> 00:00:47.119 not commingle, They do not lend out your funds. They 16 00:00:47.119 --> 00:00:50.039 are one hundred percent reserved and you can review their 17 00:00:50.079 --> 00:00:53.119 transparency report, and they have a lot of great features 18 00:00:53.119 --> 00:00:55.920 that make it easy to execute your trades. They also 19 00:00:55.960 --> 00:00:59.240 have a great new producol us, the Interest Accounts, which 20 00:00:59.280 --> 00:01:02.399 allows you to your dry powder or your crypto profits 21 00:01:02.479 --> 00:01:06.079 and earn up to four point nine percent APY. Now 22 00:01:06.120 --> 00:01:09.079 the four point nine percent APY is only on balances 23 00:01:09.120 --> 00:01:12.400 over one thousand dollars below one thousand, it's two percent. 24 00:01:12.799 --> 00:01:17.000 But what's great about this product, guys, is there's no lockups, 25 00:01:17.040 --> 00:01:20.120 there's no monthly fees, there's no subscriptions, and best of all, 26 00:01:20.239 --> 00:01:23.319 it is FDIC insured, just like a bank. So if 27 00:01:23.319 --> 00:01:26.079 you'd like to learn more about Uphold, visit the link 28 00:01:26.239 --> 00:01:29.799 in the description. Welcome into the Thinking Crypto podcast. I'm 29 00:01:29.799 --> 00:01:32.920 your host, Tony Edward and my guest today is Charles Cascarillo, 30 00:01:32.959 --> 00:01:37.400 who's the CEO and co founder at Paxo's. Charles, welcome back, 31 00:01:37.439 --> 00:01:38.200 Good to see. 32 00:01:37.959 --> 00:01:40.599 You, great to be here. Thanks for having me. 33 00:01:41.079 --> 00:01:43.159 Charles. The last time we spoke, as we were talking 34 00:01:43.239 --> 00:01:47.359 before the recording, was in twenty twenty two. Very different environment, 35 00:01:47.480 --> 00:01:50.239 definite a different time in the market, right, but it 36 00:01:50.280 --> 00:01:54.000 seems brighter days are here and ahead of us. Are 37 00:01:54.040 --> 00:01:57.000 you surprised by the growth this acid class and industry 38 00:01:57.040 --> 00:02:00.040 has seen. With ETFs, the stable coing market is booming 39 00:02:00.079 --> 00:02:02.319 and much more well. 40 00:02:02.400 --> 00:02:05.599 I mean, things have changed dramatically in the last six 41 00:02:05.760 --> 00:02:08.120 or eight months, and I think what really kicked that 42 00:02:08.159 --> 00:02:13.080 off was the Bitcoin IPO, which is the ETF launching 43 00:02:13.280 --> 00:02:19.159 or ETF's launching and that really I think set the 44 00:02:19.199 --> 00:02:23.199 stage for bitcoin to become a traditional asset that could 45 00:02:23.240 --> 00:02:26.280 be held by institutions, and it kind of broke things 46 00:02:26.319 --> 00:02:28.400 open to a point where it'd be very hard to 47 00:02:28.520 --> 00:02:34.360 unwind at least bitcoin. But now we also had bitcoin 48 00:02:35.199 --> 00:02:39.759 ETFs and e ETFs that will be coming. And of 49 00:02:39.800 --> 00:02:43.560 course we've now had a change in administration, and this 50 00:02:43.680 --> 00:02:48.120 incoming administration is very receptive to crypto and it has 51 00:02:48.159 --> 00:02:53.080 taken a lot of least campaign positions that are very 52 00:02:53.120 --> 00:02:58.240 pro the industry. And so from the Bitcoin ETF through 53 00:02:58.360 --> 00:03:04.319 to a bottoming out of prices and move forward now 54 00:03:04.360 --> 00:03:08.680 to all time highs, lots of exciting projects, stable coins, 55 00:03:08.680 --> 00:03:11.599 continuing interaction all the way through to now with the campaign, 56 00:03:12.159 --> 00:03:15.280 there's just been a series of positive events that is 57 00:03:15.360 --> 00:03:20.000 really changing the backdrop and landscape for crypto, for businesses 58 00:03:20.039 --> 00:03:23.039 in crypto, and I think for the operating environment now 59 00:03:23.080 --> 00:03:23.879 in the United States. 60 00:03:24.400 --> 00:03:28.120 So Charles Paxos has been a leader in blockchain infrastructure 61 00:03:28.159 --> 00:03:31.599 and helping companies launch stable coins and much more. But 62 00:03:31.800 --> 00:03:34.400 since I would say twenty twenty two or even twenty 63 00:03:34.439 --> 00:03:37.120 twenty three, we've seen a lot of players enter to 64 00:03:37.159 --> 00:03:39.879 stable coin market, ripple is going to be around the 65 00:03:39.879 --> 00:03:42.879 corner of van k launched a stable coin. There's just 66 00:03:43.400 --> 00:03:47.039 a lot of different folks working on different things. You know, 67 00:03:47.159 --> 00:03:50.960 is stable coin if not the I wouldn't say the only, 68 00:03:51.000 --> 00:03:53.680 But is it the killer app of blockchain and crypto 69 00:03:53.719 --> 00:03:54.199 at the moment? 70 00:03:55.039 --> 00:04:00.479 Yes? The short answer is yes. The reality is everybody. 71 00:04:00.080 --> 00:04:03.840 Wants a dollar. The dollar is a killer product for 72 00:04:04.039 --> 00:04:08.759 payments and store value for the average person. Store value, 73 00:04:08.800 --> 00:04:11.240 I should say, of course, it depreciates over time, and 74 00:04:11.280 --> 00:04:13.560 that's why people on gold or want to on bitcoin. 75 00:04:13.879 --> 00:04:16.439 But for the average person anywhere in the world, the 76 00:04:16.560 --> 00:04:18.680 dollar is a much better currency than the one that 77 00:04:18.680 --> 00:04:22.120 they're using. And I think what's exciting about stable coins 78 00:04:22.240 --> 00:04:26.600 is we're going from solving the use case for crypto 79 00:04:27.000 --> 00:04:30.439 native people where you need a payment asset that moves 80 00:04:30.480 --> 00:04:34.759 twenty four to seven instantaneously, to solving payment use cases 81 00:04:34.959 --> 00:04:39.879 for the general society where they need dollars where they 82 00:04:39.920 --> 00:04:41.920 needed to move twenty four to seven. They need to 83 00:04:42.000 --> 00:04:44.959 move instantaneously, they need to move cheaply, they need to 84 00:04:45.000 --> 00:04:49.879 move programmably, and stable coins to me, really are that 85 00:04:50.040 --> 00:04:53.240 killer app. It's used every single day, it's used in 86 00:04:53.279 --> 00:04:57.079 wholesale it's used in retail. It's been used in eighty 87 00:04:57.079 --> 00:05:00.680 percent of FX transactions, the dollars on one side of 88 00:05:00.720 --> 00:05:05.000 the transaction. So it's really the lingual fronca, if you will, 89 00:05:05.240 --> 00:05:09.160 of the financial system. And so having stable coins begin 90 00:05:09.279 --> 00:05:13.000 to move from cryptal use cases to everyday use cases, 91 00:05:13.000 --> 00:05:18.199 to remittances, to payments to people who are living in 92 00:05:18.199 --> 00:05:20.920 countries where you can't get dollar bank accounts is a 93 00:05:20.959 --> 00:05:25.319 tremendous innovation. And you're just at the very beginning, because 94 00:05:25.560 --> 00:05:28.519 you're talking about not just one hundreds of billions, but 95 00:05:28.560 --> 00:05:31.279 you're really talking about tens of trillions of dollars. If 96 00:05:31.319 --> 00:05:34.720 you look forward five or ten years, it's hard to 97 00:05:34.720 --> 00:05:37.920 imagine a world where stable coin is not the mechanism 98 00:05:38.439 --> 00:05:41.800 for any FIAC currency to move. Now, maybe that would 99 00:05:41.839 --> 00:05:44.879 be stable coins as we understand them today, it could 100 00:05:44.920 --> 00:05:48.439 be cbdc's, it could be something completely different, but it's 101 00:05:48.439 --> 00:05:53.079 going to be an open system for moving payments because 102 00:05:53.279 --> 00:05:56.800 nobody wants the financial system that's stuck on the entrontete. 103 00:05:58.000 --> 00:06:00.399 They want a financial system that's operating on the int 104 00:06:00.480 --> 00:06:03.680 and that's what blockchain enables is a safe, secure financial 105 00:06:03.680 --> 00:06:06.959 system operating in an open way like the Internet, and 106 00:06:07.279 --> 00:06:09.639 that is a real game changer, and stable coins are 107 00:06:10.160 --> 00:06:12.600 the mechanism to create that change. 108 00:06:12.800 --> 00:06:15.839 Absolutely, And Charles, I'm sure you've seen and heard about this, 109 00:06:15.920 --> 00:06:18.759 but it seems there's more dialogue in DC now as 110 00:06:18.800 --> 00:06:21.680 to the importance of a US dollar back stable coin 111 00:06:21.800 --> 00:06:25.879 or stable coins in preserving the world reserve currency status, 112 00:06:25.920 --> 00:06:28.879 which is the US dollar. What do you think about 113 00:06:28.920 --> 00:06:32.160 those conversations that are, you know, kind of unfolding now. 114 00:06:33.439 --> 00:06:35.720 I think it's very important. I think it's an important 115 00:06:35.759 --> 00:06:44.199 recognition that stablecoin holders have more US dollar debt than say, 116 00:06:44.199 --> 00:06:49.560 Saudi Arabia. I mean, that's enormous statement. It's up I 117 00:06:49.600 --> 00:06:52.639 think maybe sixteen or seventeen now in terms of the 118 00:06:52.759 --> 00:06:53.879 largest holder would. 119 00:06:53.680 --> 00:06:56.480 The stable coin if it's tect them as one holistic group. 120 00:06:57.040 --> 00:07:00.240 And I think that's important because the US is sharing 121 00:07:00.279 --> 00:07:03.240 a lot of debt and it needs holders of that debt. 122 00:07:03.439 --> 00:07:06.680 And central banks generally around the world are selling US debt. 123 00:07:07.639 --> 00:07:10.720 But central bank selling is not an indication of the 124 00:07:10.800 --> 00:07:15.720 demand for US dollars. Retail and even wholesale. There's more 125 00:07:15.759 --> 00:07:20.279 demand than ever for US dollars. The average person wants dollars, 126 00:07:20.279 --> 00:07:22.600 they can't get it and the reason is the fictional 127 00:07:22.639 --> 00:07:25.600 banking system is operating like the post office. It takes 128 00:07:25.680 --> 00:07:28.560 days and days and days for dollars to move, and 129 00:07:28.600 --> 00:07:31.560 it's high fees. And that doesn't make any sense because 130 00:07:31.839 --> 00:07:34.279 all electronic dollars sit in the bank. We're not trying 131 00:07:34.319 --> 00:07:34.720 to move. 132 00:07:34.600 --> 00:07:35.600 Around physical cash. 133 00:07:35.639 --> 00:07:37.639 Why is it taking as long as a physical movement 134 00:07:37.680 --> 00:07:39.000 mechanism like the post office? 135 00:07:39.240 --> 00:07:42.720 But it is. And really, blockchain. 136 00:07:42.240 --> 00:07:45.959 Is now enabling your money to move at the speed 137 00:07:46.000 --> 00:07:49.199 of the internet, just like anything else. Now, don't get 138 00:07:49.199 --> 00:07:53.199 me wrong. Money is valuable and is regulated, and so 139 00:07:53.519 --> 00:07:54.720 you have to have an. 140 00:07:54.680 --> 00:07:56.160 Overlay that's put into place. 141 00:07:56.439 --> 00:08:00.680 But fundamentally, it's just like moving an email, and you 142 00:08:00.720 --> 00:08:03.240 can put the right structures in place so that it 143 00:08:03.279 --> 00:08:06.839 can move like an email yet have other protections. And 144 00:08:07.199 --> 00:08:09.519 the way the banking system and a payment system is 145 00:08:09.560 --> 00:08:12.800 operating today, that's not the case. And we've put certain 146 00:08:12.839 --> 00:08:15.439 abstractions in place, but generally, if you want to move 147 00:08:15.480 --> 00:08:18.480 money overseas, it's many days. And if you want to 148 00:08:18.560 --> 00:08:22.639 move money between someone who doesn't have a bank account 149 00:08:22.639 --> 00:08:25.079 and you, you're going to pay big fees because there's 150 00:08:25.079 --> 00:08:28.439 remittances and last miles. The way it works today is 151 00:08:28.600 --> 00:08:31.000 anybody with a smartphone can now have a wault. 152 00:08:32.320 --> 00:08:34.840 And the fascinating thing is, in fifteen. 153 00:08:34.519 --> 00:08:38.600 Years, the penetration rate of smartphones is eighty five percent 154 00:08:38.600 --> 00:08:44.360 of the world's population. Meanwhile, underbanked and unbanked people still 155 00:08:44.440 --> 00:08:48.039 represent about forty tho's somewhere around thirty five to forty 156 00:08:48.080 --> 00:08:48.639 percent of. 157 00:08:48.559 --> 00:08:49.440 The world's population. 158 00:08:49.840 --> 00:08:53.039 So the penetration rate of smartphones is now higher than 159 00:08:53.440 --> 00:08:56.200 people getting out of put banking services, and banking has 160 00:08:56.240 --> 00:08:59.200 been around for centuries, and it just shows you the 161 00:08:59.320 --> 00:09:03.399 distribution mechanism for US dollars has not kept up with 162 00:09:03.519 --> 00:09:04.039 the demand. 163 00:09:04.519 --> 00:09:07.200 People want the product in a different way. 164 00:09:07.360 --> 00:09:09.639 And by the way, if the US dollar doesn't provide that, 165 00:09:09.879 --> 00:09:11.519 people are gonna have to go get it somewhere else 166 00:09:11.639 --> 00:09:14.000 because the demand is so much. That's where people might 167 00:09:14.080 --> 00:09:16.679 use digitized goal, or they use bitcoin, or they can 168 00:09:16.840 --> 00:09:20.559 use a CBDC from China or some other country. People 169 00:09:20.759 --> 00:09:24.440 need a payment mechanism that can solve the problems in 170 00:09:24.440 --> 00:09:27.440 their daily lives, and the way the dollars operate today 171 00:09:27.480 --> 00:09:28.200 it doesn't do that. 172 00:09:28.519 --> 00:09:31.720 But stable points offer the capacity for the dollar to 173 00:09:31.759 --> 00:09:32.879 do that, and. 174 00:09:32.759 --> 00:09:35.960 That's really positive for the dollar in general, you know 175 00:09:36.000 --> 00:09:38.440 you have to have distribution for a great product, otherwise 176 00:09:38.840 --> 00:09:40.480 you know you're going to fall behind and you're going 177 00:09:40.519 --> 00:09:42.600 to face the innovator's je Lama and someone's going to 178 00:09:42.679 --> 00:09:44.039 come in and they're going to disrupt you. 179 00:09:44.799 --> 00:09:47.440 Yeah. Absolutely, well put and you know we're headed to 180 00:09:47.480 --> 00:09:49.840 a more digital world, not a less digital world. And 181 00:09:50.080 --> 00:09:53.519 to your point smartphone penetration. I've seen people in developing 182 00:09:53.559 --> 00:09:55.519 countries that have a smartphone. They don't even have a computer, 183 00:09:55.600 --> 00:09:59.080 but have a smartphone. And the way people transact now 184 00:09:59.080 --> 00:10:02.320 it's digital payment. They want fast, cheap, easy to use 185 00:10:02.360 --> 00:10:05.320 and obviously there's a demand for the World Reserve currency. 186 00:10:05.440 --> 00:10:08.840 So you're spot on there. What are your thoughts on 187 00:10:09.080 --> 00:10:11.759 stable coin legislation that is being worked on here in 188 00:10:11.799 --> 00:10:14.200 the United States? We saw the EU pass a version 189 00:10:14.320 --> 00:10:17.120 that kind of disrupted a bit of what Tether was 190 00:10:17.120 --> 00:10:19.559 doing there and they're positioning in the EU. What are 191 00:10:19.600 --> 00:10:20.519 your thoughts and all of that. 192 00:10:21.480 --> 00:10:25.559 Well, the US has a number of different bills on 193 00:10:25.639 --> 00:10:30.799 the stable coin side, some in the Senate and one 194 00:10:30.840 --> 00:10:34.240 that has passed through the House Financial Services Committee, and 195 00:10:34.559 --> 00:10:36.679 that one is something that was very strong in support 196 00:10:37.080 --> 00:10:40.879 and it creates a steal a clear state pathway for 197 00:10:41.159 --> 00:10:42.919 firms to issue stable coins. 198 00:10:43.440 --> 00:10:44.279 The reason I think. 199 00:10:44.120 --> 00:10:48.320 That is so important is because fundamentally, stable coins are 200 00:10:48.360 --> 00:10:51.879 really not risky, and they're really not all that scary. 201 00:10:52.440 --> 00:10:55.240 There are six point six trillion dollars of money market fonts. 202 00:10:56.000 --> 00:11:00.000 There's also six point three trillion dollars of banking assets 203 00:10:59.840 --> 00:11:00.919 that doesn't. 204 00:11:00.600 --> 00:11:02.960 Even go to a Federal Reserve regulated institution. 205 00:11:03.440 --> 00:11:06.320 So you have thirteen trillion dollars of either money market 206 00:11:06.320 --> 00:11:11.639 funds or banking assets that doesn't have Federal Reserve oversight, 207 00:11:12.080 --> 00:11:16.200 and yet everything is fine, and stable coins are safer 208 00:11:16.279 --> 00:11:18.519 than money market funds, at least when you issue them 209 00:11:18.559 --> 00:11:21.639 like TAXOS does, through a trust company or a ring 210 00:11:21.720 --> 00:11:24.720 fence issuer, like we do in both ABADAVII and Singapore. 211 00:11:24.919 --> 00:11:28.159 That means if anything happens to paxos, your assets can 212 00:11:28.200 --> 00:11:32.519 return to you immediately. They are separate from our operating business. 213 00:11:32.759 --> 00:11:37.360 They are held in client name, bankruptcy protected. Something happens, 214 00:11:37.440 --> 00:11:41.039 you get it returned, and that's safer than any other 215 00:11:41.080 --> 00:11:44.039 type of financial asset, and so it's safe for that. 216 00:11:44.080 --> 00:11:46.759 A money market fund doesn't exist today, and it's certainly 217 00:11:46.799 --> 00:11:49.120 safer than having money in the bank where you only 218 00:11:49.159 --> 00:11:51.919 are protected up to your FDIC insurance loan. So there's 219 00:11:51.960 --> 00:11:55.159 thirteen trillion dollars and they're not overseen by the FED. 220 00:11:55.399 --> 00:11:58.000 We don't think that stable coins need to be overseen 221 00:11:58.080 --> 00:11:59.919 by the FED. They just need to make sure that 222 00:12:00.120 --> 00:12:02.960 you have a clear set of frameworks that everyone has 223 00:12:03.000 --> 00:12:06.879 to follow, like Singapore has done, like Abudabi is done, 224 00:12:06.919 --> 00:12:09.919 like New York has done, because buying key bills and 225 00:12:09.919 --> 00:12:12.559 putting them in a vault is about the safest thing 226 00:12:12.559 --> 00:12:15.039 in the world, and then taking those tea bills and 227 00:12:15.720 --> 00:12:19.200 creating a stable coin on a blockchain is also really 228 00:12:19.279 --> 00:12:23.679 very simple to do, especially if you have an oversight 229 00:12:23.960 --> 00:12:27.840 from a regulator and if you're following the right reserve requirements. 230 00:12:27.840 --> 00:12:28.679 All the things you need to do. 231 00:12:29.200 --> 00:12:32.600 Now, Europe has codified legislation as well, as you point 232 00:12:32.600 --> 00:12:35.000 it out, and that's something that we're also going to 233 00:12:35.039 --> 00:12:39.039 comply with. What's unique about Paxos is that we have 234 00:12:39.120 --> 00:12:42.000 a primary regulator that oversees each one of our stable 235 00:12:42.039 --> 00:12:45.480 coins in New York, in Singapore, or abad Abi, and 236 00:12:45.519 --> 00:12:49.159 that's not true for either Circle or Tether. I'm not 237 00:12:49.200 --> 00:12:51.200 saying that there's something wrong with their product. It's just 238 00:12:51.200 --> 00:12:53.879 that they don't have a regulator, they don't have a 239 00:12:53.879 --> 00:12:56.519 regular that oversees the issuance. So that makes it a 240 00:12:56.519 --> 00:12:59.720 little bit trickier when you're trying to comply with different 241 00:12:59.799 --> 00:13:03.120 j stiction's rules, because you've got to follow the rules 242 00:13:03.279 --> 00:13:06.080 of your home regulator, and then you also want to 243 00:13:06.120 --> 00:13:08.320 follow the rules of a regulator in the market that 244 00:13:08.360 --> 00:13:12.240 are operating in, and so we're working on that. I 245 00:13:12.240 --> 00:13:15.840 think it's good to have a set of rules, you know, 246 00:13:15.919 --> 00:13:18.639 I think certain ones were more supportive of than others. 247 00:13:18.879 --> 00:13:21.360 But from the very beginning we've been regulated. 248 00:13:22.159 --> 00:13:23.799 We've first got a New York Trust all the way 249 00:13:23.799 --> 00:13:25.840 back in May twenty fifteen, the first trust in the 250 00:13:25.879 --> 00:13:29.559 whole country that was approved to operate in crypto watching. 251 00:13:29.879 --> 00:13:32.360 So we've clearly asked. 252 00:13:32.120 --> 00:13:35.039 For permission, not for forgiveness, and we've not just done 253 00:13:35.039 --> 00:13:37.240 that in the US and around the world. 254 00:13:36.799 --> 00:13:38.919 And so we're all for it. But you know, not 255 00:13:39.080 --> 00:13:44.519 all regulation is created equal. Not all regulation promotes a. 256 00:13:44.240 --> 00:13:46.519 Healthy functioning market, and that's what we want to make 257 00:13:46.559 --> 00:13:47.240 sure exists. 258 00:13:48.080 --> 00:13:50.399 Talk to us a bit about the issuance process and 259 00:13:50.399 --> 00:13:53.360 what the regulators want to see is a kyc AML. 260 00:13:53.759 --> 00:13:56.960 Also that you have the respective reserves and there's a 261 00:13:57.000 --> 00:13:58.799 one to one correlation, so to speak. 262 00:13:59.840 --> 00:14:02.559 I think those are the key outlines. They also want 263 00:14:02.600 --> 00:14:04.440 to make sure you have the right operational procedures. So 264 00:14:06.000 --> 00:14:07.279 what are in your reserves? 265 00:14:07.919 --> 00:14:10.799 How are you making sure that those reserves equal the 266 00:14:10.879 --> 00:14:14.600 number of tokens, so it's one to one, backed and 267 00:14:14.759 --> 00:14:20.320 backed by what and back where what jurisdictions are held in. 268 00:14:20.720 --> 00:14:23.759 And then when you have customers using the product, who 269 00:14:23.799 --> 00:14:26.159 are those customers and what are they using it for? 270 00:14:27.000 --> 00:14:28.440 And these are the key components. 271 00:14:28.440 --> 00:14:30.840 And then how do you make sure that operationally you 272 00:14:30.879 --> 00:14:35.279 can handle different types of risks that might arise, whether 273 00:14:35.399 --> 00:14:38.240 for redemptions or creations, for. 274 00:14:40.480 --> 00:14:42.399 Hot minting and cold minting, et cetera. 275 00:14:42.799 --> 00:14:45.320 So there's a whole number of things that you have 276 00:14:45.399 --> 00:14:48.600 to do for what seems like a relatively simple product. 277 00:14:48.639 --> 00:14:50.039 And of course you need to make sure that you're 278 00:14:50.080 --> 00:14:51.320 monitoring your. 279 00:14:51.159 --> 00:14:55.840 Asset is maintaining its PEG even out in the broader ecosystem. 280 00:14:56.120 --> 00:14:59.320 And so that's a whole process that's, you know, takes 281 00:14:59.480 --> 00:15:00.720 a lot ofication to. 282 00:15:00.639 --> 00:15:03.279 Do it right. We've done it more than anybody. 283 00:15:04.159 --> 00:15:08.159 We've now issued six different regulated stable coins on different kinds, 284 00:15:08.159 --> 00:15:10.639 and we even tokenized US equities in the past. So 285 00:15:10.720 --> 00:15:14.639 we've done so much to build a lot of credibility 286 00:15:15.559 --> 00:15:18.120 around how to do this, and I think that's part 287 00:15:18.120 --> 00:15:19.320 of the reason why we were able to go in 288 00:15:19.360 --> 00:15:23.200 and really have a good influence on the policy making process. 289 00:15:23.679 --> 00:15:28.600 But all regulators are concerned with some version of you know, reserves, 290 00:15:29.639 --> 00:15:31.279 issuance customers. 291 00:15:32.559 --> 00:15:35.360 Earlier, you mentioned that this stable point in the market 292 00:15:35.360 --> 00:15:38.679 doesn't necessarily need to have federal reserve oversight. But do 293 00:15:38.759 --> 00:15:42.000 you think here in the United States that because there's 294 00:15:42.000 --> 00:15:45.000 so much control of the currency and the world being 295 00:15:45.000 --> 00:15:48.200 the role of reserve currency as well, that they may 296 00:15:48.240 --> 00:15:51.600 want to plug in to your infrastructure or even to 297 00:15:51.679 --> 00:15:55.039 different blockchains to monitor this so they know where the 298 00:15:55.120 --> 00:15:57.600 currency is going, how it's moving around the world, and 299 00:15:57.600 --> 00:16:00.440 so forth. Once again, from the government's point of I 300 00:16:00.480 --> 00:16:03.200 don't personally agree with her, but you know, I'm thinking 301 00:16:03.240 --> 00:16:06.200 about the Treasury and Janet Yellen and these folks, right, 302 00:16:07.000 --> 00:16:09.039 maybe part of the problem why they were trying to 303 00:16:09.039 --> 00:16:12.480 slow down crypto through regulators is they don't they have 304 00:16:12.519 --> 00:16:14.759 a blind spot. They don't know where the currency is going. 305 00:16:15.840 --> 00:16:18.399 Yeah, well, look, ultimately the US government is the issue 306 00:16:18.480 --> 00:16:20.759 or of dollars, and it makes sense that they want 307 00:16:20.759 --> 00:16:23.000 to know where the dollars are being used. That's a 308 00:16:23.039 --> 00:16:27.720 liability of the US government enough taxpayers, and so you know, 309 00:16:27.799 --> 00:16:32.080 there's pros and cons around the government being able. 310 00:16:31.919 --> 00:16:34.000 To see where payments are and what they're doing. 311 00:16:35.440 --> 00:16:38.799 That's a different debate from US as an issuer, and 312 00:16:39.039 --> 00:16:41.879 not necessarily you know one that is something that we 313 00:16:41.879 --> 00:16:44.080 should even be weighing in on. And so we'll follow 314 00:16:44.120 --> 00:16:47.600 the right rules around what should the government know, how 315 00:16:47.600 --> 00:16:52.120 do you share information, howpan they see information and aggregates, 316 00:16:52.200 --> 00:16:55.879 and we'd of course be happy to make that available 317 00:16:56.080 --> 00:16:57.639 if that's what is required. 318 00:16:58.080 --> 00:17:00.600 And I think having information sharing totably fine. 319 00:17:00.639 --> 00:17:02.159 I think there are things the FED could do, like, 320 00:17:02.200 --> 00:17:07.799 for instance, allowing issuing firms to have master accounts of 321 00:17:07.839 --> 00:17:10.599 the FED, which would be like inquidement having a bank account, 322 00:17:10.720 --> 00:17:12.680 but having a bank account of the FED. But you 323 00:17:12.759 --> 00:17:14.720 just can't go into debt. I mean, we can't be 324 00:17:14.839 --> 00:17:17.319 borrowing from the FED, but you could have a bank 325 00:17:17.319 --> 00:17:19.920 account there and they there are other countries that have 326 00:17:20.000 --> 00:17:24.000 done that for non bank payment service providers. It's a mouthful, 327 00:17:24.079 --> 00:17:25.920 but for instance, the Bank of England has done that 328 00:17:25.920 --> 00:17:28.920 where Revolute has an account there, and you know, you 329 00:17:28.960 --> 00:17:31.200 could do that and the FED could see then all 330 00:17:31.279 --> 00:17:33.279 of the reserves because they'd be sitting in their own 331 00:17:33.319 --> 00:17:36.160 bank account against what you're issuing, and it'd be very 332 00:17:36.160 --> 00:17:37.079 simple for them to. 333 00:17:37.000 --> 00:17:38.599 Make sure that you're maintaining the peg. 334 00:17:38.880 --> 00:17:42.920 Your liquidity would be perfect, your maturity profile would be 335 00:17:42.960 --> 00:17:45.839 exactly perfect. You know, but at the end of the day, 336 00:17:46.240 --> 00:17:48.640 if a stable point issue. We like ourselves and for instance, 337 00:17:48.640 --> 00:17:50.720 we had a stable point that twenty five billion dollars 338 00:17:50.720 --> 00:17:53.200 out of standing at its peak, and we were able 339 00:17:53.200 --> 00:17:55.400 to redeem six billion dollars in one day or five 340 00:17:55.440 --> 00:17:58.440 or six five billion dollars one day. So you run 341 00:17:58.480 --> 00:18:00.920 the right profile, you can manage is it's not all 342 00:18:00.960 --> 00:18:04.359 that complex. You own t bills or overnight repo over 343 00:18:04.400 --> 00:18:07.200 clouds by treasuries, and you have an issuance and you know, 344 00:18:07.319 --> 00:18:10.039 people can see what it is. We publish down to 345 00:18:10.039 --> 00:18:13.599 the QSIP number. You can literally see the exact security 346 00:18:13.640 --> 00:18:16.880 that we own. We publish that monthly. You know, it 347 00:18:16.880 --> 00:18:18.640 could be done more frequently. I don't know if that's 348 00:18:18.680 --> 00:18:21.759 necessarily practical, but anyways, you know, you just can be 349 00:18:21.880 --> 00:18:25.799 extremely transparent, and of course it's not a blockchain, so 350 00:18:25.839 --> 00:18:26.960 that's all public as well. 351 00:18:27.960 --> 00:18:30.960 So there's just a lot of logic to stable coins. 352 00:18:30.960 --> 00:18:37.279 And I think another thing to really impress upon listeners 353 00:18:37.279 --> 00:18:42.519 here is the stable point market is clearly gaining product traction, 354 00:18:42.599 --> 00:18:46.559 but it's also clearly very early. What chain is going 355 00:18:46.599 --> 00:18:50.359 to scale to the sidal wide level. Nobody knows, None 356 00:18:50.359 --> 00:18:53.720 could right now, So nobody really knows. What could you 357 00:18:54.200 --> 00:18:56.640 want to use an L one or an L two? 358 00:18:56.640 --> 00:18:58.039 Do you create netting layers? 359 00:18:58.359 --> 00:18:58.559 You know? 360 00:18:58.559 --> 00:19:01.240 How are you going to move trailllions and trillions and 361 00:19:01.480 --> 00:19:07.160 trillions of dollars in transaction every single day? I don't 362 00:19:07.200 --> 00:19:09.559 think we have the right answer for that, yes, but 363 00:19:09.599 --> 00:19:12.319 I can tell you the private market is going to 364 00:19:12.359 --> 00:19:14.720 iterate and figure that out and feel the need to 365 00:19:14.720 --> 00:19:19.839 solve customer problems much better than a mature organization that 366 00:19:20.160 --> 00:19:24.400 has historically not innovated at the speed with which the 367 00:19:24.440 --> 00:19:28.200 market is moving. And that's why you need the private sector. 368 00:19:28.480 --> 00:19:32.440 That's why you need staplepoint issuers. But why you also 369 00:19:32.480 --> 00:19:35.319 want to have a regulatory framework that creates a set 370 00:19:35.319 --> 00:19:37.319 of rules but doesn't stifle innovation. 371 00:19:38.119 --> 00:19:41.480 Absolutely. Now you mentioned you know the different l ones 372 00:19:41.519 --> 00:19:43.400 and so forth. Last time we spoke, I know you 373 00:19:43.400 --> 00:19:46.640 guys were primarily using Ethereum as your l one to 374 00:19:46.920 --> 00:19:49.680 issue these stable coins. Have you expanded to other blockchains 375 00:19:49.680 --> 00:19:50.839 like Solana and so forth? 376 00:19:51.759 --> 00:19:52.559 We have expected. 377 00:19:52.599 --> 00:19:57.680 We have expanded to Solana, Arbitrum, We're working on a 378 00:19:57.720 --> 00:20:01.440 Stellar and Polygon. There's a a whole number of chains 379 00:20:01.680 --> 00:20:04.160 that we're going to be issuing on over the next 380 00:20:04.440 --> 00:20:05.519 six and twelve months. 381 00:20:06.480 --> 00:20:08.240 You know, there's always a tension. 382 00:20:07.920 --> 00:20:11.039 Between issuing on the chain versus making sure that there's 383 00:20:11.119 --> 00:20:13.880 enough activity on that chain to warrant all the controls 384 00:20:13.920 --> 00:20:16.839 they need to put into place. And again, because we're regulated, 385 00:20:16.839 --> 00:20:20.039 we go to our regulators and we talk to them 386 00:20:20.039 --> 00:20:24.720 about the chain. We get it approved as an issuance mechanism, 387 00:20:25.160 --> 00:20:28.200 you know, And that's different from a regulator along someone 388 00:20:28.200 --> 00:20:29.519 to own the token of the chain. 389 00:20:30.119 --> 00:20:32.680 This is about enabling issuance onto a chain. 390 00:20:33.319 --> 00:20:38.039 And I do think that, you know, it should probably 391 00:20:38.039 --> 00:20:41.000 be a little bit easier to issue regulated dollars on 392 00:20:41.119 --> 00:20:41.799 more chains. 393 00:20:42.359 --> 00:20:43.039 We just saw a. 394 00:20:43.000 --> 00:20:45.359 Bid all get issued on a whole number of different 395 00:20:45.440 --> 00:20:47.720 chains as an example, and I think that makes sense. 396 00:20:47.759 --> 00:20:50.720 You know, Tether and Circle are on all kinds of chains. 397 00:20:51.480 --> 00:20:53.599 But again, they don't have a regulator that they have 398 00:20:53.720 --> 00:20:56.200 to go to in order to get approval. We do, 399 00:20:56.480 --> 00:20:59.640 and so that is oftentimes really the gating factor for us, 400 00:21:00.279 --> 00:21:02.640 making sure that all of the investments we have to 401 00:21:02.680 --> 00:21:06.960