Money Code
The future of finance is digital. Welcome to Money Code, the show that decodes stablecoins and the evolution of programmable money for builders, investors, and decision-makers. Each week, join hosts Chuk Okpalugo, Author of Stablecoin Blueprint and Raj Parekh, Head of Payments/Stablecoins at Monad Foundation as they break down the systems and strategies of seasoned operators in the space, revealing the insights you need for better build and buy decisions.
Money Code
Breakdown of BVNK’s journey from $0 to $20b in payment volume w Chris Harmse
In this episode of Money Code, hosts Chuk Okpalugo and Raj Parekh discuss the evolving landscape of stablecoins and their impact on the financial sector with Chris Harmse, co-founder of BVNK. The conversation covers the significant growth in stablecoin payment volumes, the importance of crafting effective stablecoin strategies for enterprises, and the challenges faced in consumer payments. Chris shares insights on the future of stablecoins, regulatory considerations, and the need for abstraction in blockchain payments to drive adoption. The episode concludes with reflections on customer insights and the path towards achieving a trillion-dollar payment volume.
Takeaways
Stablecoins are experiencing rapid growth, with BVNK hitting $20 billion in annualized payment volume.
Enterprises are increasingly moving from curiosity to implementation of stablecoin strategies.
The key to successful stablecoin adoption is to start with one use case and build from there.
Stablecoins are becoming essential infrastructure for new fintech products.
Consumer payments face challenges such as chargebacks and refund mechanisms that need to be addressed.
Regulatory clarity is crucial for the growth of stablecoins in various markets.
Local regulations may impact the adoption of stablecoins, especially in emerging markets.
The future of stablecoins will depend on mainstream consumer payments and point-of-sale solutions.
Abstraction of blockchain complexity is necessary for traditional players to enter the market.
The acceleration of enterprise interest in stablecoins is a positive sign for the industry.
About Stablecon
Stablecon (https://stablecon.com/) is the premier gathering for those at the intersection of DeFi, economic policy, financial infrastructure, and institutional integration, and those reinventing global commerce.
By convening the brightest minds in fintech and crypto, Stablecon provides attendees with world class thought leadership and fosters unparalleled networking and strategic collaboration across the digital payments industry. Whether you’re building, advising, or navigating this new frontier, this is the room where it happens.
About BVNK
BVNK is the leading provider of stablecoin payments infrastructure, helping businesses move money faster, settle globally, and even launch their own stablecoin products. Head to https://bvnk.com/ to learn more.
Connect with the Hosts & Guest
Chuk Okpalugo: LinkedIn, X, stablecoinblueprint.com
Raj Parekh: LinkedIn, X, monad.xyz
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And and when we built products, there was this ethos around making blockchain payments as easy as bank payments. So our kind of core business is taking stablecoin payments and stable coin payments infrastructure to trad fire businesses. They don't know anything about it, they understand traditional payment systems. So you gotta actually abstract all that complexity of chain, gas fee optimizations, what is a wallet, how does key management work? We take care of all of that complexity because we found it is just too complex. You want to get off the starting block if someone comes in there and says, hey, let's get going, and tries to figure out what a UTXO blockchain is and an EVM chain and then try to build into Solana.
Chuk:This is Money Code. It's a show where we decode stable coins and programmable money so that you can better prepare for an on-chain future. I'm Chuck Occupy, your host and author of Stablecoin Blueprint, and I'm here with my co-host Raj Perek, head of stablecoins and payments at Monad. How are you doing today, Raj?
Raj:I'm good. This is a good one today.
Chuk:Yes, but today we are joined by Chris Harms, co-founder and chief business officer of BVNK and one of the partners that makes this show possible. How are you doing, Chris?
Chris:Uh really good.
Chuk:Uh good to be with both of you, Chuck and Raj. I'm excited. So just before we get started, a quick little disclaimer here. Money code is brought to you by Stablecoin Media and powered by BVNK. The views and opinions of the hosts and guests are their own and may not represent their companies. Nothing we discussed today constitutes investment advice or any other form of advice. Right now, with that out of the way, Chris, so many folks know BVNK. BVNK has been hitting the headlines over the last nine months with huge partnerships with key players in the space, investment from Visa and so on. As the stablecoin payment space has grown, lots of folks are realizing, okay, there's there's real volumes here. There's billions of dollars annualized across a range of different firms. Um but I thought what would be really interesting to start with is understanding where is this volume coming from. So maybe you could just help frame the audience with you know, who are the main customer segments that you're serving? What are the most compelling ways that they're using stablecoin payments today to kind of ground the audience and where this adoption really is happening?
Chris:It's quite an exciting month for us, actually. We're having a you know record month the last couple of months, but we've actually just hit 20 billion of annualized payment volume, which is super exciting, and that's growing at about 250% year on year. So accelerating growth, which is great to see. So yeah, there's a lot behind that 20 billion in TPV. But look, I think a good way to frame this is you know, BVNK has really been building this stablecoin-powered financial stack, and that really starts with send, payouts, receive kind of acceptance, convert, which is really just um you know, going between fiat and crypto. And then there's new primitives, you know, payments primitives we're building in that stack, which is uh store, which these are embedded stablecoin wallets, earn, you know, earn some yield on the on those balances, and then spend, which is really spend on a stablecoin link card. But I think the lion's share is very much in that first camp today. It's because just where the markets come from. You know, I think you know, we've very much seen over the last 12 months a lot of kind of formal RFPs come out and everyone kind of moving from kind of curiosity about stable coins to kind of actual implementation and commitments around what they want to do. And I think there's kind of been three things that have that have driven that. I mean, one has really been we've seen transaction volumes get to scale. So I mean you can go look at whichever way you want to cut the data, there's significant volume. You know, if you look at the Artemis report or the visa and a you know stablecoin analytics dashboard. But I think you're also getting to a critical mass of actual users. So there's like 50 million monthly act, 50 to 70 million monthly actives, just with stablecoin wallets, that's exciting crypto and that's growing you know rapidly month on month. And then more recently, we've had this regulation, you know, regulatory clarity come in with the Genius Act. So it's kind of those three things combining to, I guess, tip the scales in terms of enterprises and PSPs, who are our kind of main customer segments that we serve. And we really, when we started having conversations with them, it's really around how do we do um those first three things send, receive, convert, how do we do stable coin payouts into 80 markets around the world? How do we accept stable coin at checkout? And so that's kind of really how it falls today. It's send, receive, convert very much across enterprise payment companies, as well as you know, some of the largest merchants in the world. And then I think um, you know, something people don't know is we you know we've we've had that acceptance product in the market for quite some time, and and that's really gotten to scale. But you know, it's probably eight or nine billion of that 20 billion is actually stablecoin acceptance, and that's in verticals like um stock trading platforms that have, you know, they're UK regulated, they've got a global user base, they want to be able to top up their stock trading account with stablecoins. So it's kind of all of those flavors around send, receive, convert across those different verticals is really where we see the most traction.
Chuk:Yeah, that's awesome. And congratulations on 20 billion. That's a huge number. And yes, folks will say compare to Trad5 volumes in the trillions, we've still got a long way to go. But I think it's the growth and the traction today that's really important. And you know, we've got many, many years for these things to scale. And at this pace, they'll be quickly taking a lion's share. And so one of the things you mentioned was merchant acceptance. And you you mentioned the example of uh funding the stock trading apps. And um, there's lots of different you know, arguments or kind of debates up there around, you know, will Visa and MasterCard wear now versus the availability of stable coins. But I guess in this example, this is like a funding of a platform. It's less of a direct transaction for a goods or service. Are you seeing that the key advantage there is broadening customer base to be more global?
Chris:You've got to think about stable coins today in like two buckets. The first one is like stablecoin payments, which is really like a stablecoin as a payment method. You know, you want to accept stable coins, think of it alongside cards, alternative payment methods, crypto or stable coins. And then stable coins is a payout method, you know, when we're doing stablecoin payouts for a large marketplace or a platform. And then there's the second camp where I think we're slowly starting to move into that with those three confluence of factors, more users, more TPV, clearer regs, is really stablecoin becoming infrastructure for a new uh new fintech product to be built on top of. And this is where the wallet plus the earn plus the card comes in quite nicely, where you could rebuild yourself as a kind of fintech global day one, always on, and that sort of thing. But if you come back to that stablecoin as a payment method, that's really where you see this kind of send, receive, or acceptance use cases. And if you dig into that acceptance one, I think, yeah, it has been stock trading funding, and I think it's moved similar to how previous um kind of payment methods have been adopted. It kind of starts a little bit high risk, you know, that need the innovation because they just have lack of options. It's moved into more mainstream with higher TPV stock trading, funding, but it's still really a me to me funding payment, you know. And I think we're starting to see it bleed into luxury, luxury goods, some people like you know, integrating stablecoin acceptance right there. But we all know the big one is e-comm. You know, we everyone like when you're actually starting to transact and using stable coins to pay for goods and services at checkout on an e-commerce, on e-com platform, and then you see announcements like the Coinbase and Shopify one with the X402 protocol. Um, we see it in our pipeline as well. So a lot of large global merchants are thinking, well, look, today I have to knit together three or four different card processes, I got to knit together like you know 20 or 30 APMs, maybe that's six or seven different providers, and then I get stuck with all of these local domestic currencies that are processed and they get trapped in those markets, I don't get them out on time. And if you just say, okay, well, we'll go back to first principles. There's an always-on payment rail, it's ubiquitous in all these countries, it's permissionless to use, you've got an accelerating user base. Why don't I just accept dollars or digital dollars at checkout, wherever my customer is paying, and bypass all of these settlement headaches and actually get instantly settled on the other end. So I think we're seeing that direction of travel really heading out of those early niche verticals into small mainstream e-com ones. And that's what I'm actually really quite excited about over the next 12 months is acceptance with some of the largest merchants in the world getting to scale.
Chuk:Yeah, and I think that's the big time that everyone's excited about and causes a lot of the online discourse for sure.
Raj:I mean, it makes a ton of sense because I mean you start to see these, you know, payment verticals start to expand, not just you know, B2B settlement, but then you have the consumers and then you have a couple of different areas as well. But you know, I think one thing I would love to do is just even take a step back and you know, we oftentimes, you know, I'm I'm in these conversations also where a fintech's like, hey, like stable coins are really powerful. And like, like you said, Chris, it's an always on payment system. But like, what do I do? How do I add it for my own, you know, company or for my own product? And one thing that you guys mentioned a lot is that everyone needs a stable coin strategy. But I think sometimes getting to that strategy is really difficult. You guys have obviously been like a pivotal part of a company's stablecoin strategy, but what are some of the common questions you're hearing today when they're saying, hey, you know, I'm excited to explore stable coins, but I'm not really sure how to for my business?
Chris:We really have been playing kind of thought partners to a lot of these enterprises and actually helping them craft their RFPs and their RFIs who are, you know, they're coming thick and fast, but exactly to your point, what questions are they actually asking that? And I think there's various degrees, and you know, there's always some sort of stablecoin champion inside one of these, you know, who's kind of trying to drive it internally, drum up that support, build a business case. And they've kind of done some research and they try to get the people to the table and that sort of thing. But I think one of the biggest lessons we've actually taken away is when you just read quite wide to your point, it can be quite confusing for someone coming in. Like stablecoin is a panacea for every payment problem on earth, it sounds like when you read, when you read things. But you know, that's obviously not true. And I think the the biggest piece of advice that we give, you know, as we're going through these processes are look, pick one use case, one that makes the most sense. You could do a lot of things, but try pick one, coalesce around that, get some internal support for your business case, do some A-B testing with customers, send a marketing campaign. Would you be interested if we launched this as a payment method? Would you be interested if we launched a yield on you know on a stablecoin wallet or something like that? Get some customer feedback and then you know go from there and build that internal support. And then I think when we go through that process, it very much looks like hey, let's do some demos for them, let's show them what it could look like inside their platform. That brings it to life for the product and the commercial people. They get super excited, but then naturally it moves on to the next piece, which is like um reg and compliance. So you end up having to do reg and compliance workshops to say, hey guys, actually, this there's great regulatory frameworks in place, and obviously the regularity we spoke about earlier is adding a lot of color and clarity to that. So there's great regulatory frameworks, there's easy ways to think about KYC, KYB, AML, transaction monitoring. It works the same as in fiat. You just actually have better tools like Channel and this sort of thing. And and then we obviously also share a bunch of data, external resources. We have that great, I think it's you know, bvnk.com, let's go. And effectively you can build your own stablecoin strategy, it puts in use cases, and there's some demos you can spill up. So we try to give them all the tools that they need to build an internal business case. And then once it clicks, it clicks for everyone, basically. It's like, okay, this is actually something that we could we should really pursue and put some kind of resources behind. And I think we're in that phase with a lot of them today.
Chuk:Have you seen a pattern of the kinds of use cases that get folks over the line? Either is it a net new revenue style or an internal cost efficiency style.
Chris:Is there any pattern that you can glean? For me, I'm I'm very much like new revenue stream is new growth. So when you split it out, so my advice is like this is great for your customers, you can add a new payment method, you can pay out into all these markets. But many of them do approach it like and spill it in. Hey, there's probably some treasury optimizations we can do here, maybe to start and let's test that way. And a lot of the time, that's kind of what we say. We say, look, if you're a PSP, just start settling your merchants in stablecoins. Get your treasury team comfortable, get your risk teams to sign off custodying stable coins, even if it's just for one day. Get your um payoffs teams kind of understanding how wallets work and this sort of thing. And then when you're all comfortable, take it, you know, where there's a little bit more risk for you where you take into your customers. And we've seen this, you know, direction of travel work quite well where PSP will start doing stablecoin settlements and then quickly move into actually, I want to allow my merchants to do stablecoin payouts to their end user. And that's been a great pathway or upsell for us. Um, start with something that you can control a little bit more, like a treasury settlement flow or something like that, and then expand it out into your customer base across acceptance or payouts. Um, yeah, I'm you're seeing some of those acceptance and payouts conversations moving to that next level, which is stablecoins as infrastructure. This is, hey, I actually want to turn, not just do the payouts, I want to actually issue a wallet, I want to earn some yield on top of that wallet, and I want to spend using a stablecoin link card.
Raj:And do you see a lot of these customers requiring any crypto or blockchain knowledge for implementation? Like, do these engineers actually, once especially when working with BBK, do they have to know the inner workings of this stuff as well? Like, how much abstraction are you guys giving where you know they can go to their treasury management systems or they can create dollar accounts like anywhere in the world? Like, what what level of like implementation do they actually need around it?
Chris:Yeah, I mean it's a good question. I we well, right at the top is we abstract all that complexity away. And and when we built products, there was this ethos around making blockchain payments as easy as bank payments. So our kind of core business is taking stablecoin payments and stable coin uh payments infrastructure to trad fire businesses. They don't know anything about it, they understand traditional payment systems. Uh, so you've got to actually abstract all that complexity of chain, gas fee optimizations, what is a wallet, how does key management work? You know, and that's really how how we set ourselves up. Like bring a bank account that you can fund from or receive a settlement to, do a basic API connection, you know, in into our APIs and you're off to the races with stablecoin payments. We take care of the tech, the regulatory compliance, obviously running on our license, and then even you know, leveraging our interconnectivity and our banking connectivity into different domestic payment rails. So I think um we take care of all of that complexity because we found it is just too complex, and you won't even get off, you want to get off the starting block if someone comes in there and says, hey, let's get going, and tries to figure out what a UTXO blockchain is and an EDM chain and then trying to fill it into Solana. So yeah.
Raj:No one should know what how crypto and blockchains work. And I always joke, it's like the same way today you go to a coffee shop, you spend your card, you have no idea how Visa works today, as most consumers. You know, we happen to be Visa, you know, payment nerds over here, so we we happen to know a thing or two. But for more you know, more often than not, it should be a customer going to the coffee shop, swiping their card, merchant gets paid, consumers paid, and that's the end of the transaction. And so it sounds like what you're saying, Chris, like that's exactly what you guys are trying to do when it comes to stablecoin payments, too.
Chris:No, 100%. You know, and I think we we're quite uniquely positioned because we the only vertically integrated, if you call us a stablecoin orchestration provider. We've we've actually don't run on anyone else's custody technology. We've built our own stack called Layer One. Uh BVNK is the largest customer of that stack, and that stack is really where all the magic happens, is it allows um that abstraction to happen and allows it easy for customers to integrate with BVNK because all the complexity is taken care of by that stack. Yeah, and we've actually unbundled that stack, and you know, some customers are building their money movement use cases on top of it as well.
Chuk:Yeah, I think it's almost like a parallel sales approach, or maybe even a tactic, where you say, hey, look, if you want to build it yourself, here. And here are all the different things that you need to do. And multiple chains, and yes, that layer one stack abstracts a lot of that away. But then on top of that, there's all the compliance and the various lists of other things that you mentioned, and say, okay, so here you go. Or we can handle it for you, get your operating bank account and your simple API, and we'll just handle that for you like another payment partner. And so I think you're you're giving customers two choices. Their choice to take it all in-house if they need to do some very custom integrations or some uh unique uh use cases, and if they have the internal understanding in shops to kind of pull it off. Uh but at the same time for folks who just want to get up and running off the ground, hey, here's a really simple integration, and you can get started and learn as you go along. So I think it's uh you kind of have both sides uh to play with.
Chris:Yeah, for sure. I think it's also a good graduation path for customers. They can start with us, use our license, use our tech using our banking integrations. When they get to scale, switch over. It's the same API schema, get their own license and take just the infrastructure, just take the tech platform, use their own banking platform, use their own licensing. And we've seen that work really well with enterprise, especially enterprise PSPs who are like, look, at some point I want to get to scale with this, and maybe I want to switch off well. Don't worry, we've got you covered. You know, it's one week of work instead of trying to rebuild this entire thing, you know, from scratch, basically.
Chuk:Yeah, I'm sure that's like one of many lessons that you've learned over the last uh couple of months. Like, what have been the main takeaways from working with these customers, small and large, in terms of implementation? Um, what's worked better than expected, what proved more difficult than anticipated? Maybe you can share some insights there.
Chris:I mean, I'd bring it back to that. The quicker that you can get a customer to kind of pick the right use case and get like single in on, hey, I want to do payouts. Okay, and then you can work from there, and then it becomes a lot easier. So I think that the number one thing is like get them to the right use case quite quickly up front, and you know, and then through there, you know, you can do an implementation pretty quickly. And then because our APIs are quite standardized, it would feel like a normal you're integrating some normal payment method, the implementations can actually go quite smoothly that way. So we we spend a lot of time up front around getting to the right use case, doing the right demos, getting solutions involved to show what the best integration could look like for them, and then actual implementations go a lot smoother because of that. So it's again, I think the number one lesson really is around picking that right use case and the one you want to launch with, and then coalesce your effort and energy around that.
Chuk:Yeah, and I think it goes hand in hand with the item you mentioned earlier of this the progression along. So starting with one use case, but there are multiple use cases that one wants to expand into. And you mentioned yes, there's send, receive, and convert, but then the cars, the yield. And so you can I can imagine these huge RFPs with all these different use cases, but then you say, okay, look, yes, we can sort out all of those things, but let's just start with one, get comfortable, get the teams, get the internal momentum going, and then expanding to each of those additional things is critical. So I guess as an infrared provider, you need both. Easy way to start small and low friction integration, but also a path to expansion at the same time. Is that something that you see as part of the decision-making process?
Chris:100%. So um you can't be a one-trick pony, I guess. Um, you know, you definitely have to be able to launch, launch with one, but then quickly be able to add more. Um, you know, like I mentioned, we're seeing a lot of customers who started with payouts moving, started with like B2B settlements and now moving to payouts. Some of them that started with pay-ins and payouts, now wanting wallets, those wallets, you know, the next iteration of that is hey, you earn some yield on that balance and then spend using your card. So definitely you need to be able to expand the use cases with them as they want to grow in the space. But yeah, quickly to get something live, it's always it's always better to start with one and then grow from there.
Chuk:On those payouts use cases, um, maybe you could share what type of payouts uh are occurring. Uh is it creator payouts, is it employee payroll or contractors or other kind of B2B payouts?
Chris:Yeah, so it's all of the above, actually. So we obviously work with you know large payroll platforms like Deal, you know, host of others' announcements we can announce fairly soon coming out on that. And that's exactly, and there's even two branches. It's hey, I want to pay out contractors in 200 markets around the world in dollars, you know, in digital dollars, but I actually also want to be able to do payroll in a domestic market in stablecoins, and there's a few nuances you need to work through there around um paying out in fiat and then auto-converting to stable coin and this this sort of thing. So there's some interesting use cases that are you know bleeding off payroll platforms more broadly. We then see creator, you know, the creator economy type payouts or creator payouts think all of the top um creator platforms, they are an ideal, you know, it's an ideal use case to pay out a creator. And I think it works really well because stablecoins are actually the first rail that can do a $1 or 10 cent micropayment, let's say, all the way up to moving a billion dollars. You know, most rails, most payment rails, if you think about them, like ACH in the US is more consumer oriented versus SWEP FedWI, which is more institutional and interbank type oriented. So this rail can do both. So you can do your $50 creative payout into you know the global south, but you can also send you know $5,000 for a B2B invoice or something. Um so we see that we also see a lot of interest across marketplaces. Great use case. They are obviously generally a lot of the buyers are uh in the US, sellers are global, um, and that marketplace you know acts as a conduit of accepting from buyers and settling to sellers. So that flywheel works really nicely. And again, those sellers would much rather, they're small businesses, they need cash very quickly, they don't want to wait, you know, two, three weeks to get their money after selling some goods. So I think it's a it's a great use case for marketplace payouts as well. So we see all of all of the above basically.
Raj:And I guess a quick question on that. I mean, when you you you said you're seeing everything, but you know, at the same time, like what's what's driving the urgency for some of these companies to say we want to explore stable coins? Are they coming in with like a here's a clear use case that we've been trying to solve for for many years and now we think that stable coins can actually solve it? Or are they actually just like seeing the headlines and you know their competitors now exploring stable coins? And so they feel the need to go into stable coins also. Like what are you exactly seeing?
Chris:You see, from both camps, basically. Obviously, there's you know the headlines and the circle IPO and just the interest more broadly in the market, and you know, that keeps you know going up and to the right, is obviously driving people to take it seriously. Like, hey, we should look at this as a payment strategy team at a large enterprise, a Fortune 500 company. Like, let's actually figure out what our stablecoin strategy is, spend a quarter doing that work, spend another quarter getting to the right use case, figuring out implementation and going. And then there are other more, I guess, money movement businesses, let's think traditional remittance apps. You know, they've all been thinking about stable coins for years, they just haven't found the right way to implement and that sort of thing. So they'll come to you with specific asks or hey, we've been thinking about this, we've manually tested it with uh an exchange account, and we've just like sent some money there and sent it, and but we really need to do this properly at scale. So I think you get both sides of the fence, but overwhelmingly, what's bringing in large enterprises and getting them to think about their stablecoin strategy and start moving has been, you know, this great 12-month run that let's say stablecoins have had, you know, and then obviously coalesced with um, you know, I guess the tailwinds just picked up, you know, after the Genius Act and Circle IPO and you know, uh more and more stuff coming to the market. So I think um but yeah, we've got a whole host of you know exciting partnerships to announce into the back end of the year. So you know there's more stuff going to be coming out. So it's really exciting more broadly. Yeah.
Chuk:One thing that I think is always interesting to discuss is where the volume is being taken from or where is where is it shifting away from? And so depending on what side of the internet you're on, it's okay, Swift and correspondent banking, or these folks are doing it themselves in like a non-regulated way, stitching it together, like you said, with exchanges. Do you have a sense, maybe we could start with payouts and then we can talk about uh merchant acceptance of what were they doing before? And where's the shift? The $20 billion, where has that come from?
Chris:I think about it in those two campscanes, actually. If you think about that first one, which is um send, receive, and convert as stable coin payments, whether it's payouts or acceptance, that is 100% starting to chip away at fiat TPV. So it's competing against other alternative payment methods and other cards. And why does it win out? You know, we know 24-7, it's a digital dollar that's you know around the world. It's um one integration gets you 200 plus markets, all these sorts of lovely things that we we like to talk about. Um so that is coming from fiat-based TPV, and we know how fast, you know, the world is still, despite some you know, nationalism around the world and trade wars and all this sort of thing, you still the world is still global, trade is still happening, it's still going up to the right, and people need to pay and move money across borders. So you've got fiat TPV up and to the right still, or growing at a you know at a decent clip, and stablecoin slowly gaining market share on that fiat TPV. So that's like the existing, you know, it's taken away from existing fiat TPV and chipping away at it. But what I'm really excited about is the next thing, which is that store, earn, and spend, where these are entirely new businesses and business models that can be built. This is FinTech 2.0 building on better infrastructure. This is a neo bank in the US going global on stable coins with a wallet and an earn product that are now you're checking in your savings account in one. They can launch in 200 markets instead of going market by market, can do cross-border payments by default with send and receive. And then, hey, let's add more utility to this balance, and we can spend your stablecoin balance just as you know anywhere Visa and MasterCard are accepted. So I think there's both camps. There's like net new products being built, and there's also that chiseling away and taking market share away from fiat TPV.
Chuk:Yeah. I think one thing that's super interesting about that second bucket. So the first one, yes, taking away fiat TPV, that makes sense. You know, over time there's always going to be this disruption over the incumbents from banks to Web2 folks to now the stablecoin powered players who you're integrated with both Fiat and Stable. So uh there's this hybrid and convergence happening. Now, the second one, you mentioned going global, uh being able to launch 200 countries, and I think this is really fascinating because it's true and it's it happens because of this permissionless asset, this permissionless dollar asset combined with the global demand for dollars as the world reserve currency and the stability and the currency that's used for global trade and FX. We've seen this, we know it, we understand it. But the elephant in the room is what will the local countries do? Like what is their pushback if more and more of local savings starts to be pushed into these amazing consumer wallets that have spend and have yield, and they're just better products. I can't imagine the local sovereigns will just sit back and watch it happen. Um, I think we're seeing some rumors and some reports of the UK, for example, coming out with $10,000 or £20,000 equivalent restriction on how many stable coins you can hold, which is incredibly bizarre, but you can see where they're coming from. It's going to be very hard to enforce. But that will only be the first. And I expect more to happen. I wonder what your what your thoughts are on that.
Chris:Yeah, I mean, I think 100%. I mean, I don't think any local economy wants a dollarization of their economy, which is kind of could largely happen. It's likely to say worst case scenario. But to your point, I think um ultimately better products win out. You know, we've seen that you know through through time. Like if you just fundamentally have a better product, you can, yes, you can put guardrails around it, enforce it with uh quite a draconian regulatory framework, and you know, force, and you largely see this today. I mean, in many markets in Africa, Lat Sam, you can only buy X amount of dollars, you can't, there's exchange controls even in South Africa, like where I'm from. Um, so there are already rules in place to stop, I guess, you know, capital flight, the dollarization of economies, and that sort of thing. But I think um ultimately customers want it, the cats, cats out of the bag. I think there's clear precedent of what good regulation can look like, take Mika, take the Genius Act. And you're starting to see local countries actually adopt that. So they've said, look, we don't want foreign VASPs serving our local users anymore, so we're just gonna put a proper regulatory framework in place and model it most likely on the US's. So that's why it was a big domino to drop on a global basis. Yes. Um, and we've seen markets like Philippines recently come out and say, look, no longer can foreign VASPs issue wallets into the local market, at least not custodial wallets, and um, you need to be a you either need to be registered in the local market or get a local license. And I think you're gonna see more of that. But I think the beauty of this permissionless technology and the fact that it moves globally is you know, there's kind of a decision tree you need to make. If you have a license and can serve that user with a custodial wallet, you do. If you don't have a license to serve that user with a custodial wallet, you can just give them software and let them be their own bank through a self-custodial wallet and still offer the same products on top of that self-custodial wallet. You know, I think you're gonna see that trend pick up as well. And that's gonna be a new challenge that I guess local economies are gonna have to deal with. But you know, I ultimately think innovation is gonna win out here, and most of these markets will come on sides and realize look, our customers want this, our our our citizens want this, and we should probably enable this with a better framework.
Raj:It kind of reminds me of like what's happening in Bolivia right now. I think the government has about $50 million left in its reserve in US dollars. And if you look at the top like five to ten fintech apps, they're actually mostly stable coin apps, funny enough, because the the actual central bank USD and Bolivian currency rates is actually not consistent. It's actually, you know, the the market rate is actually 2x of that. And so a lot of folks are actually flocking to stable coin apps like Meru or Takanos. Um, and those guys are seeing a lot of organic growth where people are just not, they're not looking, they don't know about stable coins, but they want access to dollars. And so to your exact point, Chris, I mean, some of these like you know, local economies are gonna have to realize pretty quickly that if they're if they don't have the right economic policies around it, people are gonna flock to better products. They might just be built with stable coins from the ground up as well. And so it's an it's a fascinating trend that you know, hopefully more countries realize otherwise, you know, dollarization could exist in their market as well.
Chuk:I think it's fascinating. Uh, I'm gonna take the slight other side here and say that I think it it really depends on the the country and the the strength of the public's resolve in the government and you know, where there's capital controls and potential for kind of revolutions and so on, then you can see that it being very, very hard to enforce. The people are already will choose the non-custodial wallet. But there are many countries in between where the local populace do respect the government, the government says don't do this thing, they will listen. And I think it's gonna be really interesting to watch on a geopolitical level over the next call it 10 years, this push of dollarization globally. EU is obviously playing very hard, restricting what digital assets can exist and what currencies coming out first with Mika, I think, depending on what perspective you're taking, is a smart move or not a smart move from a driving innovation and growth. Okay, well, many people can comment on how easy it is to set up shop there and what that can do. But in terms of controlling the innovation and holding on to control, they've been more successful in that perspective. That's not necessarily aligned with kind of local startups, but it may be aligned with their policy goals. And so there's so many different factors to pull into. Place. Before we move on to the next topic, just want to take a short moment here to thank our sponsors. Every business needs a stablecoin strategy, and if you're looking for the best place to start, that's BVNK. BVNK is the world's leading provider of stablecoin payments infrastructure, helping businesses move money faster, reach new markets, and even launch their own stablecoin products. Global licensing and compliance are covered, so you can build with confidence. Learn more at bvnk.com. We've talked a lot about how these things are progressing and some of the nuances, but there are still lots of challenges to progress through from where we are. And I'm sure, Chris, over the last several years of BVNK's growth, you've seen these chip away. And you mentioned a couple of at the beginning there as well, with regulation being a tailwind and so on. But what other barriers do you see kind of in the way that need to be removed to expand stablecoin payments more broadly and general adoption of blockchain-based financial products?
Chris:Yeah, I think you're seeing this trend. I mean, we've seen all, you know, we've seen in over the last six months more stable coins, more chains, payment-specific chains, corp chains, more closed networks, some open networks. You know, and for me, like the answer can't be more complexity. You add more, all of this fragmentation into the system, you know, creating more complexity for customers. The answer really has to be like abstraction, like make it easy. Like we said, make blockchain payments as easy as bank payments, not um more complicated with all these different flavors of stable coins and then also multiple different chains. And yeah, some are optimizing for certain things, but at the end of the day, like we mentioned earlier, Raj, like the user shouldn't care what chain it runs on underneath or what gassy model that chain uses. You should just be able to tap to pay or send your stablecoin wherever it wanted, and it should pick up what wallet's coming from, what stable coins. So we're working quite hard on that um abstraction layer to really, you know, cater for this fragmentation. And, you know, and it's gonna go through cycles. You know, some chains are gonna work, some are not. Uh most stable coins are probably not gonna work. A couple will keep their scale and probably get bigger from here. We see that fragmentation as a not really a problem, but uh more just like a barrier right now, that complexity barrier to some of the traditional kind of players coming in, and we try to solve that with our stack. But I think um there's another one that's quite interesting, which is really around um consumer payments. So as we spent a bit of time earlier thinking through acceptance and we said, look, you know, maybe it's in earlier niche verticals, it's moving through those, and we really need to see it get into e-comm to really go, you know, to really go vertical. And um, there are just some fundamental challenges for the blockchain, you know, with blockchain check more broadly, like what is a chargeback? It doesn't exist. What is consumer protections around uh chargebacks and disputes, refund mechanisms? You know, we also know like subscription payments, you know, blockchains are a push technology, not a pull technology. So you have to pull that. But the beauty of it is you can program it. So there's, you know, what are the what are the best like products and little features you can build into the smart contract to actually turn it and start doing subscription type payments? So I think on for consumer payments to really get to scale, we need to solve all these small little problems, you know, like what if you send the wrong stablecoin on the right chain or the right stable coin on the wrong chain? So like solving, you know, we've had to solve a lot of these smaller kind of edge cases in our stack today, but I think you know, you're seeing protocols like Coinbase's on-chain payments protocol trying to bring some standardization similar to what Visa did with card payments, bring some sort of standardization to a crypto payment or a crypto acceptance payment so that they can actually get to scale and consumers can be completely abstracted away from that complexity and just use stable coins and blockchains in the background without actually having to care what the rail looks like. So, you know, watch the space. We're working on some really cool stuff in in there, but I think we need to solve a lot of those problems to really get that consumer payments use case, you know, really to scale.
Raj:Yeah, it's really interesting because when you have you have systems like Visa, it's been around for like, you know, 60 to 70 years, you have Western Union that's been around for like a century, uh, and then you have stable coins really in earnest, has been around for you could argue like 10 years with Tether or seven years with USDC, but in earnest, the infrastructure like a company like BVNK, it's only been around for the last three to four years or so, maybe you know, a little longer. Um and so to your point, Chris, like a lot of the primitives around the systems like don't exist, but how fast it's accelerating to billions of users and billions of volumes is is insane. Uh I'm I'm curious, just like your view, just maybe even expanding on that, like the structural issues and like you mentioned some of the primitives around like the features and functions, but like how have you seen you know stable coins kind of permeate just like the structural markets around you know some of these incumbent systems also? And you know, like what what do you think it takes to get to like a hundred billion like TPV or you know get to like a trillion dollars in like stablecoin market cap?
Chris:We need like mainstream consumer payments for sure to get us to that trillion in TPV. So we need e-comp to work. And then also I think we need um point of sale, so like tap-to-pay type where people, you know, these stablecoin link cards are are are great and they're seeing a lot of growth and they're using stable coins in the background for sure, but traditional kind of cardrails. And I think we need to switch that over where actually you you're tapping and paying in stable coins natively using your wallet and you know, and you know, Apple Pay and that sort of thing. So I think it needs to be underpinned, at least uh to help us drive this on the on the consumer side. And then I think um we definitely do need some standardization around and whether you do that at the chain level or some sort of like protocol level that sits on top of the chain. I don't have you know the right answer. I think some people are trying to do it into the chain, as we know, and other people, you know, like you know, obviously Coinbase is doing both, they've got base, and then they've also got the X402, so they could probably put it in there. But I think you need to bring elements like um KYC, um, transaction monitoring. You know, obviously travel rule's been implemented, but still quite clunky, the UX is not great for crypto payments. What does that look like? Could we build some sort of KYC pieces into the actual chain itself? Or things like um if you really wanted to get to scale on payroll payments, you know, you need an element of privacy to a payroll payment. You know, if you throw enough, there's some basic models you can throw, you can check consumer behavior, throw in a couple of hash. Yes, it's a pseudonymous payment, but just based on behavior, you can quickly realize who's getting paid where, which company's paying salaries, you know, if you look at the blockchain data. So I think there's elements of privacy if you want payroll to get to scale. So there's all these like, I think different types of payments need a few different things to really help us and drive us to that kind of trillion dollar TPV. So I think we'll have to see how that plays out. And you know, there's a lot of people working on different aspects of this. But I think we all of them, we need all of them to be come together to really get us to that trillion in market cap and then obviously multiples of that in terms of actual useful payment volume.
Raj:Yeah, I was just gonna say, I mean, that you the privacy point, Krista you mentioned, is pretty interesting because you know, with every transaction being public, you can't, you know, I think that it creates a lot of issues. Like, for example, if someone's using like a card product at the point of sale and they know it's a Solana transaction, they could potentially go to the block explorer at that time and say, Oh, you know what? I see that transaction actually going through in the blockchain. I know that user's wallet. Like these sorts of things are still pretty tricky for most folks to think through. Like I'm curious like how much thinking you guys have done around like the privacy side and what is like the silver bullet there to solve that.
Chris:Our team is spending a lot of time kind of thinking through from a technical perspective how we can solve some of these challenges. But I think there's you know, technical perspective needs to meet um you know actual use cases out in the wild, you know, that are that are there in scaling. So I think we look, we haven't we've thought about it, but haven't really gotten, don't have the answer yet, and are working with different partners, you know, contributing to you know Google's A2P protocol recently, you know, working and contributing to to some of the the Coinbase stuff on X42. We've actually spun up our own GitHub repository and we put our own standard out there called Solus, which you know, we just thought, look, we've seen some common pitfalls. He has a standard to try to solve some of those pitfalls based on our experience. So I think there's a lot of these kind of floating around, but like maybe I you can direct the guys to that uh uh we can link it in the show notes or something like that, and then go check out the GitHub repository and how we've tried to solve some of these problems.
Chuk:Yeah, I think it's a really interesting kind of trade-off between what's more important, like the technical capabilities or distribution. And with distribution, I mean you know, you've got a a sponsor, you've got someone who can put volume behind it, put a use case behind it. There are lots of great technical solutions. I say great. Good technical solutions, great will, you know, that will be developed over time for either privacy, for confidentiality, um, opt-in versus permanent, then uh some of the other things you mentioned, about you know, protocols for chargeback and having a kind of escrow type solution. Some of them are open, EVM compliant, and therefore can be ported to different EVM compatible chains. Some of them are specific to new L1s. And so from your perspective where you've got the pull of the market, $20 billion of annualized volume, you've got customers to serve, you have priorities. How do you think this new technology will develop and will come to market? Do you think it it the distribution and network effects of the existing chains where the volume is happening today is too powerful? And then it's just a matter of time before those chains start to incorporate some of these features? Or can you see a world where either because one of your customers or you yourself decides to support a net new L1 or L2 because of a specific feature?
Chris:Yeah, it's I mean, it's we've always been kind of chain agnostic and stablecoin agnostic, you know, and I think you need it to be, you know, in early days because there just wasn't enough liquidity. It was fragmented on multiple chains. I think maybe some of that is changing now, but I still think we we very much merchant-led in terms of, hey, you know, sometimes they don't know what chain they want, so we you know we offer the ones that we we support. But I think we are. We you know, we we're close to all the major blockchains. I think they, you know, we've had many workshops with some of the more prominent you know, L2s and L1s that are thinking through, hey, guys, if we wanted to be the payments chain, what do you think we would need to contribute or add in to really do that? And I mean you've seen new ones pop up, like you know, um Stripe and Tempo and this sort of thing, and they're thinking through it in a certain way, and they're making certain trade-offs, and then you've got you know other L2s thinking about it in a certain way and making certain trade-offs. So I think we probably for the foreseeable future, at least the next two to three years, see more chains trying to solve these problems at chain level. You know, you've got a few payment-specific chains, stablecoin specific chains, and then maybe there's a consolidation that comes back together. Um, and you know, maybe that you only need a couple of big blockchains doing payments, and then there's certain blockchains more optimized for DeFi. And I think that's probably where it ends up.
Chuk:So, what what was your answer when they when they asked the question that you they teed it up and what did you tell them?
Chris:No, I mean there they are. I mean, it's really just like you know, this is where we we think through how you um, you know, you've got to think about KYC, you've got to think about privacy, you've got to think about um uh you need low latency, high TPS, you know, you need high speed, even like you know, MPC type security modules, which not necessarily always at a chain level, but more like wallet infrastructure custody tech, MPC doesn't work great for payments because you always need two people to sign the transaction if you want to think about it that way. And that doesn't work if you want to do it, works really well if you're doing like custodying Bitcoin and don't want someone to steal it. But if you're trying to build a high throughput payments uh chain, probably not the best way to go. So there's all these kind of trade-offs that they have to make at that level, and we just contribute based on what we see in the market, what customers care about, uh, and this sort of thing. But um, yeah, I guess it's still open for everyone still trying to figure out what the the panacea is for what is the best payments change, what features did it need to have, and what level of decentralization, centralization, and trade-off can you make to try to get it to scale?
Chuk:Yeah. I I think it's a fascinating question, and I'm excited to see it play out. I think um this may be not the greatest analogy, but the VHS Betamax, where you know you look at the technology, you say, okay, Betamax is better. It's got these features, it's got these features, but VHS had distribution first and is not necessarily first to market, but first to scale. And then that became the standard because there's all these network effects, and I think there are many similar network effects in payments, which wallets are supporting it, which counterparties, which liquidity providers, which exchanges, that it may not necessarily be the best chain on a purely technical level when you look through all the l the list of things you just mentioned, but the one that reaches some critical mass. And I don't know what that critical mass is. I'm sure everyone's trying to figure it out. Um but I think I feel like you'll be at the center of it, and you can, you know, some of the customers that you're serving will say, well, actually, we have this use case, we can't turn it on until XYZ happens. And maybe that's, you know, as you've mentioned, the progression of use cases after they've done their payouts, after they've done the treasury and the acceptance, and they're thinking about more larger payment sizes or payment use cases, then they'll shift and say, actually, now that we've understood this stuff, we've been doing this for six months or 12 months, we want a chain that does X. And I don't know when that happens, but I'm excited for it.
Chris:I think you should start a polymarket and say which payment chain is going to win. And we can all we can all vote from it.
Raj:We can all speculate on it. We're getting close to the end here, Chris. But you know, I guess maybe like if you can share just like an insight from like a customer or partner, or even you know, any data point that you think really changed how you thought about the space. You know, sometimes like, you know, we we all drink the Kool-Aid of you know, stable coins and blockchains, but sometimes hearing it directly from our customers kind of unlocks things sometimes too. Like curious what what that was for you and if there's anything that you could share when you uh for the audience as they're thinking about you know their stable coin strategy also.
Chris:Yeah, I think there's two um there were two things. It was one early, early in our journey, which is kind of a a personal one. Like my background was um I was sales and trading at banks, and I, you know, used to be trade FX basically and all the kind of like semi-fX. So you'd execute a trade in a millisecond and then you try to settle it, and it would be T plus two and then T plus 13 if you were settling some exotic currency because Swift just never worked. And then, you know, kind of you you come across Bitcoin and you're like, oh, this is pretty cool, peer to peer electronic cash, we can definitely use this for payments. This seems way better. And then you've got the volatility of Bitcoin, you quickly realize you can't do cross-border payments with Bitcoin because you're gonna be out of, you know, you're gonna have to be managing risk like to the nanosecond basically to actually do a payment. And then stable coins came along, and you had the blockchain that was, you know, you know, birthed by Bitcoin, but you had this blockchain, and now you put dollars on that blockchain, and you're like, okay, well, actually, we can use this to do payments. And I think that that moment for me happened, it was probably must have been like 2017, 2088, 2018, you know, just as we were, you know, and um and I was just like coming off a bank's trading desk and then moving a million dollars on a Saturday, on you know, lying on the beach on a telegram app or something, like oh, okay, this is actually this something, yeah, for sure. So that was kind of like an earlier one, like a data point where it was like this this stuff can actually get somewhere. And then there's been six or seven years of blood, sweat, and tears to get to where we are today. But um, I think um what's been quite surprising to me is the um the speed at which conversations or like let's say 18 months ago you were having conversations about quite um theoretical conversations about use cases, what they should do, and that sort of thing. What's been great to watch or see is really like the acceleration of that from idea theoretical to actually, hey, this is what we want to do, and that acceleration has obviously been driven by a lot of the factors we're just working about today. And and they're getting to that, hey, this is this is what we want to do a lot quicker. So I think it's um yeah, that acceleration has been quite exciting to see, especially with large enterprise customers, that you would have never thought, you know, these guys are gonna take five, six years to do that, but you know, that that acceleration has been a lot faster than and and getting to that um articulate stablecoin strategy a lot faster, which has been great, great to see. That's awesome.
Chuk:I think that has been the biggest kind of shift that that occurred this year. I think folks in the space who were anticipating the changes in regulation once it was clear that the Republicans would win the presidency, back in call it November of last year, it became clear that 2025 was going to be a bit of the year of stablecoin. Uh and so far it it's it's it's true. It's been the year of very, very rapid growth in a range of different markets, lots of announcements, lots of people learning about it. Every board meeting has it on the agenda, and so people are learning about it. But I think one of the themes I'm taking away from this conversation is that it takes time to understand and learn all this stuff. And best ways to get started with something small and then build up that expertise over time. And if we play that forward, 2025 is just the beginning. Like next year is going to be even bigger in terms of volumes, in terms of folks coming online, and it'll continue in that direction. So I know it's a cliche, but we are still so early. Um we haven't even gotten to talk about on-chain effects or AI pedentic payments and micropayments, and we'll have to keep that for another episode. So as we close out this show, Chris, I'm gonna ask you a couple of rapid fire questions. And uh let's start with the first one. So this one's a simple one. If we project out five years from now, what does success look like for BVNK?
Chris:A trillion in TPV, for sure. No, I I think it's really having um having stablecoins feel like you're you know using Venmo or Cash App for a consumer. That's why I think like I think the industry's one there more broadly, and hopefully we can bring that about with some of these new products we bring into market.
Chuk:It makes sense. It means that you've got to be in where's all the payment time? Great, we gotta we gotta be there, we've got to have a product in there, and that makes a lot of sense. All right, okay, cool. So now to content. What does Chris read or watch? Favorite book, movie, TV show, or any other kind of content.
Chris:I'm actually at the moment busy reading um Michael Dell's book, Autobiography. It's called like uh I think it's called Play Nice But Win. Um the big tech privates, you know. So I I I read a lot of autobiographies, like spend a bunch of time listening to entrepreneur stories, and I try to hear it from the host's mouth. So yeah, that's kind of uh my uh guilty pleasures. Entrepreneur autobiographies, basically.
Chuk:Yeah, no, I mean it makes sense and get inspired for you know the things that you have control over also day-to-day. Okay, and then last one, who else in the space do you admire that we should bring on the show?
Chris:Oh, there's a there's a lot of good voices in the space. I'm trying to think like who'd be um should get Chad Cascarilla from PAPSUFs on uh on your your ex boss. Yeah, he is I mean, I think Chad's got a great story given like um not even just on the stable point side, but from the early crypto days, you know?
Raj:Yeah, we've got to make that happen.
Chuk:Right. I I'm gonna work on it. No, he's always has a lot of really, really good sound bites, historical lessons, uh, and just really good context on the history of the space and the space today. So we'll we'll make it happen. Appreciate the advice. Awesome, great. Well, that's a wrap. Thank you for awesome conversation. Where can listeners go to learn more about you and BVNK?
Chris:BVNK can just go to bvnk.com and I'm mostly active on LinkedIn at just uh Chris Holmes. Awesome. And you, Raj?
Raj:You can find me at Mana.xyz and also on X at Rajpark underscore.
Chuk:Awesome. And for me, it's stablecoinblieprint.com, LinkedIn, ChuckAcapelligo, and Twitter X Chuck underscore XYZ. Thanks so much for listening to Money Code. There was so much to take away from today's conversation. I learned a lot and I hope you did too.
Raj:If you enjoyed this episode, do us a favor, share it with someone you know, or give us a five star rating on Apple, Spotify, or wherever you get your podcast from. Until next time.
