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
From Checkout to Cross-Border: Stablecoins for E-Commerce w/ Eric Barbier
Presented by Stablecon Media and Powered by BVNK
In this episode of Money Code, we chat with Triple-A founder and CEO Eric Barbier who explains how web 2 merchants accept crypto/stablecoins without touching them, why B2B payouts are exploding, and what really unlocks global scale: bank relationships, licenses, and compliance.
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.
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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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The issue in payments is not Swift. It's the payment correspondence model, which gets even more complicated with capital control imposed by some countries. That's why stablecoin is not a magic recipe. And that's why today all the successful use case or everything which is currently being used with stablecoin is people who are actually bypassing instead of holding my money in my US dollar into a bank because I can't even open a USD bank account in most countries around the world. For the first time, I'm able to hold directly on my mobile phone and directly on my wallet. I can finally open a USD denominated account. That's what people want. People they don't want stablecoins, they want US dollar. That's the key.
Chuk Okpalugo:This is MoneyCode. It's a show where we decode stable coins and programmable money so that you can better prepare for an on-chin future. I'm Chuck Okpalugo, your host and author of Stablecoin Blueprint, and I'm here with my co-host, Raj Perekh, Head of Stable coins and Payments at MONAD. How's it going, Raj? Action fact. I feel like the stablecoins place never sleeps. Especially this week. Today we're super excited to be joined by Eric Barbier, CEO and Founder of Triple-A, the first digital currency payments gateway to be licensed by the Ministry of Authority of Singapore. Good morning, Eric. How are you doing? Thanks for having me, Trick and Raj. Yes, so for those who don't know, we uh uh me and Eric are currently in Singapore. Uh I'm here for Token 2049, and the timing is great to capture all of us on the same time zone. Raj is based in uh the Pacific, and it's just this is the best way it all worked out. And uh a funny little note that of yesterday as I came in to Singapore, trying to use all the various different ways to get around, and they have GraphTaxi, which is the Singapore version of Uber. Uh and I can see that Triple-A was a funding option. And so we're gonna get into that, how that all works and how crypto is becoming more and more a widely accepted funding mechanism. But before we dive in, just a quick note 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, and nothing we discussed today constitutes investment advice or any other form of advice. Okay, so so let's dive in. So just to give context to that anecdote there, Eric, for those who not who are not familiar, can you just explain what is Triple-A? What are the problems that you're solving in payments?
Eric Barbier:Yeah, so Triple-A is a company I started like five years ago. Um headquartered in Singapore. Before that, I started a company called Choose doing uh traditional cross-border payments. And so Triple-A's role is really to help uh traditional businesses like Grab that you you mentioned, uh working with Farfed, so the traditional web to e-commerce platform to be able to offer to their clients the options to pay with digital currencies, with crypto, with stablecoins, but without them ever touching stablecoins. What we're seeing is like today, 99% of our clients are not ready to jump into the stablecoin world. They're not ready to have their own wallet, they don't want to get questions from their auditors, changing their process and everything like this. However, they're happy to sell to the 400 million people around the world having some form of uh crypto stablecoin. That's really the uh the problem we're solving.
Chuk Okpalugo:And so how does it work? Let's say um and it's what it's funny. I uh I tried to use the Triple-A funding mechanism to fund my grab account. Uh put me through a KYC process, and I was like, I'm ready, I've got my card, I've got my ID. And then he asked me for my my residency. Um, you know, I put you know US, and I was like, nope, sorry, you have to be a local. And so there's KYC, that's part of the flow embedded. But then I'm presumably after that, I could have just sent stablecoins, you would have done some mechanism to change it into local fiat, and then fund the partner, uh, in this case Grab. If you could just walk through how that process would work, uh, that'll be helpful.
Eric Barbier:Yeah, yeah. So uh so today, on top of the existing payment options, so maybe if I take a step back. So Grab has an app pay wallet, as such they are themselves, they are also licensed as a uh major payment institution, so they can hold e-money, so it's a uh it's an e-money issuer equivalent. And to form this e-wallet, you have different payment options. It can be through cars, can be through bank transfers. And so what we enabled them to do something like over a year ago, was to add top-up with digital currency. So when you choose this option, you would choose which kind of crypto or stablecoin you want to uh you want to top up with. So we're supporting the traditional crypto like BTC and E, as well as the stable coin like uh USDT, USDC, PayPal USD. Uh, we also support the local stablecoin, XSGD, and so on. So that's all those options. So that first step is to choose which asset you want to use. Then you would need to choose which network. Uh so say you chose USDC, are you going to use it on Ethereum, on Solana, who we're supporting the main uh the main networks, and then you would get a wallet address and as well as a rate. So what we do is we guarantee the rate, meaning that no matter what is the volatility, if you're doing the transaction if you like the rate, and if you're doing the transaction during 25 minutes, you, as the user and Grab as the merch, is guaranteed to receive exactly this amount of money. And then the transaction happens in real time. Your balance is updated, and you can use it to purchase from anything Grab offers from taxi rides to food delivery and everything. In Singapore in particular, it's available across a lot of the smaller shops. So it's one of the most used cashless options uh for the you know street food in Singapore, which is quite popular and things like this.
Raj Parekh:Yeah, that's super interesting. I mean, I guess even to touch on this even further, Eric, you know, back when I was at Visa, BTC was reviewed as you know, a potential alternative payment network. It didn't, it didn't quite catch on as like a payment method because of the volatility here. But it sounds like for you guys, you can support both BTC crypto assets and stablecoins. Have you seen like a preference from your customers who are typically merchants? And you know, outside of Grab, my understanding is that you guys have Razor and there's there's many more merchants also. But maybe you can walk through like, have you seen a shift in merchants willing to accept stablecoins versus traditional crypto assets? And also, like, what is the impetus for some of these merchants saying, you know what, we actually are okay with this new alternative payment method and we want to support it. Like, I'm curious what the shift that you saw uh in the last few years that's prompting this as well.
Eric Barbier:So initially, when I started, there were really you know as many assets as possible and so on. And then there's been FTX, you know, so we you had more of the negative things on crypto. So some merchants, oh, okay, on my website I'm gonna only uh show stablecoins. What we've been seeing is obviously stablecoin is uh probably like 80% of the transaction we're doing. So, you know, the Bitcoin and ETH is still relatively small. I think it's more used for our uh luxury merchants. One example is Farfetch'd, fairly big ticket items. Uh, I don't think you can find anything below a couple of uh uh hundreds of dollars. And so you have the kind of thing is like, oh okay, Bitcoin went up, I'm gonna reward myself, I'm gonna change, I'm gonna buy myself a new uh a new watch or something. That's kind of uh one of the type of examples. But as we are moving into traditional payments, especially B2B payments, it's more and more uh stablecoins. Like on B2B, for instance, is 99% stablecoins.
Chuk Okpalugo:Okay. Maybe we can break that down then actually. Uh thinking I know that uh you've been in the game for a while, you've seen payments evolve uh back when, like you were saying, first human crypto assets were the focus. Now stablecoins, I'm sure, have become a much broader and larger percentage share of what people use. But there's also many different merchant segments and many different types of buyers. So maybe you could kind of break down how Triple-A looks today. I know you have the merchant acceptance side. Uh maybe you could work us through the types of verticals you've seen them as traction, and then the types of buyers that are purchasing. Are they global? You mentioned luxury. And then on the other side, you also do payouts and a lot of other types of transactions. So maybe you could break it down the types of uh use cases that Triple-A is supporting today.
Eric Barbier:Sure. So in terms of e-commerce merchant type of use cases, uh, we're seeing three verticals which are key for us. First one, luxury, so high or higher ticket items, like the far-fetch. And in all cases, our ideal uh our ideal merchants are big global merchants who are selling across multiple geographies. So I've mentioned luxury. Uh travel is a very big vertical for us because also one of the big pain points is that if you're from Africa, even if you have a credit card, when you want to purchase from an international site, typically, and travel is considered high risk in the card business. So it's very likely that your card's issued from a higher risk country onto a higher risk merchant. You know, the payment gateway, the at the end, the world pay in the middle just say, hey, I'm not taking the risk, I'm declining the card so that there's no risk of chargeback, which is costly and creates a lot of lot of issues for everybody in the value chain. And the beauty of stablecoin payments is that there's no risk of fraud, there's no risk of chargeback. That makes it a very merchant-friendly payment option compared to card in particular. And the the last segment is you know digital games, video games, uh, mentioning Razer, we have plenty of clients in this uh you know digital content. One of the beauties that those guys can sell anywhere because they don't have ship goods to someone. So last time I checked with Razer, I think we're processing in over 160 countries. So with one single payment option, they really can sell across the world.
Chuk Okpalugo:Yeah. And it seems like there's a clear trend there. Maybe slightly less with the luxury side, but in all these cases, there's a global element, a cross-border international element, particularly with travel, as you mentioned, where the merchants can are global, the consumers are global. And luxury, of course, you know, depending on how early you were into the crypto space, some of your assets may be in crypto and therefore makes that a very viable payment option. Uh and then, as you said, with digital goes against a global global element. So on the one hand, merchants are able to accept payment from customers globally quickly. And we saw that with Stripe as well. They mentioned a huge number of additional countries that buyers were coming from initially when they opened up crypto payments. And then uh in addition to that, from the merchant perspective, it's just a really simple integration. You integrate once, and boom, you've got access to KYC buyers from all these different countries. I guess we could talk about that maybe a little bit. On the compliance side, uh on the purchasing side, does the KYC process occur for every buyer in all those different flows?
Eric Barbier:So so yeah, so KYC, all the compliance process is quite important. And so that's why you know we're licensed in Singapore, uh, we're licensed in Europe, uh, we're licensed in the US. Um so so so we have a pretty extensive checks that we're doing, uh, you know, the traditional transaction monitoring that any any PSP would do. But also what we're doing is the things which are specific to the crypto world, uh, because it's based on the blockchain using blockchain analysis too. So what we're able to do is that uh we're able to detect and block transactions which uh would be linked to sanctioned entities, which would be linked to illegal activities. Um and so we no matter how many hops people have been trying to escape or to clean their coins, uh, we're still able to go back to that and we're able to detect and block that. So in this case, we would tell the merchants do not own or do not ship your goods or services, and we would we would do a manual review, potentially file an STR or freeze the asset if it's sanction related. So that's some of the checks we are uh we're doing. Uh on top of that, we're compliant with the so-called travel rule, which is the making sure that all the KYC information, the information about the payer and the payee, are being transmitted VAS to VAS, virtual asset service provided to the others. Uh so that's all the all the checks which are being done to make sure that it's fully compliant with the regulation and that people cannot use, I don't know, the proceed of a scam, for instance, to be able to uh launder their money and buy something from one of our merchants. So we're protecting our merchants against that.
Raj Parekh:That's awesome. I think that's a that's like a I think a really important point, also just on the compliance front, because I think you know crypto sometimes gets a negative rap on you know what's what's possible on the compliance front. But to your point, you're screening every cryptocurrency address. You're also you know cross-matching that with the sanctions list. And then from there, you can actually build controls and policies around it so that you know those assets actually never make it to your customers or in the workflow. And then you guys can work with law enforcement accordingly as well. So I think it's a really important point that is sometimes overlooked and it's easy to dismiss the future of stablecoins as it relates to compliance, also. Um, so that's actually a really helpful breakdown. And I guess like one question for you, Eric. Like, you know, we've talked about the pay-in side. So the grab experience, you can now go and you know, spend your stablecoins and then you know quickly use the grab app, especially if you're a Singaporean resident. You also alluded to getting licenses across many markets and like a payouts business. But how have you seen like the business for Triple-A evolve from that initial route of pay-ins with you know for merchants to now you now have you know multiple licenses across multiple jurisdictions, also? And like what else has that opened up for you guys as a business?
Eric Barbier:So we started uh our first use cases were more like the e-commerce, uh, everything I've been speaking about. And then as we started to work with marketplaces, so we've been helping them on the uh payment acceptance, but very quickly, they were also interested in helping some of their sellers, especially sellers in emerging market, to receive their payments into stablecoins. So, for instance, we're working with freelancer marketplaces. So if you're a freelancer, say, I don't know, in Nigeria or in Bangladesh, it is very likely that you will prefer to receive USB T or USB C instead of NERAS or PACAS. That's the kind of payout uh we've been uh we've been processing for uh uh for marketplaces. And we're seeing all types of use cases in terms of payouts. You can start like maybe a $1 payout content creator in Egypt. Because the beauty of stablecoin is that, you know, especially with the modern uh network blockchain, it's virtually zero the cost of uh of doing a transfer. So it means that you you could imagine in a world where you know uh instead of paying people uh on a monthly or weekly basis, you could pay them like uh every every five minutes. And and so that's great for a content creator, you know, he's not sure he's gonna get the money. And so you can make pay out as low as uh uh as one dollar. So that that's one of the use cases. Then you have like bigger amounts, you know, free answers and so on. And now we're seeing more and more B2B transactions, uh import export being done over stablecoins. So in this case, the amount can be really large. So the average, average transaction amount can be really large. So so so that's all the use case we're that that we're seeing.
Chuk Okpalugo:Aaron Powell And in those B2B transactions, are they going from fiat to fiat through crypto assets? They're starting in stablecoin and sending to fiat, or is it starting in fiat and sending to stablecoin or a combination of the above? Could you break that down? Because I I hear a lot in the the kind of supplier market, depending on where they're paying, if they're paying out into Asia. Trevor Burrus, Jr. There's often a lot of folks who actually accept tether as a payment method, but not necessarily on the sending side do they have it to send, or the other way around.
Eric Barbier:So so so you you usually one of the legs have stablecoins or wants to accept stablecoins. That's our primary market. So uh you know, for instance, uh you're an exporter from Hong Kong, you know, you know, manufacturing stuff from China, uh, usually you you export via Hong Kong. And you're selling into uh say Africa, and your client there or in Vietnam, and your client saying, hey, uh it's difficult for me to get access to the US dollars. Not enough liquidity, the banks are super slow, super expensive, uh zillions of paperwork, and so on. But I'm able to get access to USDT uh or USDC, for instance. Could I pay you with that? But the guy in Hong Kong saying, oh no, you know, I'm I'm a traditional business, especially with China, you know, crypto is not uh very well perceived and everything like this. So what they're and that's why they're approaching us is saying, hey, can you process this payment so that I only receive Hong Kong dollars or Chinese Yuan or US dollar, depending on their preference, uh on my bank account, uh, but still my clients would be able to pay with uh with USBT. So that that's exactly the kind of use cases we're seeing and we're processing.
Chuk Okpalugo:Yeah, I think it's super interesting. The stablecoin sandwich has been the term used to help, I think, a lot of folks understand the potential of stablecoins. But actually, and I haven't seen this data. There's no like single source of this data, but actually I I from anecdotally from what I've heard, I think the majority of volume is stablecoin on one side, either fiat to stable or stable to fiat.
Eric Barbier:I agree. I'm not a big fan of the the stablecoin sandwich. I now I I'm calling it or what we're uh to describe what we're doing, it's like more of the open face sandwich.
Raj Parekh:Um Yeah, I also I also don't like that term. I feel like the stable coin sandwich term is like, yeah, we need to change that. So I'm glad you're on board with that as well, Eric. We need to we find a new term for it.
Chuk Okpalugo:But yeah, I think someone of I think you you yeah, you mentioned open face sandwich needs to be a catchy, you know, one-sided, let's do like a brucchetta, but that's not that's not catchy enough. Anyway, so um we'll what I find is super interesting about that is that what you mentioned is you know, some of these cross-border payments are just super, super challenging for many different reasons. It could be capital controls in a particular nation, uh lack of access to US dollars, or they do actually have access to banking. But because it's global staff to global south, then that needs to hop through multiple correspondent banks in order to get to its end destination. And that could take anything from three days to 14 days if you get your money and if, because oftentimes the things still do get lost. And I think there was a really interesting uh announcement this week at T-Bot where Swift said, finally, look, guys, we're gonna work on our blockchain related to our Swift payment mechanism. And they went into some details about how they're thinking about it. And um, there's a lot to come there. But you can imagine a world where, okay, well, there's lots of different things that are broken in the kind of traditional banking space. I would love to get your thoughts on uh what you think the potential is for that and the effects of that on global payments, particularly if banks globally no longer need five or four or five correspondent banking relationships, they can just hold direct non-tracts or actually just hold global dollars or global currencies. And now any bank, global south to global south, can just use Swift to message each other. Uh, how do you think that affects uh kind of the cross-border demand that you're seeing?
Eric Barbier:I think the the issue in in payments is not Swift, is the payment correspondence model and which gets even more complicated with capital control uh imposed by uh some countries. So that's why stablecoin is not a magic recipe. And that's why today uh all the successful use cases, everything which is currently being uh used with stablecoin is people who are actually bypassing, especially in an emerging market. Is that instead of holding my money in my US dollar into a bank, because I can't even open a USD bank account in most countries around the world, you can only uh use the local currency. Here, for the first time, I'm able to hold directly on my mobile phone or directly on my wallet, or maybe I'm trusting an exchange, I don't know, but I can finally open a USD denominated account. That's what people want. People they don't want stablecoins, they want US dollars. I think that that's the key. So, and your question is whether the banks and especially banks in emerging markets are gonna be able to embrace this. I wouldn't hold my breath because the thing is that their local uh regulators may not be ready to do that. However, just the the existence of stable coin creates a pressure for a lot of countries to open up. And instead of telling, you know, many countries are saying, oh, my my currency is worth this. But the reality is that, you know, uh, and you can see that on Binance and on many exchanges, is like, no, it's there. And obviously, some governments are not happy with that, but that's that's you you're getting the real market data from the stablecoin market. So I think for the banks, especially banks in emerging market, it's gonna take a lot of time.
Raj Parekh:Yeah, and it's interesting because you know this actually dovetails in a in a way when you're experienced building tunes. And you know, for those, for those of you that don't know, like Eric also is the founder of Tunes. Um, Tunes is one of the you know premier cross-border payment companies in the fiat world uh for a long time. But you know, I think the way that you talk about this experience with Swift, Eric, it reminds me of like, you know, you you're you actually have a lot of hard-earned battles back in the Tunes days as well. Like, I'm curious, just like some of the experience that you've had at Tunes. Maybe quickly explain Tunes in like your own words, and then how that, you know, how that experience potentially changes with with stablecoins, or you know, does it at all as well?
Eric Barbier:The idea of Tunes when I when I started the company was to make an international payment into uh mobile wallets. The idea was to say that in emerging markets, uh, people are gonna be banked through their telco or through uh uh an e-money issue or something like this instead of going to the traditional banks uh and so on. And you know, the examples were and Tesla in Kenya, Bcash in Bangladesh, even back then, uh Ali Ali Pay or Witch Hat Pay in China. When I started the company, uh it was a bit tough because you know, back then that was 2010-ish. And you know, what I would say, you know, sending money onto a mobile phone in Africa, you know, those guys they don't have enough food, they don't need a mobile phone first. So even less uh an account on that. But you know, now it's kind of obvious that uh you want to do a payment like this. And so in in effect, Tunes has built over the years a parallel network to Swift, uh still using Swift for uh for the wholesale transfers, uh, but still uh being able to offer a real-time uh payment system because especially one of the big use cases, remittances or payouts to content creators, and so everybody's expecting, especially when you have a technology like uh uh a mobile wallet, that things happen in real time. But behind the scenes, one of the big issues uh we had is that for this model to work, you have to pre-fund all your partners through Swift, and that means that there was a lot of working capital which were trapped. Uh it meant as well uh that sometimes you couldn't, you know, you were forced converted uh into the local currency, meaning that you were taking uh a currency risk. You were taking a huge counterparty risk. You know, uh one of the examples I like to give is like uh, you know, at the end of Ramadan, people are sending a lot of money back home because it's a festival and so on and so on, but the the banks are closed for a week. So it means that you have to pre-fund a lot of money to your Nigerian partners or Pakistani partners and so on. And maybe it would be worthwhile, it would be better for the guy to take the uh to take your money on rent. So so I was not sleeping very well during that time. And that's really something that stablecoin is really solving now.
Chuk Okpalugo:Aaron Ross Powell Right. And I I think the prefunding problem uh is one that folks that are in the space are very excited to see get solved. I think there's an inherent scale required to do cross-border payments cheaply and quickly. And so I think there was a, as you probably saw uh several months ago, huge foroar on stablecoin Twitter and LinkedIn when airwall CEO Jack Zhang said, hey, I don't really see the value of stablecoins, guys. Like uh for modern or like the G7 currencies, uh it's fine. You know, it's already less than a second, less than a cent. Um yeah, for sure, maybe some cross-border flows and exotic currencies, uh, maybe some regulatory arbitrage, you know, those two things being very big. But the the point was, hey, we're actually very good already at the G7 currencies. But hiding the fact that to get to that point, billions of dollars of investment in capital were required. And so with today in stablecoins, I guess the promise is that hey, you can actually start a cross-border payment corridor, multiple corridors and whole operation with far less capital. Because essentially the liquidity needed to go in and out of currencies is now held in a more decentralized way. And what I mean by that is by market makers, exchanges, banks, and so on. And if you can plug into that shared liquidity, then your own capital needs are less. And I was wondering if you could help the audience kind of break down. Do you see that as well, obviously, with the experience of Toons and also now having to manage currencies and payouts and pay-ins across border for Triple-A? Are you seeing prefunding as a much lower amount? Are you seeing the process more to be more efficient? How are you managing that liquidity and the volatility of the different currencies?
Eric Barbier:Yeah, for sure. So so that's one one of the reasons I started Triple-A. Once I realized that uh stablecoins uh were solving this issue, which was a major pain point because I had to uh to to your point, I had to raise money just uh and raising equity just for that. So that's very expensive in terms of dilution and everything. So and we're using it daily today to to move our internal treasury through stablecoins, and that's completely uh game changer. And it's interesting. The the the the Jack's post uh from our wallet was like, I hate it, and I remember I had many discussions with him as well. And it's like, oh um no, it's interesting. Maybe we got a partner, um oh no, it's so important. I want to build everything in house. So it's very uh very interesting to see. After, as you said, for pure G7 to G7 currency, I would say for financial institutions, there's still some efficiency to get from stable coin. But if you look at the level below, like if you if you take a multinational uh operating between Europe, Singapore, uh, US, and so on, they probably wouldn't get much value from having themselves and to manage themselves uh stablecoin. Uh that's my uh I think the the current banking system is already super efficient.
Chuk Okpalugo:And just and this may be a hard question to answer, but how can you help folks understand how much more capital efficient it is to use a global dollar for cross-border and treasury management than the pre-funding model? It's a probably a hard question because the startup costs that need to be amortized of the number of transactions that you do. But if you could just give us like a rough breakdown of okay, for a traditional payment, x percent of the cost is paying off the prefunding amount. And therefore, that's how much savings there are if you could build cross-border payments just on stablecoins.
Eric Barbier:Uh what's easy to measure is like the cost of funding. So, you know, it means that you have, if you just take worst-case scenario, like four days with a long weekend, a bank holiday, uh, maybe five days and so on. So, and so you measure how much it costs, you know, having five days of working capital. But there are things you're not able to measure, is that if you're sending dollars to your correspondent in India, it gets converted to Indian rupees, and then the rupees fluctuates, and then maybe in the wrong direction, it might be sometimes in the right direction. For some reason, it's always in the wrong direction, based on my experience. And then you have a problem, is that you have an inventory of currency that you overpay. So you either have a hard time reselling it, or you need to take a hit on that, and that's difficult to measure. So you could try to measure it, uh, but uh, you know, I did not know. I I would have such hard questions today. Uh I know we put you on the spot there. Thanks for that. But I no, I'm sure you can baked a model where you you would hedge the currency. And so the cost of hedging, you could add that. But uh we can give dive next step.
Chuk Okpalugo:For those who don't know, uh, you know, we shared a bunch of questions with Eric before. This one just popped into my head of like, you know what, this we're on this topic. I'm really curious to find out. And the the reason for it is obviously you've we're all payment payment nodes here, and we're keen to understand all the various different edges that stablecoins have. But you know, I've spoken to a lot of cross-border payments infrastructure providers who say, look, I've I've set up my infrastructure in such a way that I am now cheaper than name your traditional Web2 cross-border B2P payments provider. And compliance is the same, but has less operational staff, less pre-funding capital. I have to raise less money. And so I can still make a good margin and charge way less. And so it's a matter of time before I start to win over their business because I can just go to the customers and say, hey, I I can give you the same thing, but for less. And as you mentioned, it's very, very hard to kind of do it side by side because there's so many things that go into the traditional prefunded model. There's the capital that you need to raise, which is like you said, it's it comes out of equity, it doesn't come out of any individual uh transaction. Then there's the currency cost, uh the volatility that you're holding, there's risk. You know, sometimes you win, sometimes you lose. And then the every so often when you are underfunded in a particular area and you have a large payment, you need to use emergency funding of capital to like get that capital there. So all these different things make it very, very challenging. And I guess what we're going to have to find out over time is how do the customers who make the final buying decision how do they decide? You know, people will decide with their feet, as it were. And I think over over time, the air wallets, the Tunes have been taking share from banks. And then now it remains to be seen how much share will shift to the stablecoin driven or stablecoin powered corresponded payments players.
Eric Barbier:But don't don't underestimate the additional cost or complexity whenever you're adding stablecoins. You know how do you manage your crypto wallets? What are the permissions? How do you put that into your accounting software? Most accounting software are not able to account for USDT or USDC. How do you get your audit done? You know most auditor, you know, you you go to price, you go to UI, you go to, you know, as soon as you're saying you're touching crypto, they freak out. And the price you're going to pay is like three or four times the usual cost of your financial audit. And I could go on and on in some jurisdiction it means that you will need to get a crypto license. So Mika in Europe or a digital payment token in in Singapore and the other jurisdictions. So yes there's a lot of efficiency and so on. So I'll be the last one to to uh say that uh a stable coin is is is not working but you need to be careful uh when you want to go into all this uh all this complexity because whether you like it or not the risk profile from an AML perspective is higher than the traditional banking system. As I mentioned at some point there's a way to mitigate the risk and so on and so on. But it's a higher higher risk profile.
Raj Parekh:And to me and to your point the tailwinds are just you know just beginning right you've been building you know triple A for five years now and we've just got the Genius Act in the US or we just have you know Mika in Europe. So to your point there there's still uh you know a long way to go and you know a lot of the infrastructure is hard. One thing that I don't know if we've touched on enough is the international and globalization of stablecoins and the ability to like I think you're saying with Razor that you guys can now receive payments in 160 countries. You've built Tunes for over 10 years. Like I don't know if you can draw a parallel to like how fast you could globalize a business with stablecoins versus what you saw on the traditional fiat side and like what are some of the constraints you're still seeing in stablecoins maybe outside of the regulatory stuff to like really scale like globally as well.
Eric Barbier:Yeah you're totally right it's an order of magnitude because when I was building tools it's like you go to Kenya you need to make a deal with MPESA you need to convince the retailer even to send money into the country you need to get a permission so that takes a long time that's the uh that that that's really uh really complex where stable coin by definition is global so yes uh in terms of global deployments stablecoin is amazing the things which are still we need to improve as an industry is everything which is related to the wallet to the blockchains you know it's still a bit geeky it's amazing that you know there's like like 400 million around the world having crypto it shows how important it is for people so even though the UX is not amazing I have USDC on Solana I still need to have Solana so what is Solana to pay for the gas what is gas you know even though it's like next to nothing you still need to have that so it's it's far from being perfect. So I think that's the the this whole UX thing uh which is getting proved you know there's all the the new uh stablecoins they're really really early but the new stable coin uh blockchains where the gas fees is paid in stablecoins uh it looks like there's just so many initiatives so we don't really know who's gonna win in this battle and we probably need something which would be agreed by the whole industry as opposed to like at the moment every player you know stripes trying to push their own uh circle their own and so on uh we all know that's not gonna work and we we need something which is gonna be accepted by the whole industry but I I I'm pretty sure it will it will converge over time. But you know that's all the things we need to work on to make the uh the the user experience better.
Raj Parekh:Maybe we can dive a little deeper there as well I mean Eric just like to get your point of view I mean you're kind of a unique lens where you you work with you know these web two merchants and to your point we need to fully abstract away some of the crypto complexities on the other side you know you are seeing the early innings of our industry where there's you know the Stripe project there's Circle there's there's all these new entrants that are also coming with their own mixture like from your point of view for your own product how are you deciding like what are elements that you bring into the Triple-A infrastructure that you then enable for that full abstraction and and what are you kind of just you know waiting to see and for more maturity to take place as well.
Eric Barbier:On our side you know we're really driven by what people are using. So if they're using this stable coin on that network that's what we add onto our stack. So so we're not going to be the one who are going to drive you know this or that uh blockchain because that's those things are are really really big. So on our side it's more like what is the uh the market demand if people are uh are telling me oh I need stable coin why and we're starting to see that maybe local stable coin in Europe it has not taken off but it it looks like maybe in Japan uh maybe in the UAE there is you know strong push from the uh from central banks uh so then we will see the adoption but you know on our side it's for us to adapt to what people uh need.
Chuk Okpalugo:Yeah absolutely uh and this shows why distribution is so important but just before we move on to the next question just wanted to take a quick moment here to thank the sponsors that make this show possible 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 okay thank you to our sponsors so one of the things that I think that we touched on a bit here was just the the number of people and different stakeholders in the stack that you need to interact with. We mentioned that a lot of the transactions of stablecoins on one side which means that there's a lot of interoperability or call it backwards compatibility with fiat. That's the way that business is is done today. And so you need to have I'm sure strong relationships with banks and other avenues into the fiat world. But I'm sure over time that has been challenging just with the notoriety of crypto. So given the risk aversion of banks can you maybe talk about your journey of how you've built trust with them and how they're becoming more and more familiar and comfortable with the various different risk mitigations that you mentioned?
Eric Barbier:Yeah so yeah as you rightly said banks they hate crypto or anything crypto related as simple as that. The good thing is like because in my previous business at Tunes we were already in the remittance business and they hate it as much more or less because you know person-to-person transactions are very you know have a higher risk of uh AML and specific financing uh so I've I've I've been used to take uh banking relationship as something very serious and that's the reason we've been investing so much into licenses compliance team because getting onboarded by a bank is even worse than getting a license. So it's a one year process. Fortunately or unfortunately they're putting the best compliance guys on those tough topics so they're asking the tough questions. So so uh all around our our control in place and and so on. And that's also one of the reasons uh we have a fairly conservative risk appetite in terms of the clients we're on board we don't work with higher risk merchants and so we're very selective on that uh in order to uh to and and to align with our banking partners uh but yeah they are absolutely essential uh it has obviously improved uh since um especially in the US where it was extremely difficult you know we like most people in the crypto industry you know we lost like two or three uh bank accounts after uh Silicon Valley bank uh disaster so absolutely today the risk appetite is uh slowly going up but it's still not like uh you know open door uh and so on right it's still one year ish due diligence process some banks are clearly more open and that's the risk is that so some some of the banks they they they don't tell you no ones say oh yeah talk to me more but it's just about education and you know they are not ready to do that so it's a big waste of time uh so you need to be uh you need to be careful with uh with those guys yeah so so it's very slowly improving but still a big big uh and it's the biggest uh I would say it it it's the you know critical element.
Chuk Okpalugo:Do you think that that is one of the or if not the major unlock uh as we think about the next sort of five to ten years? So obviously the Genius Act has been passed in the US, the working on market structure, the largest piece are getting into the game and um people often say that the US really sets the tone in financial markets regulation given that its size and its its uh maturity. Despite Singapore having been very, very far ahead and with a really strong framework, UAE also and then Hong Kong and others catching up, the expectation is and I'd love to get your thoughts on this that global banking regulation and compliance frameworks will follow what's happening in the US and so over time either by you know it coming from top-down leadership or because their competitors start to enter the game and start building business banks globally are starting to become more and more will increasingly become more and more amenable to crypto type businesses. Are you seeing that? And and if so what does that unlock for your business and crypto in general?
Eric Barbier:Yeah in the US as I said it's slowly going back. I think they're still missing a lot of guidelines. So they just got repealing a lot of the negative everything from the previous administration uh but they still don't have positive guidelines. And so I I think they're also still waiting for their regulators. I know some banks which have you know they they were asked not to in the US asked not to get more business or especially not more critical business. I think they still didn't get the green light. So so I I think because everything's still so new the Genius Act is more on the issuing side than you know the all the money laundering risks, CFTG risks I think that you know they have not yet translated through the regulators on the prime US and that there's plenty of regulators. We were so spoiled in Singapore we have only one regulator for everything. So so it is gonna take time banks are not willing to move super fast and especially some of them which got burnt when they were too crypto friendly and some of them shut down. So I I I think it will take time. A lot of the to your point a lot of the international banks the non-US banks because they're they are having a big correspondent business with the US banks they are waiting also for their counterpart to give them regulation because usually if you take uh Europe or Singapore regulation is super clear of what you can do in terms of everything crypto related but they are not able to take more risk because of the risk appetite of uh JP Morgan or you know Citibank all their big correspondent banks and you know if you're DBS there's no way you can you can lose access to the US dollar, right?
Chuk Okpalugo:Yeah and so what will what will that unlock for you then? Because it it does seem uh and this is definitely a cliche people always say we're so early but when I hear these factors it seems like we truly are still so early from a regulation perspective, the banking relationships and yes, the infrastructure is being built, all the UX problems that you mentioned. And so today you have worked really, really hard and leaned on prior relationships to get the access that you have when this let's say over the next several years it takes time but over the next several years becomes easier does that reduce your cost? Does that enable you to access more markets than you already have is it more really redundancy? Like how does that unlock things for you at Triple-A?
Eric Barbier:Yeah it's gonna be uh opening more uh countries it can mean uh you know reducing the cost for us yeah it's really important and in the future as banks will embrace this technology and I think it's gonna start by banks in developed markets so uh US Europe uh and so on there will be also an opportunity to work with them as clients. As clients as then uh help them to receive and send okay yeah uh maybe Eric before we before we jump into a few rapid fire questions maybe you could just share you know we oftentimes have a lot of fintech founders that are listening you know to the pod here what are some of the hardest lessons that you've learned from either building Triple-A or Tunes that you know you would part with you know for some of these founders that are listening in um right now so especially in the crypto financial in fintech in general so you need to invest in compliance yourself you need to understand that uh compliance is not a it's not like technology which you you can outsource it is a control function that you need to understand. So so the logic is very different when you say oh I need something something for finance I need something for tech you know oh I'm gonna find a finance expert compliance doesn't work exactly like this and that's the knowledge you you need to uh you need to learn by yourself. The other thing is like go to market as early as possible. If you if you're you know talk to your clients you know show them uh an MVP uh don't wait for your product to be perfect that's the biggest mistake we do as entrepreneurs is like you you you think that you know what uh the market wants and you you're trying to get something perfect instead of talking to your customers as early as possible.
Raj Parekh:Yeah I think that's great that's great feedback and I think the best the best fintech teams that I've ever seen they treated compliance like a product they would staff like a product manager there they would have like an engineering team in addition to like the legal and compliance analysts also. So I think it's a great piece of feedback right there.
Chuk Okpalugo:Yeah I'm gonna jump on that actually so for all the new folks all the new founders building in the space that listen to this episode and say Eric told me I need to be a compliance expert. Okay now I need to go figure out compliance how do they actually go about doing that?
Eric Barbier:You know very often people are saying oh I'm gonna get a license I'm gonna get ready made compliance men but it's really the ready made maybe you paid a lawyer to do that and which has nothing to do with your business. Any regulator is going to throw back at you saying hey this is just generic things. Yeah getting trained that would be my biggest advice.
Chuk Okpalugo:Okay sounds like there's a business opportunity there. There's uh all these startup founders who are going to be looking for compliance training uh but focused on cross-border stablefund compliance. Little tip there for anyone building companies. Okay so we have some rapid fire questions for you. So uh start with an easy one. If we project out five years from now what does success look like for triple A?
Eric Barbier:Five years uh fully we would be at what uh 200 million uh revenues awesome exciting when we're still doing the podcast then we'll get you back on the show and we'll we'll we'll talk about how you how you're doing 300 and 400.
Chuk Okpalugo:So the next question I guess personal interest favorite book movie TV show or other pandemic?
Eric Barbier:This one is tough. I don't spend a lot of time doing uh anything else than FinTech.
Chuk Okpalugo:I'm a big fan of uh René Girard uh that Peter Thiel uh likes very much but I I I'm not sure he understood uh or we maybe we disagree with the interpretation so all the uh René Girard book uh you know he was up stand for I would uh I would advise there's a very nice one uh on Shakespeare I for I forgot the the the exact title awesome and then last one um who else in the space do you admire that we should bring on the show uh lots of admiration for the people uh at Flowdesk doing uh market making I think you should uh you should think of uh inviting them so that's the wrap for us today thank you for a great conversation Eric uh it's always good chatting with you where can listeners go to find more about you or triple a you can find me on LinkedIn I'm trying to connect with most of the people uh so so probably LinkedIn is uh is the best way to reach out to me if you're not following Eric already you should he puts out like very insightful posts uh on a regular basis so highly recommend uh what about you Raj where can folks go to find to you yeah you can find me on X at Rajparek underscore and mana.xyz awesome and for me you can find me at stablecoinblueprint.com on X Chuck underscore XYZ and on LinkedIn ChuckOcopoludo thank you for listening and Eric thanks for your time thanks again Eric thanks so much for listening to MoneyCode there's so much to take away from today's conversation I learned a lot and I hope you did too.
Raj Parekh: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.
