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
Stablecoin Use Cases From Dollar Access to Onchain Lending w/ Cuy Sheffield (Visa)
Presented by Stablecon Media and Powered by BVNK
In episode 9 of Money Code, hosts Chuk Okpalugo and Raj Parej are joined by Visa’s Cuy Sheffield to discuss how stablecoins move from speculation to real-world finance: dollar access at global scale, stablecoin-linked cards, cross-border flows, and the next frontier (onchain lending and agentic payments) plus what banks, fintechs, and regulators must build to compete.
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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If you're a a stablecoin wallet provider today and a consumer you know pays directly in a stablecoin at a merchant, funds are actually leaving your platform. And today you don't make any money on that. Like that that is actually net negative. Like you actually wouldn't want someone you know to spend in a merchant.
Chuk Okpalugo:This is Money Code. It's a show where we decode stablecoins and programmable money so that you can better prepare for an on-chain future. I'm Chuck Okpolugo, your host and author of Stablecoin Blueprint, and I'm here with my co-host Raj Perekh, head of stablecoins and payments at Monad. How are you doing today, Raj? Doing amazing. Uh we have an awesome guest today and a dear friend, so I'm excited to jump in. Yes, it's a bit of an extra special one today because we're joined by Cuy Sheffield, VP and head of crypto at Visa, who's been one of the longest running and most vocal advocates for stablecoins and tokenization. And Raj's former boss. So uh really appreciate you joining us today, Raj.
Cuy Sheffield:Um Cuy, how are you? It's great to be here. I'm a huge fan of the show. You guys are killing it. You got amazing guests, uh, great content from operators in the space. So just honored, honored to be here.
Chuk Okpalugo:I appreciate that. So before we dive in, just a quick note. Money code is brought to you by Stablecon 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. Oh, so Raj, given the background here, do you want to take it away?
Raj Parekh:Yeah, sure. I mean, first off, um, you know, Cuy, uh, Cuy and I go way back. Um, Cuy is obviously uh a close friend, a mentor, uh, my former boss, like like you called out, Chuck. Um, uh I want to maybe start with a quick story because um there's, you know, I think fast forward now, it's been like you know six years and we've been really deep into the stable coin, um, you know, programmable money future. But the early days of Visa Crypto is probably one of my favorite moments in my career so far. And I actually have a lot, uh, you know, I think it's a lot of it was because of Cuy. Um, Cuy was uh definitely the I would say patience zero at Visa, uh kind of speaking the gospel of blockchains, of crypto, of stable coins. Um he uh he pulled me in and you know, I was a I was a product manager at Visa. I was working on other parts of the organization. I was definitely very curious about crypto and stable coins, but uh it was really Cuy who I think uh you know, even if we were just joking before the show, but I still remember a stablecoin 101 workshop where Cuy was breaking down Tether USDC, and this has got to be like Cuy like five, six years ago now at this point, where we used to bring the Visa organization to come to these um these sessions where we would just explain these basic concepts. Um, and and just like being having a front row seat to you guys been has been awesome, just being a real voice for the industry, but also kind of pushing Visa forward as well. So I'm I'm particularly really excited to have you on it. And you know, maybe we can spend some time talking about just you know, your you've spent a lot of time thinking about the intersections of of blockchains, but also just going back to Dhawk's vision as well. So there's a lot to unpack here, and I'm just super excited to have you here as well.
Cuy Sheffield:Yeah, I appreciate that. Um so where where do we start? I mean, I I like to think myself as you know, I was the the crazy crypto guy at Visa, yeah, one of the crazy crypto guys at Visa. And I still am you know the crazy crypto guy at Visa. Um you know, I came to Visa through the acquisition of Trial Pay, was really grateful, you know, first job out of college to get to work for Alex Rampel and Terry Angelos, and just brilliant um, you know, entrepreneurs. Uh, but I knew nothing about payments and I knew nothing about crypto. I woke up one day and they're like, you know, we're selling trial pay to visa. And you know, I was you know in the you know, doing ad tech sales and you know, going to affiliate summit west and you know, I was kind of in the in the advertising ecosystem. And you know, I came into Visa and I had this really interesting experience where you know I was learning about Visa during the day and going down the rabbit hole and just trying to understand Visa as a company and Visa's history, you know, I stumbled upon you know D. Hawk. You know, I read his book, you know, One for Many, uh, and I was just fascinated that it's this one of the most interesting corporate histories of any you know company out there. Uh and then I was learning about payments. And then at night, I mean, I was living in San Francisco at the time, and it just sort of happened, started to go down the crypto rabbit hole and had friends that you know were spending time you know trading altcoins. And and so I started going to some crypto meetups. And so when you had this experience, this is like 2017, 2018, when you're like learning payments by the day and learning crypto at night, yeah, there were just these things that were like immediately apparent. And one, when I would ask people at Visa and people who knew payments about crypto, it was just weird and crazy and they didn't really know anything and they kind of dismissed it. And it was a natural thing to do. And then I would go to a crypto meetup and ask you know, people who knew everything about crypto about payments, and they'd be like, oh, everyone's gonna pay for things with Bitcoin. Uh and like, you know, what's what's the point of a card? And so it seemed so clear like the intersection was going to matter in between the two. And I was like, I'm never gonna be the world expert on everything payments, but I can know more about crypto and people who know a lot about payments. I'm never gonna be the world expert on crypto, but I can you know know more about payments of people in crypto. And so I just found a way to like, I want to be at this intersection. I said, I want to spend the next decade of my career figuring out how these two worlds come together. And it seemed like Visa was the best place to do it. And and it really started with recruiting you know other evangelists like Raj, which you know, I don't even remember when we met, maybe 2018 or something. Um, but it was very clear there were people who you talked to about crypto and they'd like listen to you and say, okay, and then they like go away and like you never hear from them again. And then there were people who like keep coming back and like want to talk about it more. And then before you knew it, it's like, okay, how do we start working on this together? Uh and so no one really you know gave us permission and like asked us. We just kind of said, this is gonna be important. Let's start working on it. Uh, and I think that's what it takes sometimes in inside large companies is you know, you have to just take it upon yourself to say, you know, this is important. And you know, I think that there's a critical role for Visa to play. I think we've got a really unique DNA and heritage and kind of early uh story with with Dhawk that applies today. Um, so it's been a ton of fun, uh, I think throughout different cycles from bear markets to to bull markets, but um, you know, being able to work with folks like Raj. And I'd say one of the things I'm most proud of is the Visa Crypto Mafia. And I think Raj, in many ways, was like, you know, the patient zero of that mafia. And I think now we've got you know at least five people who've worked related to Visa Crypto, have now started companies, you know, raised venture funding. We now have two exits. Uh, and I hope that there are many more. And like being able to build a culture where talented people come in, they learn payments, they learn crypto, and then they go on to starting their own companies, becoming executives in the space. I think that's great for Visa. I think that's great for the industry. And now you actually have people who understand payments working in stable coins, where before used to be everyone working in stablecoins and crypto had no experience of payments, so that was a big problem.
Chuk Okpalugo:Yeah, absolutely. I think you nailed it. There's this intersection between payments and crypto that I think is underappreciated. There's so many elements of uh one and that uh that is not necessarily applied to the other and and it goes so deep. I guess just for some of the audience who aren't aware of that intersection, what are the key kind of things that that uh are important and obvious in payments that most crypto people miss? I think yes, we can say compliance, but can we go into into a bit more detail about what those things are?
Cuy Sheffield:Yeah, things that are are obvious in in payments. Uh I I think starting from like the the visa lens um merchant acceptance and like ubiquity is such an important thing. Uh and it's not a technology piece, it's it's a network piece. And so for many years, uh yeah, I've had you know people in crypto talk about uh, okay, like here's a new blockchain and it does you know as many transactions as Visa or more transactions than Visa. And like, and I think people in crypto tend to approach it from like a technology angle and say, okay, if we can only have a you know faster technology than Visa, we're gonna beat Visa. And you know, they don't have an appreciation for this like ecosystem that you have to build and the network effect of you know, how do you get 150 million merchants across the world to accept a payment method? Uh, and it's not even just you know, the merchants is okay, how do you get you know, payment service providers, how do you get acquirers, how do you get gateways? Like, you know, there's this whole ecosystem of many companies that have all aligned around a set of standards and a set of technologies that like they work and they work very well, but it's not purely everyone is aligned on them because they are just the best technology. They've aligned on them because that's what the entire ecosystem has been using. Uh, and so I think that's one thing that's missing. I think uh governance in business models is another piece. Like, how do you enable business models for companies in the ecosystem to grow and scale and succeed? And so I think about it from like a stablecoin wallet perspective. You know, if you're a a a stablecoin wallet provider today and a consumer you know pays directly in a stablecoin at a merchant, funds are actually leaving your platform. And today you don't make any money on that. Like that is actually net negative. Like you actually wouldn't want someone you know to spend at a merchant. You have no upside there, versus you know the concept of interchange and the ability that if you invest in building a great product that enables a consumer to spend at a merchant that drives a sale, that you're now incentivized, that you have a business model that you can build and monetize those transactions, like that's a huge deal. Uh and so I think technology is important and it always will be, but you know, network effects, you know, ubiquity of acceptance, governance, economics, business models, like all of those things are just as important if not more. Uh and I think those things are a lot harder to switch and get everyone over overnight. And I think that's why like I think the industry has converged in a way that makes a lot of sense to us, is that you know, how do you bring these two worlds together? And I think stablecoin link cards are the example of that. You know, you have the ability to build any new type of stablecoin native neobank and wallet all over the world that takes all of these benefits of building on chain that's faster, that's you know, more cost-effective infrastructure. But that doesn't mean that you can't use that product to spend at every merchant that accepts Visa and not requiring every merchant and PSP and gateway and acquirer to you know converge on a new set of standards, figure out how to solve problems that have already been solved and fraud and chargebacks and risk, and just being able to have that work on day one. Like I think that's just a critical piece of the industry. And so it's exciting to see you know, we had crypto linked cards for a while. It's kind of a novelty of like spend your Bitcoin or like get Bitcoin rewards. Now stable coin linked cards are just becoming a massive category. And if you think about how like fintech cards uh led to like a whole new wave of neo banks, you know, who have become some of the largest, fastest growing companies in the world, both both on the enablement side. And if you think about companies like Marquetta and modern like issuer processing, uh, now there's a whole new generation of companies built on stablecoin link cards, and whether it's bridge and rain and you know, many of these platforms that are growing and doing phenomenally well, like every time you have a platform shift, being able to have companies built on top of you that can grow and succeed and still leverage the acceptance of the business model. I think I think that's one of the things that's been really exciting to see play out.
Raj Parekh:Yeah, there's a lot to unpack there. I mean, maybe first off, we can talk about like interchange briefly for a second as well, because I don't think this is like a concept that's fully appreciated. But maybe if you don't mind, Cuy, just like breaking down like interchange in like simple terms, but also like where, like I guess, what is the opportunity to build new networks, potentially like replicating some of interchange? Or, you know, like how how should folks in in the stablecoin space think about new business models specifically here so you can drive incentives correctly? Like we obviously know tokens are a big part of uh of the crypto landscape today, but maybe like there's another way of approaching it too. But curious to get your feedback on that.
Cuy Sheffield:Yeah, I I think interchange has has been an incredible business model that has aligned incentives in the broader payments ecosystem you know for a long time. Uh and the way I look at it is that at the end of the day, if you're a merchant, you know, your goal is to sell a product, whatever you're selling. And you should want the least amount of friction possible to enable a consumer to show up and have as low like mental transaction costs where if they see the product, they like it, they just want to buy it. Yeah. And I think the question is, okay, well, how do you incentivize a ecosystem of consumer-facing products, whether it's a wallet, whether it's a bank, to create a really, really good experience that a consumer can trust that they're willing to use any merchant to purchase a product? And if there's no incentive for the wallet, or there's no incentive for a bank, you know, why would they invest in creating reward programs and schemes? Why would they invest in the potential fraud chargeback risks that can happen in a payment? And so being able to have this this concept and for everyone out there, Visa doesn't make interchange. You know, it's not revenue that goes to Visa, it's Visa has created this mechanism by which when a consumer spends on a card, you know, there's a cost to a merchant for acceptance. And the vast majority of that is it's going back to the issuer. And so it becomes a business model that when consumers spend, you know, the issuer can actually monetize that. And then many times a lot of the interchange actually goes back to the end consumer in rewards. And so I think that you have to think about like all the elements of how do you create value in a transaction and value on both sides rather than just the cost of acceptance. And so anytime someone says, oh, well, stable coins are cheaper and so they're gonna win, like sure, a merchant can choose to accept the stable coin, but you know, there are a lot of things that they have to think about of, okay, well, which stablecoin, which blockchain, what happens if the blockchain goes down? How do I manage refunds and you know chargebacks? You know, what if it's fraud? Has the end consumer been KYC'd? How do I convert that stablecoin into fiat where like I want to operate in fiat? How do I create a great consumer experience that just works? Uh, that someone doesn't have to go through like a complicated set of actions. So there are still challenges on the merchant side. And then there's for a consumer, what incentive do I have? Like, why would I switch from where I pay today? And like I think Visa, we know better than anyone how hard it is to change consumer behavior. And even just going from like dip to tap, uh, which has like come a long way. I mean, Raj, when you were at Visa, it was like still in the US, like we were behind on tap, you know, the rest of the world was tapping to pay, and you know, we were still like it's already like to think about going from dip to tap versus going from tap to connect your wallet, you know, click three buttons, like pay gap. Like it's it's fundamentally like a longer experience at the point of sale. Uh, it's a scarier experience as a consumer. I still get nervous when I you know connect my wallet and I'm like, okay, am I gonna sign a transaction here? Like, is this actually the merchant? Are they gonna drain my NFTs? Uh so there are all these things that the payments ecosystem is complex. You have to have value on both the consumer side and on the merchant side. You have to have a business model to incentivize people to develop you know great products and manage some of the risks. Um, so you know to your question, like can you build an interchange equivalent on crypto rails? Like, yeah, maybe. Uh I I don't I don't think we've like seen anything there uh yet. I I think that there'll be you know a number of uh attempts you know to do that. Uh but they're when you have an ecosystem that works really well, you kind of have to ask, like, what problem are you solving? And in consumer to merchant payments in developed markets like the US, like Apple Pay works really, really well. And so how are you gonna convince a consumer to switch from using Apple Pay? That that's kind of like the first question that you have to ask. Uh, I think it's it's a little bit different if you talk about you know emerging markets, if you talk about places where you know cards don't have penetration, like you know, then you could argue like maybe there are more opportunities there. Uh but I look at it as like that's an opportunity for us to put uh a card in every stablecoin wallet. Uh and so like you know, we're gonna try and participate in in those flows as as well. And uh it's just it's it's such a complex ecosystem. It's hard to change consumer behavior. All these things take a really long time, and it's a lot more than just technology and white papers. And like, you know, I think that's the reality for most people.
Chuk Okpalugo:Yeah, that is that's the microphone. It's it's a lot more than technology, white papers, uh faster, cheaper. Even the various features that the new payment chains are implementing, I think they're all necessary but not sufficient. Yes. You need uh guaranteed uh kind of channels and capacity, uh guaranteed low fees, uh deterministic finality, but then you still need the network and incentives. And so I think uh uh people either don't know or underestimate the power of interchange or some other mechanism to uh aggregate, in aggregate, define uh drive user behavior in its multiplayer payment network world. Um and so I I kind of always have to split my eyes a bit in uh when people talk about merchant acceptance as the stablecoin use case uh of of choice, or the one that is going to be it's it's the one that ends up getting a lot of attention. Um but I think we can use this as a segue to kind of discuss what other stablecoin use cases that are you're seen as real, uh seeing you're seeing as having the most traction. I think you mentioned emerging markets and cross-border payments. Um but uh there's a long list of uh use cases that I've talked about, uh, but there's a shorter list of use cases where there's real traction. And given your vantage point of visa, I think you guys have a very good uh perspective of where the volume actually is, in what use cases, is it high risk, is it emerging markets, is it uh regulatory arbitrage, uh is it um get getting around uh capital controls? Where is the the real traction coming from? Maybe we can go through use case by use case.
Cuy Sheffield:Yeah, I I think after crypto trading in in capital markets, you know to us it's it's pretty clear that the number one use case today is dollar access. And that that is a a real use case. Like a a dollar store of value is an incredible product in many parts of the world. Uh and so I think we've seen that that has driven like a reason for people to adopt more than anything else in including payments and and particularly on on the consumer side, um, just being able to store value in dollars for the first time in a lower cost, you know, more accessible way, and to have a ton of competition of different end products that can enable dollar access. Uh and I think that that's it's a really interesting thing to think about from like a developer, like a fintech developer standpoint. Uh and so we've always talked about like if you wanted to build a product that looks and feels like Venmo, uh, that can do you know a dollar uh balance plus you know P2P payments, what would that have looked like to build 10 years ago, five years ago, you know, today, what will it look like five years from now? Uh and I think that the the barrier to entry is just getting lower and lower. You know, the cost of being able to create a self-custodial wallet, like using Weld as a service infrastructure that you can bet into an app with you know great on and off ramps on a fast chain where you can sponsor guys, like that, that experience is becoming more accessible, both for like brand new fintechs that are looking to offer like the dollar apps of the world, which I think you know, those have been phenomenal success stories, and very large uh traditional fintechs or remittance companies and global big techs, you know, who might have had products that have been you know very successful in one market, now being able to use that to scale globally and to just offer a global dollar account. Like I think that is a killer 10x product that is better than what exists in most markets across the world. If you want to hold a thousand dollars, what's the fastest, cheapest, easiest way to do that? And I would argue it's through a stablecoin wallet. And you're gonna have many different options of which stable coin wallet and like who offers it to you. But I think that that is very clearly has product market fit. Uh, and I think that that is going to grow significantly. I know Tether, yeah, they say they've got about 500 million uh end customers who are holding USDT you know balances. So you know, if you say give or take, you know, there's there's somewhere between 500 and maybe uh 600 million uh customers, I would I would be surprised if that's not you know over a billion customers in the next you know two to three years now have access to dollars someplace in the world. Now, I think that there are major geopolitical questions about that. Right. And I don't think we've even started to see how governments and regulators respond. Uh, because I think as you get to that tipping point, and if you see you know the demand and growth of dollar access in these markets start to actually impact local fiat currencies, like what are regulators gonna do? Are they gonna try and crack down on it? Uh are they gonna, you know, which is kind of hard to do because it runs on decentralized rails. And so how do you, you know, do you go door to door and confiscate people's private keys? Or you know, do you enable it to be integrated into the financial system and let banks offer stablecoin dollar accounts but still have capital controls and still have you know KYC? Um so there are big questions around how it plays out, but it's it's really hard to like put yourself in like it's 2030. And like, will someone in pick a market on the world that has an internet connection, you know, probably Starlink by then uh and a mobile phone be able to access and hold dollars if they'd like to? I think the answer is probably yes. Uh, and so I think like that alone is just like a major use case. And I think that one is very complimentary of our network today to say like, yeah, store of value is transforming. How can we still have new store of values fit into existing medium of exchange in adding you know stable coin link cards to those balances? So I think that is you know number one. Then I think a lot of the other use cases when I think about cross-border payments, whether it's you know B2C, you know, P2P, yeah, B2B, one way that that I like to think about is that there's uh some value in a stable coin uh being used for the cross-border flow, uh, but doing a conversion into fiat either on one side or on both sides. It's clear there's some value there, there's some growing traction, there are a bunch of innovative companies you know they're building there. Uh but I think it's most interesting of this flywheel of as there are more consumers and businesses that are holding stablecoin balances, then I think P2P, you know, B2C, B2B, if it can be entirely on-chain where it's one stablecoin wallet to another, uh, that's going to be much bigger and more powerful. And I think that that's still several years away. Like I think most of the stablecoin to stablecoin cross-border is still very crypto native of someone who has a Binance account, you know, sending funds to someone who has like another exchange account. Um, but I I think we'll get to a point where there is a very large market of cross-border flows that as store of value becomes more ingrained, then you'll see P2P between all those wallets that are interoperable. You'll see B2C, you'll see B2B. Um but I think there's an interesting business in the intermediate period of like, you know, how can you get really good at having fiat on one side, uh, converting, initiating stable coin payouts? How can you receive a stable coin and convert to fiat? Um, two years ago that was awful. Like it's just like it was so hard to do. You were like working through crypto exchanges, there was like no liquidity. I think it's better now. I think it will be better two years from now. Like, but the the it'll still take time for that.
Raj Parekh:Yeah. Yeah, it's it's it's fascinating because I mean, one like one mental like shift that I'm trying to make for myself is like when Cuy when you know, when you started the Visa Crypto team, you're thinking about stable coin circulating supply in like the hundreds of millions. I think it was creeping towards a billion at that point. Now we're at you know multiple hundreds of billions. And now you're like, you know, the way you're describing it, you almost have to reshape your thinking to think in trillions now, which is like a really hard shift for a lot of folks to make. But that's kind of the paradigm shift that's happened over the last five years. And to your point, if we're at a you know, almost you know, 300 billion in circulating supply, a trillion dollar like asset class isn't too far away at this point. It's actually not unreasonable to think that way, but it's a really hard shift for like most folks to make. Um, and um, you know, I think one of the things that you touched on is, you know, we haven't even touched on like the you know how banks or or regulators are thinking about this, but you know, but your vantage point of being at Visa, like you you talk to banks all the time, you you you kind of see this this view. Like, how how do you see like the broader financial institutions and in the ecosystem around Visa kind of reacting to this shift? Are they are they like recognizing that this is kind of creeping towards a trillion dollar asset class, or are they still just trying to figure out like what's you know how to how to interact with it?
Cuy Sheffield:Yeah, it's a great question. I think it depends on the type of bank and depends on the the market that they're in. Uh I think first, like I love talking to banks about stable coins. I I think it's it's very interesting. Um, I think you you learn a ton, it kind of grounds you know in in reality. I think many of them are in a challenging spot, uh particularly banks in the US, that like they haven't had the luxury of being able to spend years in in like a natural progression of you know how they can build and partner and like get into this space. Like they're going through like what we like to think about as like a whiplash where you know they kind of like many of them had teams in 2021, and then you know they weren't really able to do much, the regulatory environment. Like you couldn't even think about you know interacting with a stablecoin on a public blockchain uh you know, even a year ago, year and a half ago, like you just couldn't do anything. And so they they weren't spending time on it. They had you know reallocated those resources elsewhere, and then now all of a sudden you have a bill pass, you had the first you know payments bill in like over a decade, it's like a really big deal. And so like you have to get into the space, and so then you're kind of scrambling around, okay, what does this mean? What do we do? I think it's weird for US banks where like it's a US dollar stablecoin, you have you have regulatory clarity in the US, but most of the use cases right now are outside the US. And so if you're like very domestic focused, like you feel like you kind of need to do something, but then your customers aren't really asking for it because like they don't really need stable coins when they have you know dollar accounts you know today. Uh so I I think it's a challenging environment. We're spending a lot of time trying to help banks get up to speed. I think banks in emerging markets are seeing more of the you know direct competitive pressure of you know all of these fintechs uh and stablecoin neo banks are like right in their backyard. Um, and like if they do nothing, you know, will you know whether it's existing customers move over or whether it's you know, there's a whole new generation of customers that might not have a traditional bank account in the local market. They might use some global stablecoin neo bank. Um, but the challenge for them is there isn't regulatory clarity uh in many emerging markets across the world. And so they're trying to figure out like there's real competition. You have this somewhat uneven playing field where there are companies in San Francisco that can roll out like a global self-custodial wallet, you know, that's offering dollar access, but then the local bank can't offer dollar access. Uh and so you know, there's both a what technology and infrastructure do they need? And we spent a lot of time with them on that of just how do you think about what a modern stablecoin stack should look like? You know, what are the which blockchains you know do you think about using? Do you pick one? Do you use multiple chains? You know, how do you think about wallets and and private key management? Um, you know, how do you think about which stable coins? Do you create your own stablecoin? You know, how do you manage local fiat liquidity conversion? So we're trying to help banks be able to understand the full stack of infrastructure that they need, and then how they can you know start to get into the space, whether it's partnering uh with local players or kind of advocating with regulators that like if I think Chris Brummer says this this really well of the United States is like updating the plumbing behind our financial and payment system, like the like lowest layer plumbing. Like that's what like stable coins are. And if you're outside the world, outside the US, the rest of The world, you have to be compatible with dollars today. Every economy still has financial institutions that interact with dollars. Do you want to be compatible with this upgraded form of plumbing that the US is now doing? And I think that there's an opportunity, you know, if you can enable your financial system to be better plugged into that plumbing, having faster, easier access to dollars, easier access to capital markets, or if you're disconnected from that plumbing, you might fall further behind. So I think it takes like banks and regulators in these markets to recognize that this isn't going to go away, to give the flexibility for stablecoins to come into the regulated financial system, you know, to have banks have partners like Visa that can help give them the right infrastructure, and then have them have the opportunity to compete because consumers are voting with their wallets and they're going towards this new class of neo banks and wallets and fintechs that are emerging all over the world. And so we think it's it's important to have a competitive ecosystem where it's not just self-custodial crypto companies that are able to offer stablecoin products. It should be local banks that can offer stablecoin products. And so we'd like to see that world. And I think that we'll get there. It just takes you know one, two, three years. It's it's not something that that happens overnight. And you know, the Genius Act was passed, what, three months ago, four months ago? Like, you know, even six months ago, like, you know, it was a question of like, are we gonna get like actual legislation here? And so, you know, the rules haven't even been written like for what the genius act you know is is is how this is gonna be interpreted. And so I think that has to go into place, and then other regulars have to so it'll it'll take years. Um, but I I think in 2030, most financial institutions should have some integration into this new form of plumbing. And like what that looks like, you know, how much they build, how much they partner, like you know, we'll we'll see. But on a five-year basis, I think you kind of have to.
Chuk Okpalugo:Yeah. And does that mean that there's a dependency on the kind of regulatory progress in each of these markets? And we mentioned dollar access as being a key use case, cross-border being another use case that's growing. Um but it feels like banks or regulated financial institutions are almost hamstrung in the same way that the US banks were, because they're reliant on the pace of progress of local market regulation. Meanwhile, the fintechs can continue to evolve and adapt. Uh and so with that in mind, who do you think is best positioned to take advantage of these new financial rails?
Cuy Sheffield:Yeah, I I think that's the challenge. And I think what we're seeing just empirically is fintechs are growing rapidly and building really big global businesses. And they're not waiting for the regulatory environment to be clarified in every market. Uh, many of them are just rolling out you know self-custodial wallets and saying, hey, like you know, the consumers you know managing the keys. And yeah, then there are it's interesting to see the market of like local crypto exchanges that are now becoming these FX platforms where it used to be selling Bitcoin for local currency and now it's just you know doing FX between uh a local currency and and a stable coin. Um so I think that those players are gonna get you know bigger and bigger. Uh, and then we'll see, you know, do some of them you know become you know regulated as financial institutions in in these markets and you know overseen by you know the central banks, or you know, do they you know end up you know merging with or you know do this competition between can banks be able to get the crypto infrastructure that they need, or do the crypto players end up being able to get into the regulated financial institutions and be able to operate like banks? Um so I think we'll see you know some of some of both. Um but it's I I think that it is this really interesting environment where banks every year that goes by that you give fintech a head start, it's gonna be harder for banks to catch up. And and I also think about this to some extent with like local currency stable coins, that you know, if I was a central banker or regulator, I think that's one of the top priorities that that you should focus on in your market. Yeah, if you believe that this is a new format of money and this is new plumbing uh of financial rails, then just the question is like, do you want your currency to be represented in that plumbing? Uh and now I think that the use cases will be very different. I don't think you'll have people outside of a country just randomly holding local currency stablecoin, but for the customers in your country, do you want them to even have the option to hold your local currency? And then you want to have more efficient, better functioning FX markets in your local currency with more transparency between the local currency uh and an existing stablecoin. Um so I think that I hope that over time banks along with their regulators in many markets will be pushing to say, let's adopt this infrastructure, let's participate in the space, rather than you know, enable this class of fintechs to become these global players where all the value that they're creating is actually going to someone in San Francisco and is not necessarily going to a company in the local company.
Chuk Okpalugo:That's right. The non-custodial aspect of the technology means that it's even more of a competitive threat of non-local or call it global fintechs entering the market and starting to offer very strong services to your users. And so it's an interesting, I guess, almost constitutive point where it's actually in the best interests of the regulated financial institutions to push the regulators to for clarity uh and regulation so that they can start interacting and start maintaining share and innovating in this market. Um so we just had a great uh conversation about various different use cases today, global dollar access and cross-border payments, and and how we're still in this very early phase, despite all the headlines, uh we're in this early phase of this uh quite kind of pre-regulatory clarity on a global level, let alone global uh regulatory unification, where all the regulators kind of align with each other. So several, several years away. But in terms of the use cases that we discussed, cross-border uh and global dollar access, I think one common refrain that I hear, which uh I find sometimes a bit funny, is okay, I get stablecoins now, but what other use cases are there outside of remittance or outside of cross-border? Notwithstanding that cross-border payments is like a huge, huge $200 trillion of value market a year, um, that's often the question. It's like, okay, what's next after cross-border? And uh, you know, Visa uh and it's also recently put out a payment, a paper on on-chain lending. And at the beginning of this conversation, he talks about capital markets. Um what uh maybe we could talk a bit more about credit uh and and lending and those other aspects that aren't necessarily cross-border related.
Cuy Sheffield:I am fascinated by on-chain credit, on-chain lending. And you know, first, you know, for the crypto folks, like everyone's been saying DeFi. Uh DeFi is a you know commonly uh accepted term and and everyone understands what that is. I think DeFi is a terrible term. And when you talk to any financial institution or regulator, like decentralized finance does not resonate. And so please join us in the rebrand of like putting a suit on DeFi and turning it into on-chain credit and on-chain lending. So we're we're we're trying to fight that.
Chuk Okpalugo:And it's also kind of got defiance in the name as well. It's like DeFi? Like, wait a second.
Cuy Sheffield:It it doesn't work. Believe me, I've tried. It doesn't work. It doesn't work. So like DeFi is is is not the term for you know the next wave of this. I think if you just look at stable coins from first principles, like what are the interesting properties that they have? And I think you know one is the ability to be transferred you know 24/7 globally. And I think that's the one that you know most people now understand, and that's what's driving a lot of the interest in cross-border. And I think that that's a very valuable, you know, important property, and that's unique from you know most payment systems that exist, of like being able to actually transfer the value 24-7 globally. But that's not the only property that they have. I think the second property of the ability to use them in smart contracts and program different conditions by which you know when they are sent. That to me is such a big deal that we've like barely scratched the surface on all the implications and and applications of what can you do with that. Uh and so I like to think about like the very simple way to look at a smart contract is just it's a conditional payment. And we've had conditional payments you know forever. You have a recurring subscription, it's you know, every 30 days it you know automatically is charged, but it's been relatively simple logic. Yeah, being able to write software with any arbitrary condition that then you know triggers a payment, you know, is a really, really, really big deal. And then you say, okay, well, like what are the examples, like what are the very tangible ways of like what is the use case for programmable money in smart contracts? And I think what we've seen is like what's being proven out is lending and being able to represent a loan agreement and specifically today an asset backed you know lending agreement. And that's what DeFi you know has done. And so, you know, I the genesis of this paper was I was asking the the team uh just this what I thought was a simple question. I was like, how many loans have been denominated in stablecoins and dispersed through smart contracts on-chain? Just like what what's like how how big is this? Turns out that's actually pretty hard questions, and so shout out to Alium and you know, like we were working with multiple data providers and and uh Noah for my team spending like a month on this, and then you're like, okay, well, there are a bunch of blockchains, there are a bunch of DeFi protocols on these blockchains, and you have to like parse the smart contracts, and there are a bunch of different stable coins, and like how do you actually like you know figure out what that number is? And we finally got there, and the number is six hundred and seventy billion dollars. We're like, whoa! Like there's been like you know six hundred and seventy billion dollars of loans dispersed in stable coins through smart contracts on-chain in real time. Like that is a pretty important proof of concept that this stuff works. Now, then you can look at it and say, all right, well, you know, it's yeah, mostly crypto assets is collateral, and then it's being used for speculation. Like there are plenty of like caveats to it, but the point is the tech works. And so I think that there's you know one world where like one of the areas I have more and more conviction is I think that asset back lending is gonna be an enormous market, and I think it's gonna be much bigger than most people realize. I think it's a product that has existed forever, both for consumers and institutions, uh, but it has had you know a number of costs and barriers and and challenges to be able to have anyone be able to get a loan against whatever asset that they have. Uh and I think DeFi has demonstrated that it's pretty easy in a smart contract to deposit collateral and be able to get a loan against it. Um and so I think as crypto asset markets grow, like I think you'll see more Bitcoin and crypto back lending. Um, I think there's you know potential for things like tokenized gold backed lending. You know, I think you'll see tokenized equity backed lending. I think you'll see tokenized receivable back lending. I think you'll see all these other types of assets that get tokenized that can then work within smart contracts, that stable coins become the mechanism by which those those loans are dispersed. And then I think you could see some of the same protocols and infrastructure be adapted to support unsecured or uncollateralized lending, if you have you know systems of on-chain identity and you can pass credit scores through. So I think I think there are a lot of things that need to be built and it's very early. But I think there's potential that we could wake up in five years and say, you know what, stablecoins actually had a bigger impact in how global credit operates than just how cross-border payments operates. And and I think you know, if you're a bank uh and if you're you know in the US, if the only use case is remittances, you're like, okay, well, like, yeah, with like that'd be nice to have a little bit better remittance product, but like that's that's not like the top three priorities of the bank. If you say that this is better, more cost-effective, you know, programmable, automated infrastructure for lending, you know, that's gonna create these global credit markets that's gonna reshape how lending works and unbundle it from payments. You're like, whoa, like what what does that mean? Like I'm I'm in the business of lending. I I should probably figure that out. Uh, and so I think that that resonates a lot in terms of the potential promise of smart contracts in stablecoins being dispersed. Uh, and I think that there are a lot of you know barriers and challenges and things that need to be addressed. I don't think you're gonna have entirely permissionless lending pools. Like if you don't know who's you're lending or borrowing from, that's that's not gonna work. Uh, I don't think that it's acceptable to have a smart contract hack and all the money is gone. And just like, you know, those things aren't gonna work. But I'm always really interested in seeing like what can we learn from the crypto ecosystem and have the crypto ecosystem kind of prove out what the technology can do, and then how can that be adapted to use cases uh that you know can actually be compatible uh with banks and and fintechs and the broader payments ecosystem. And so we're really excited to figure out like how can Visa help accelerate the space? Um, you know, how can we provide on and off ramps? If you think about if you get a loan dispersed to stable coin, how useful is that if you can't spend it? And so being able to have that as a credit line on a card that you can go and spend, you know, I think that adds significant utility. Um and then I think like if we want to grow credit card products, and and I think credit cards are an amazing payments of financial product uh that haven't been able to be issued in many parts of the world because you haven't had access to credit scoring and you know, you haven't had capital to lend there. Like, I want to figure out how we can use the capabilities of smart contracts and stable coins to really create better credit infrastructure that can lead to more payment products, you know, spending on credit out there. So I think it's it's one of the most fascinating and interesting spaces that uh is not as well understood and you know, there's not as much attention on it as as there should be, you know, versus I think the cross-border stuff is fairly obvious and like you know is important, uh, but it's not the only way that stable coins will matter.
Raj Parekh:Yeah, and it's it's really interesting because you know, I always joke with people, but the DeFi has actually been battle tested. Um, it's not it's not like this new immature technology. And obviously, like you still see you know some things happen where that's hacks or exploits or whatever that might take place, but you see some of the you know blue chip apps that we have in the ecosystem, like an Ave or Morpho, these have been battle tested for for many years now. And so to your point around you know the number of like 670 billion in loans, like you know, to us in crypto, that's like wow, like that's it's really big. But I think it's also just like a message of like how much um like you know, I think battle scars that the entire ecosystem has. And I guess to your, I mean, I guess one question for you, Cuy, just to build on this a little bit more. But you know, we uh like I mentioned earlier, like we, you know, as an ecosystem, we need to shift into like thinking in in trillions in terms of um, you know, I think scale and volume and growth. Um like you mentioned you touched on a few different parts um uh you know briefly, but maybe you can expand on that a bit more of what's missing for DeFi or on-chain credit or on-chain lending if we want to rebrand this right now, um, to becoming like a multi-trillion dollar asset class.
Cuy Sheffield:The starting point that's probably the the biggest area is like how do you add trust and permissioning on on top of it? Um and I think crypto folks are are very comfortable with you know going and depositing into a protocol and like not knowing you know who's there. If you talk to any bank or or financial institution, I just don't think that that structure is going to work. Um so I think that's a a big open area. We're seeing a lot of innovation uh around different RWA focused lending protocols. Um so it's kind of like I think about this in layers of you know, there's a blockchain at the base layer, you know, there is a protocol that you know can enable different types of lending contracts, uh, which today is very permissionless. I think you're gonna need new layers built on top of that that can add permissioning, uh, that could add you know more ability to customize the different types of lending markets uh that financial institutions want to participate in. Uh and then I think there's just like a huge lack of understanding of how do smart contracts work, what are the risks, what can go wrong, you know, and how do you manage that? You know, if you think about, okay, well, what happens if a blockchain goes down uh or you know is overwhelmed and gas fees spike, uh, and then the price of collateral goes down and you can't liquidate that collateral? Like, what do you do there? What happens, what are you gonna use for the Oracle? And like, how do you get comfortable that the price of what that asset is supposed to be uh is there? Like, how do you deal with you know if there is a hack, you know, being able to freeze the funds or or managing you know that? So I I think it's gonna take years to figure out how to adapt these things. But I think that the the upside is is enormous. And I I love this idea of like people talk a lot about cross-border payments. They don't talk a lot about cross-border lending. I think cross-border lending is more complicated. You know, you have you have local regulations around lending has very much been a kind of domestic you know market and use case. But if you just look at like what's happening in DeFi, you know, you have an investor, whether it's retail or institutional, depositing into a protocol in the US that might be technically lending to someone who's in Brazil. And because the fact that you can disperse a loan in real time, I think you can have this like global credit network and global ecosystem of lending that can exist that if you had to send a wire transfer uh and it took you know four days for the funds to get there, you couldn't really do this like just in time you know cross-border lending. Um I'm really excited to just figure out like what is this gonna look like? What role can we play to help you know accelerate it? Uh and it's kind of like just the the nature of stable coins. And when I think about in the Visa context, they're just these like general purpose instruments that can be used for so many different things. And the my favorite D. Hawk quote that that I've I say to the team all the time is like D Hawk always said, Visa's total adjustable market, you know, it's not credit cards, it's all value exchange on Earth. Uh, and so I think he was a little limiting. I don't know why we can't do value exchange in other planets as well in the future on some time frame. Uh, but it's like, what are all the types of digital electronic value exchange that's gonna happen? Uh, and it's not just consumer to merchant, it's not just CMB2B, it's a complicated loan agreement that's executing on-chain where stablecoin is dispersed based upon a tokenized receivable and like certain functions are better. Like that's value exchange. And I think that the velocity of money is gonna increase. The types of value exchange are become way more diverse, but they're going to need trust, they're gonna need on and off ramps, they're gonna need control, they're gonna need these things to go from just like the crypto ecosystem into mainstream payments. And so I think there's just a massive opportunity for us to figure out how to accelerate that.
Chuk Okpalugo:You mentioned a a range of different things that are all the kind of necessary ingredients there. Yeah, kind of liquid on-off ramps globally, so that if there's a global protocol, global lending protocol that works on some USD-based stablecoin, you can always get in and out of it in an easy way. Then um shared understanding of kind of the rules of the road, if maybe that be governance, or maybe that is just a shared understanding of a battle tested smart contract for how it works and the liquidation process and the waterfall. Uh there's all these different sets of things that you can conceive as that they will happen but over some period of time. And so this feels like the next three to five, maybe 10 you know, journeys towards a 10-year thing. But with that in mind, uh we are talking about trillions. I think this this is to be uh this is where it becomes very important for folks who are in that market, banks, uh private credit uh institutions, to be thinking ahead so that they can keep an eye on it, but not necessarily that like this is going to happen overnight. So there's they need to kind of be both keep one eye, one foot in the door, but um but just be building, preparing and investing for the future.
Cuy Sheffield:I guess for sure. I I think you have to take it one step at a time. It's like step one, yeah, how can you come on chain for the first time and send and receive value? And that's something all the way back, yeah, when Raj and I, you know, were we starting this at Visa, like the analogy I use it all the time is if at some point, and I I have no idea when, but like I wish I could figure it out, Visa decided to get a corporate internet connection and to give employees email. Because we actually existed as a company before email and before like at the end, which which is an amazing thing about just the heritage. But I would argue that the earlier that any company decided, you know what, let's try this internet thing out, you know, let's let's get the the connection set up, let's give people emails. You start to understand what the internet's gonna look like and what it's gonna be, and how do you adapt you know your products and build you know for you know where the world is going? And and Visa was you know incredibly successful before the internet. And the internet, you know, we played a major role in unlocking e-commerce and building massive businesses and growth in the volume of what's happening today. And so I look at stable coins and blockchains a similar way. Instead of going online, it's like going on-chain. Like, how do you get your first corporate blockchain connection? You know, how do you get your first wallet? How do you send the first funds on chain, receive the first funds on chain? And the earlier that you do that, no matter how small it is, the better you understand what it takes to interact with that ecosystem and how it works, and the better position that you're gonna be for the future. And so, like, you're not gonna go straight from I've never set up a wallet to now I'm like, you know, interacting with a lending protocol. Like it's just that you're gonna like, can I set up a wallet and can I send value from A to B? And can I do that securely? Uh, and can I do that you know in a way that actually fits with my business processes, my risk tolerance, and like you know, my accounting and reconciliation? Like, so I think you just have to start with what is the easiest, lowest hanging way that you can go on chain just for the purpose of being able to understand what it means to interact with the blockchain. And then you could start building these layers on top of once you're on chain, then what can you do on chain? Uh, once you have that internet connection and you have emails, then maybe you set up a website. Yeah, you have a corporate website. Once you have a website, you know, then maybe you have an application uh and a web app and where you could do things uh with it. Uh, then you start building products for other people who are building websites. And so I think it's it's the same thing. And I think there's gonna be this progression over time where you go from like the entire business and everything you've ever done is off-chain to you come on chain from like a payment standpoint, then you come on chain from like an application standpoint, and then I think at some point in the future you actually start generating revenue on-chain. Uh, and I think you're gonna have entirely new businesses. And this idea of on-chain revenue is just like this fascinating concept of like you know, earning revenue per block. Like, how cool is that? Like, how can you build a product that actually taps into a global ecosystem that you can distribute to anyone who has a wallet where every time a block happens, like you're getting revenue. Um, so I think that that's gonna be the journey that a lot of companies you know have to have to go on. And it that's a decade you know plus journey, but I think it's just taking it you know one step at a time.
Raj Parekh:Yeah, one of my some of my favorite moments when I was built building Portal too is that when I saw a developer, like a fintech developer, actually spin up a wallet and then actually conduct that transaction in USDC, you can kind of see like their like their face light up to be like, oh, I actually I actually get this. This is like how money's being moved on these new rails when they've historically interacted with like you know banking as a service products or something else as well. So to your point, Cuy, just takes that that simple step of like how can you get on-chain quickly and then use it as like the beginning of like a wider rabbit hole. Uh one maybe like you know, one last use case that is starting to pop up a little bit more now. Um we're starting to see an uptick in you know X402, which is you know uh a you know new new genetic commerce or you know, a new payment protocol that's being built um on the internet. Um I I think of agents as like a you know a larger expansion of the human population that's now happening, and they're likely going to be large transactors this new economy. But we're we're obviously early days right now, but maybe maybe you can just describe like from your vantage point, like how do you think about interacting with you know agentic commerce or agentic payments uh from a visa lens? And you know, what what is is there any interest or demand or that that you're seeing that is you know, I think worth experimenting with?
Cuy Sheffield:I think it's a fascinating space. It's one of the most intellectually interesting things that's that's happening. Uh I don't understand it nearly well enough. Um I don't think many people you know understand it at all. So that's that's what makes it fun. Um general framework is that I I think that there's going to be an ecosystem of agentic commerce, and there are kind of two different you know routes that could take. One is a consumer has an agent that's helping them shop at merchants, whether it's booking travel or you know, buying things for your kid's birthday party. Like it could be anything. And I think their Visa's incredibly well positioned. We've been early leaning in. You know, we've got an amazing team focused on Ingenic Commerce that is basically adapting our network and our capabilities to be able to serve those flows, to you know enable a consumer to put a card on file, tokenize that card, you know, give you intent and delegate access for an agent to be able to purchase something on their behalf, and you know, having that just you know work uh with with a merchant. So I think that is a like huge opportunity from a kind of future next-gen Visa card perspective. And you know, if you want your agent to be able to buy from anywhere on the internet, then the best way to do that is is over Visa. Then I think there's gonna be a a second set of use cases that I put more in like the agent-to-agent space, uh, which is much harder to reason about like what that's gonna look like. Um and I think that's where there are like a bunch of early crypto native experiments that I put like X402 in, and I could see a a role for for stable coins to play, uh, particularly around things like like microtransactions. Um so like I'm really interested in this like agent-to-agent economy, where like if you have a world that if you give an agent a task to do, it might not be able to have all the tools and skills and the ability to do that task itself, it might need help, and you could have a whole ecosystem and marketplace of other agents that are specifically optimized around that task, uh whether they're providing a certain set of data or they could actually just do the task on behalf of the agent that you're interacting with. And if you think about, okay, well, what has to happen for an agent to pay you know a fraction of a penny to get like the best up-to-date you know weather data or to get a certain tool that you know helps something, help solve a problem in a coding environment. Uh and so I think that you know MCP servers help solve how agents can you know interact with other tools, but then you know traditionally, okay, you'd have to go and you know sign up separately with the provider of that. You have to get an API key, you have to put a payment method on file. Being able to just pay as you go, consuming some tool or resource, uh, I think is a really interesting potential use case. Uh it hasn't really happened to any degree yet. Um, I do like uh I follow the X402 scan uh dashboard on like a daily basis, and I'm always fascinated like who's in the leaderboard, uh, and just seeing one, it's mostly meme coins uh right now that like crypto of people you know minting meme coins uh via x402. But I think we've seen with Solana, we've seen with Phantom, like yeah, meme coins are like viral marketing, they drive attention and developer interest, and you know, they make money for infrastructure providers who then you know ultimately attract some real uh use cases. And so I think like my mindset is approaching this like you know, I have everything else, and just try and embed myself in the ecosystem, you know, talk to the builders, use the products, and just try and figure out how it's gonna work. And yeah, I think this is a long, long way away. Um, but I think it's a a huge opportunity. Uh, and I think again, you're gonna need trust. Like, you know, how do you know if you have who the agent is that you're selling to? And like, do you actually want to sell this this data to them? Um, you know, how do you make the on and off ramps you know much easier? Like, what is the the wallet experience? Are are we gonna have you know large agentic platforms embed wallets in? Are they gonna let you connect your own wallet? Like, I think there are so many open questions. Um, but it is it is fascinating. And like I think you just have to participate and you have to lean in and and use the the stuff and follow the data. Um and it is cool that like all the data is on chain that you can you can see what's happening uh instead of having to to guess. And so I think that's it's an exciting area to watch.
Chuk Okpalugo:Yeah, I'm excited. To see what happens. It's uh I think a good example of the building a core capability, uh a primitive, and then seeing who can invent a use case or who can find or discover a use case. And it may not happen for some time or it may require some other key primitives to exist. Kind of think about Uber, which was a combination of mobile apps, kind of gig economy, uh, you know, good enough GPS uh and then being able to pay in and add uh through uh the app store. And so, you know, all those things kind of happen in their own different phase on their own S curve, but at some point all those tools are available for a developer to say, you know what, wait, we can actually do this now, uh, even though people thought it was a bad idea and then it took off. And so I'm still curious about what the use cases will be that take that take off. I fundamentally see that there is a machine-to-machine payment use case here, um, a agentic marketplace where they can go and utilize each other's services in a way that is completely devoid of human interaction. Sounds very futuristic, but I can see it happening. Um then um I think this didn't kind of make it into the discussion of use cases, but micropayments has always been this thing that stablecoins unlock that traditional you know RTP or ACH or other use cases, other payment reels don't. Um and so micropayments plus machine to machine sounds like the right mix of constraints and requirements for something like X402 to take off. Um but you know, uh it's still not there yet. But I guess we are early. It's only been what maybe five months since they launched. And so the fact that the speculation is the use case at first is probably correct on the historical trend. And it's only gonna be a couple more months or quarters before something else takes off.
Cuy Sheffield:That's the story of stable coins. You know, speculation was the initial use case in in crypto trading. And like you know, we were always trying to make the case that it's gonna cross the chasm someday. Someday you're not just gonna use stable coins inside a crypto exchange to be able to buy another crypto asset. Uh, and I think that's happened. And so I think that you know we could definitely see that um you know more often. And like we did we want to participate in that ecosystem.
Chuk Okpalugo:That's awesome. Um, so we're just about at time here. Uh this has been awesome. And I I'm kind of I'm inspired now to go build something silly on X402 just to kind of like try it out, get understanding of how it works, and then we see where we can go from there. Um, but as we round out the show, we have a couple of quick fire questions for you. So the first one, if we project out five years from now, what does success look like for crypto and stablecoins at Visa?
Cuy Sheffield:It's a great question. Um I I think the most obvious is like stablecoin link cards will be a a massive category for us. Um yeah, I I think that there is a huge opportunity to have a whole new generation of fintechs that are born Visa, you know, built on top of our Rails and like enabling great products to consumers in many markets that like we haven't necessarily had you know card you know penetration in. So I think that that's one. Um two, you know, I think that we can move tens of billions, uh hundreds of billions of dollars you know on-chain in stable coins, you know, underneath you know Visa Net and like you know, through stablecoin settlement. I think we've said publicly, you know, we're on a 2.5 billion dollar you know run rate. Uh and so like if if you can move a billion dollars on chain and settlement, um, you can move 10 billion on chain. If you can move 10 billion, you can move more. So I I think that there's a world where like the back end of Visa Net could you know benefit and modernize significantly using stablecoins and stablecoin settlement you know as a big part of it. Uh and then I think that there's you know a big business on money movement in terms of cross-border B2B, you know, B2C, both in Visa Direct and new products that leverage stable coins. And I think there's a huge business around you know enabling banks with infrastructure to be able to participate uh and you know bring to market consumer and and merchant-facing products that use stablecoins. So I think there are kind of those those four different categories that each and themselves you know you could think about as a long-term business that we can scale. Um and so I think in five years, like would would expect that that all of those become very meaningful.
Chuk Okpalugo:That's awesome. And I guess in 10 years there'll be crypto acceptance or stablecoin acceptance on Mars to really go one step further than Deep Hug's statement.
Raj Parekh:Interplanetary payment systems.
Chuk Okpalugo:That's right. It's funny. We I had a great conversation with a friend of mine about this, actually. You know, we were let's say 10 years from now, 20 years from now, we're on Mars. What currency will they use? Right? And you say, okay, well, internet based, so probably crypto will be one way because there'll be something like interplanetary internet. So then you've got stable coins. But at some point, if they want to manage their own monetary policy and credit and you know expansion, do they create their own Martian dollar or do they stick with Bitcoin? Is it the fiat? Anyway, that's for another episode. Um that'll be an interesting one to tap into.
Cuy Sheffield:But the space episode is it's uh that is that is a great question. Like it it depends. You know, whoever's in the position of uh you know getting to bars is gonna have a significant impact in you know what the medium of exchange in the Martian economy will be. So we'll we'll have to unpack that.
Chuk Okpalugo:Trillions, more than trillions, I suppose, are by that point. So um okay, a bit a bit of a segue there. But uh as we're thinking about um fiction, hopefully non-fiction, um, what is a favorite book, movie, or TV show or the content that you'd recommend?
Cuy Sheffield:Uh so I think the D Hawk book one for many was kind of one of the most you know influential in in my career. It's not easy to read. Uh it's it's definitely uh it's it takes some some time. Uh I also recommend the the podcast that he did on the Innovation Show. There's a seven-part podcast series. If you search D Hawk Innovation Show or put it in the show notes, like that is a condensed version of the book. Um I think he recorded it when he was about 90 years old. Uh so I recommend listening on like 1.5 or or 2x, but it tells you know the story of Visa, you know, his life, as well as like his life after Visa, uh, which I think is equally fascinating uh in you know some of his ideas and and things that that he worked on. So yeah, anyone who's working in stablecoins crypto AI like should be familiar with T-Hock and and his ideas. Awesome. That's a great recommendation.
Chuk Okpalugo:We'll add that to the show notes. And then finally, who else in the space uh do you admire that we should bring on the show?
Cuy Sheffield:That's hard. There's so many people. Uh I I don't I don't want to like I don't want to pick right. You guys have had a great roster of of guests uh so far. Um and I think it's it's the perspective of people that are actually building in the day-to-day, I think is is really important and and valuable. Um one of the things we've been trying to do with tokenize is like who are the digital asset leaders that are inside of banks and like what are the what's their perspective? What are the real issues that they're having as they're trying to implement this stuff? And it I think that that's yeah, always valuable. Now the trade-off is like a lot of banks, the the comms policy, it's much harder for them to just have have open discussions. But there are some some really talented people who are working hard inside you know large institutions to try and figure out how to push them then forward. So uh maybe I'll I'll I'll I'll give you a few recommendations off offline and you know see if if they can get their their comms team to let them come on the show.
Chuk Okpalugo:Yeah, I think you mentioned it, you nailed it at the beginning. I think there's a very limited number of people globally who understand the intersection of crypto, stable coins, payments, and banking. And so uh we'll find them, we'll get them on the show, and we'll get their insights so that the rest of us can can be building uh effectively in this space. So that's great. That's a wrap. Uh thank you for uh a great conversation. And um, just as we uh we close up here, where can listeners go online uh to learn more about you, Kaya and Visa?
Cuy Sheffield:On x at kai shuffield and visa.com slash crypto.
Chuk Okpalugo:Awesome. Raj? You can find me on x at rparic and mana.xyz. Awesome. And for myself, it's stablecoinblueprint.com, LinkedIn at Chuck Arcpolugo, and x chuck underscore xyz. Thank you for listening, and thank you for joining us today, Cuy. Thanks, Cuy. This was fun. Thanks for having me. 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 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.
