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
How Stablecoins Fix Broken FX Markets w/ Chris Maurice (Yellow Card)
Presented by Stablecon; Powered by BVNK
In episode 11 of Money Code, hosts Chuk Okpalugo and Raj Parekh are joined by Chris Maurice, Founder and CEO of Yellow Card, a leading stablecoin payments company serving emerging markets.
Dollar liquidity is the choke point of emerging-market commerce, and the traditional system forces businesses into informal FX networks just to survive. Chris explains how stablecoins have replaced cash as the form factor for the dollar in Africa and other frontier markets, why the shift happened so violently fast, and what it means for banks, corporates, and fintech builders now racing to catch up.
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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So that was end of 2020, going into '21, uh, we listed USDT. Before that, everything was just Bitcoin, right? I mean, we were a hundred percent Bitcoin, people were just buying and selling Bitcoin. And when we listed USDT within four months, we went from a hundred percent Bitcoin to 99% USDT. Right. I mean, it was just a I mean, a rapid shift.
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 Okpalugo, your host and author of Stablecoin Blueprint, and I'm here with my co-host Raj Perekh, head of stablecoin payments at Monad. Today we're joined by Chris Maurice, CEO and CEO of Yellowcard, the largest stablecoin company serving emerging markets. Welcome to the show, Chris.
Chris Maurice:It's good to be here, sir. I wouldn't miss it.
Chuk Okpalugo:So today is a really interesting one. We are going to be talking about uh yellow card and the implications of building up stablecoin payments in emerging markets, in particular Africa. Uh, why is that important? Well, emerging markets are where the adoption in stablecoins is really happening. When you look at the volumes put out by reports such as Artemis and others, uh, a lot of the volume is coming from uh or interacting with emerging markets. It's the edge of innovation and it holds lessons for how stablecoins might be implemented elsewhere. Also, in respect with respect to Africa in particular, as a continent, it has incredibly favorable demographics for growth. It's the youngest and fastest growing population, and many of the world's fastest growing economies are on the continent. So adoption trends here are key to watch and are important for understanding the future. But before we dive in, just a quick note 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. All right, so let's dive in. So, Chris, when people think about stablecoin payments in Africa, I think yellow card is the brand name that that really uh is on top of people's minds. That wasn't always the case. It wasn't always stablecoin payments. What does yellow card do today? Just give people some background. And how did it get there?
Chris Maurice:Yes. Um no, so it was not always stablecoin payments. Uh I think uh, you know, as with everybody else uh in the space, you know, the journey started with Bitcoin. Um and, you know, when we started out, we were doing full B2C exchange, right? I mean, we look, we started out, we thought we wanted to be Coinbase uh before realizing that retail users kind of suck to deal with. It's like the I mean, you know, dealing with a million people uh is a lot more of a pain in the ass than dealing with, you know, a thousand companies, right? And so um, yeah, I mean, you know, we started off, I mean, full retail exchange. Uh, we were spread across about 20 countries uh and doing, I mean, just on and off wrapping, right? And I mean, we were serving, I mean, look, our average payment was like four bucks, five bucks, right? I mean, it was, I mean, we were serving, I mean, very small use cases, you know, buying and selling, things like that. Um, and I think as the as the company evolved, um one of the big moments that we had, one of the big shifts that we had was actually listing USDT. So that was end of 2020, going into 21. Uh, we listed USDT. Before that, everything was just Bitcoin, right? I mean, we were 100% Bitcoin, people were just buying and selling Bitcoin. And when we listed USDT within four months, we went from 100% Bitcoin to 99% USDT. Right. I mean, it was just a I mean, a rapid shift. And the other thing that started happening is transaction volumes got higher and people started actually transacting more. And so, you know, we started diving in on this, and and you know, the big thing we realized was, you know, this is businesses, right? These are not, these are not people buying, you know, thousands of dollars of USDT. These are businesses that are using this stable coin, right? Using this sort of dollar alternative to make payments, right? It was, I mean, you know, companies that import from China sell locally and then need, you know, dollars to keep the cycle going, right? And to keep imports flowing. And so, you know, as we, as we started uh, you know, just talking to more and more people, we realized, you know, the opportunity here really isn't with consumers, right? The opposite, the big opportunity is with businesses and helping businesses to be able to facilitate these payments. And so, yeah, I mean, you know, that's that's what we that's what we shifted focus to. I mean, you know, going back, I mean, you know, two, three years ago at this point. Um and yeah, today we are the largest licensed uh stablecoin payments infrastructure provider for emerging markets. So we're doing this across, I mean, you know, multiple parts of Africa, uh across, you know, parts of Southeast Asia, South America, Middle East, essentially anywhere in the world, my mom doesn't want me going. And uh, you know, providing this technology across the board.
Raj Parekh:That's that's awesome. I mean, uh there's like a funny, I think we had a funny conversation where you were showing me the driver's licenses across the different countries in Africa, Chris. But we should, I mean, at some point we should, we should chat about that too. But maybe, maybe describe just like the analog as well. Um, just what what do these businesses have to do today in order to like move money across the continent, especially in Africa? And you know, how is the existing like region or continent even interconnected? I mean, you have Rails like SEPA across Europe, you have, you know, other, you have Swift that's like, you know, obviously global and international. But if you can maybe describe just uh because the the I think the data that you shared around USTT growth is actually really interesting and how organic that is, but maybe folks don't really appreciate the analog and how like what the problem that actually exists as well.
Chris Maurice:Yeah. So, you know, look, the the problem varies pretty greatly depending on where you are, right? Uh and you know, to your point, like there is no SEPA for the rest of the world. Right. Uh there's no, I mean, you know, Swift is available in every country in the world in theory, but you know, Swift does not really work in every country in the world, right? Because Swift requires dollars. It requires, you know, hard currency to be able to make these payments. And certain countries just are not liquid when it comes to dollars, when it comes to uh, you know, hard currency and being able to access that. And so it really, it really depends on the country. Um, specifically for you know, for our target audience, which is, I mean, large banks, large financial institutions, large corporates. Um, you know, it's a it's an extremely difficult situation where in most of these countries, you find yourself, you know, filling out forms, begging for, you know, allocation on dollars and never getting enough to actually satisfy and grow your business. Right. I'll give you a great example. We work with, you know, one of the largest food producers uh in uh in Africa. Uh and you know, look, some people consider food essential, right? I'm not gonna opine on how dollars get divvied up. Uh, but you know, these guys, as a, as a food producer in an essential category, get less than 25% of the dollars that they need in general uh from through official channels to be able to, you know, to continue to keep their business going, right, uh, through the banking system. And so for the rest of it, they they need to go find those dollars elsewhere, right? And you know, when you look historically, a lot of that ran through informal channels, right? It ran through like hawala. I'm sure you guys are familiar with hawala for you know, anybody that's not, it's uh, you know, it's an Arabic word. It just refers to sort of money movement, right? So I know Chuck and you know, he has an uncle in the UK. So I'm giving Chuck cash, and then you know, his uncle is sorting my guy out. And, you know, look, Chuck, I'm sure your uncle's a great guy, but I don't think I need to explain why he's not the best way to move a million dollars from, you know, any country in particular to the UK. And so, you know, you had these informal systems that developed to keep the economy functioning, right? And to make sure that, you know, people and businesses could continue to access the dollars they need, make the payments that they needed. And, you know, again, that works fine until you get to, you know, again, large corporates, large banks, etc. Right. When you look at these large companies, Visa, you know, PayPal, right, uh, people like that, these guys are not going to use some guy's uncle to facilitate a million-dollar transaction, right? There's all kinds of red flags there. You don't actually know the origin of that money, right? There's no, there's no KYC. There's no, there's no way to actually trend uh, how do you say, track transactions and monitor and things like that? And, you know, that's why historically you've had so many difficulties with some of these large companies being able to operate in in South America, in Africa, and in parts of the Middle East. And that more than anything, to me, is what stablecoins are able to solve for is it it takes a system that historically had to be solved through informal channels and it formalizes it again, right? It gives you a way of actually being able to see the source of funds on-chain. You can trace, you know, where is this money coming from, where's this money going to, AML, sanctioned screening, travel rule, you know, all these things that you can't do in an informal system. And so, I mean, that, you know, that's the big unlock here, right? Is it it is formalizing, it's re-formalizing a system that became informal by design and and you know by necessity.
Chuk Okpalugo:Maybe we we can uh break that down a bit more. So many folks understand Swift, many more folks don't understand Swift. Um it's just a messaging protocol between financial institutions. But then once they we see even how they and once they process those messages, something else happens on each of their books. And you mentioned it earlier that Swift itself is fine, but the connected banks maybe have a shortage of liquidity. That led to a need for informal systems. Informal systems don't scale for businesses, yellow card scales for businesses. Maybe we could help explain why the liquidity shortage and the capital controls exist in the first place. And I know it is different in various various regions, but maybe um we can just pick a few examples to explain, hey, the existing system as it as it exists today doesn't work for these reasons, and that has led to the opportunity that stablecoins can solve.
Chris Maurice:Yeah, I mean it's you know, again, it you know, it's a it's a it's a big world out there, right? So there's uh I mean there's a number of reasons why these issues, you know, pop up in any particular country. Um and I mean this spans everything from, you know, I mean, it can be, you know, a bad crop season and not as much, you know, not as many dollars coming in from like an export standpoint to uh you know issues with corruption. It can be, I mean, you know, just issues, not even not even like, you know, nationwide corruption, right? I mean, it can just be at like at the bank level, right? Uh the dollars don't always end up in the hands that they're supposed to, right? You know, maybe you know, I if I'm managing the bank and you know, I know you, well, great, I'm gonna make sure that you get you know the allocation that you're looking for, get most of the allocation you're looking for, and you know, Raj is is screwed, right? Even though he's running a business that also needs dollars and that also needs to facilitate these imports and things like that. So it's it's it you know, it's a matter of you know, the dollars don't always end up where they need to end up, right? For for any number of reasons uh that you know uh vary country by country. And you know, what that leads to is just a lot of fragmentation in the market, right? Certain banks will have liquidity, other banks will not have any liquidity, right? You go to you know a BDC on the street and you know they might have you know a couple thousand bucks, and then the the next guy one street over doesn't have anything.
Chuk Okpalugo:And you end up And the BDC being like the equivalent of my uncle, just for folks who are listening.
Chris Maurice:Yes, exactly. Um and so uh yeah, you go to Chuck's uncle and you know, hey, maybe he has cash today, maybe he doesn't, right? And so, you know, it's one of these things, um, it's one of these things where you just end up with a very fragmented market, but that doesn't mean that there's not an economy there, right? That doesn't mean that there isn't there are no dollars, that there is no access whatsoever. It just means that you're not able to find it. And information asymmetry, more than anything, is what leads to this, right? It's and you know, I mean, in emerging markets, you know, information is king, right? And knowing where to go, knowing who to talk to, you know, knowing the right guy, that's I mean, that's you know what a lot of this comes down to. And so, you know, when you work in economies like this, it's I mean, you know, again, it just becomes extremely difficult to actually source for hard currency in an environment like that, right? You it you never know who's gonna have it, who you need to know, anything like that. You need to know, you know, 50 different guys to make sure that, you know, at any given point you're able to actually facilitate these transactions. And, you know, stablecoins are the first technology that actually cut across the economy and sort of aggregate this at a nationwide level. And so now, you know, for any country in particular, you know, pick a country, right? Bolivia, Argentina, wherever, uh, you can actually aggregate that liquidity across the board using stablecoins without all the complexities, right? Without having to have those dollars in a bank, which can be extremely expensive to move around and to manage.
Chuk Okpalugo:I think that's a really interesting way to put it. It's not often described in that way. Um it's described in many ways. You know, it's you know, getting by bypassing uh correspondent banking. That's true. It is bypassing correspondent banking, but it it that line, which while it's true, doesn't necessarily uh pick up on the point that you just made, which is it's really about information astigmatry and aggregation, or in other words, price discovery. There are people who want to put dollars into the system, the people who want to exchange out of the currency into dollars. And in the existing world, it doesn't meet each other, hence the informal economy. And uh I think that's the kind of elegant way of describing it, that stablecoins essentially have this as an open network that anybody can participate in, you over time aggregate liquidity, and therefore uh price is discovered. Um, that is i there's a conversation about liquidity to have, but at least that's the starting point in enabling uh free trade and FX.
Chris Maurice:100%. And I think I mean that is to me one of the biggest innovations that stablecoins have brought to global markets is pure price discovery on various currencies and various assets that previously you just weren't able to you weren't able to see, right? If you go on Google and you know you look up the you know the prevailing exchange rate for any given market. I mean, look, in some countries that I mean, you know, again, I mean we just I I just mentioned Bolivia, right? In a in a you know, an example like Bolivia, that that rate that you see on Google is gonna be almost 100% off from where the actual market is on the street in the country. And so, you know, again, that information that you're getting from Bloomberg, from Google, et cetera, is actually quite far off from the reality of the price. And it, you know, again, it just comes down to that information asymmetry. Well, Bloomberg doesn't have a way of aggregating what, you know, 50 of Chuck's uncles on the ground are pricing, you know, are pricing the currency at. And and so, you know, they're using just whatever the bank says, right? And the bank's not always correct, right? The bank has an agenda. The bank is out to make money, right? They're, you know, they're not, they're not always giving you the actual price. And so, I mean, being able to actually see that price uh is, I mean, I would say one of the biggest innovations. Cutting out, you know, correspondent banking and I mean, you know, enabling the money to move freely between people and things like that. That's obviously another big one. But really being able to see that price has done, I mean, a lot more for people and for some of these economies than I think people realize.
Raj Parekh:Yeah, and maybe and also just give folks maybe just like an example of the scale that a yellow card is operating at. I mean, you mentioned fragmentation a few times, but you guys are actually aggregating multiple markets across a very difficult continent. Um, and and so maybe just give folks just like I think an example of like the scale that you guys are operating at today. And then also you, you know, you mentioned this organic interest in dollars and tether, and um there's this natural price discovery, but like how do people perceive stablecoins? Like, do they care about the blockchains? Do they, are they, are they looking at FX? Like, do they, do they look at it as tether? Do they look at it as dollars? Like maybe if you can just give folks an on-the-ground like insight into like what's actually happening with your customer base too.
Chris Maurice:Yeah. So, you know, I think, I mean, uh, you know, for context, right? I mean, we've we we've processed upwards of uh, you know, $10 billion. We operate across uh about 50 currencies, mostly exotics, right? Mostly, I mean, uh, you know, currencies that don't have liquid markets, that don't have price discovery. Um and we use, you know, stablecoins to actually be able to enable that discovery, right? And to be able to understand where, you know, where prices should be and and you know, where we need to be trading. Um yeah, I mean, look, in terms of in terms of the customers that uh that we deal with, these guys more and more see stablecoins as a dollar. And I think that that, you know, that connection in people's brains is one of the things that, you know, for me has been one of the most beneficial parts of the last year. Right. I mean, you know, and I I was uh you know, I was talking with somebody about this earlier, right? When you look back over the last, you know, the last 12 months or so, since I mean US elections last November, you've had, I mean, just a fundamental change in the way that people view these assets. You've had a fundamental change. Obviously, you had, you know, a fundamental change from a regulatory standpoint with genius and uh, you know, so many other laws and regulations around the world that have been passed in response to that. And I think, I mean, you know, one of the biggest things that it's done is actually separated stablecoins from crypto in people's minds. Right. I mean, like stablecoins are crypto, right? And like, you know, the three of us know that and we can talk about that. But for the, you know, for like the average person, for the average business, you actually kind of you need to separate them, right? And you can't let people think about them. Like people cannot think of USDT in the same way that they think of dog and cat coin, right? Like that needs to be two totally separate concepts. And more and more people are starting to see stablecoins as a dollar, as an alternative to a dollar, right? I mean, look, when we display balances to customers, if you have a stable coin, that's just a dollar, you just have a dollar balance, right? I don't care if you gave us, you know, USDG on Solana or you gave us, you know, PYUSD on uh, you know, uh Ethereum or you know, whatever it is that you gave us. If you have a stable coin, it's a dollar. And so, you know, we do our best to try to communicate that. And I think more and more people are seeing it that way. Um, one thing that we have not seen a ton of to really finish that thread off, right? Uh, and finish the way that people sort of perceive these assets. We still don't see a ton of companies holding large amounts of treasury in stablecoin. And I think that that is that's one thing that is still coming, at least in emerging markets. I think it's one thing that's still coming. I think that's really the next sort of evolution of the space is companies actually using stablecoins as a sort of alternative to dollar banking. Um and I think really the only way to get there is gonna be like yield-bearing, right? Like yield-bearing assets, yield-bearing, you know, more yield, risk-free yield specifically for the companies holding those assets.
Chuk Okpalugo:And so by that you mean stablecoins are really a transmission mechanism. It's like, hey, I need to get capital out of this country. Great, there's some liquidity, going to use yellow card, go from local currency to stablecoins, from stablecoins back to my own treasury, don't hold stablecoins for too long. And you're saying that uh one of the things to um get more stablecoins being held in treasury is like a yield-bearing asset that they're comfortable with.
Chris Maurice:Uh certainly, yeah. I think, I mean, you know, look, we see we do see people using stablecoins more than just pure transit, right? More than just, I mean, you know, have it for five seconds and then, you know, move it, uh, move it somewhere else. But we don't see people holding stablecoins for long periods of time unless there is an incentive to do so. Right. And again, look, I mean, this this might be unique to you know some of the large corporates that we deal with. Um, I think for individuals, it's probably different. And I I mean, I know that it's different because I see, you know, Binance and Coinbase and uh, you know, the balances that some of these guys hold in stablecoins, right? And so for individuals, that's probably different. For these large corporates, you know, these guys are used to earning overnight on idle funds, right? These guys are used to parking money in treasuries for a couple of weeks or for a month or you know, anything like that at a time and being able to earn on these idle funds. And I think that that is that's one thing that you know, in order to see corporates holding large, large balances of stablecoins, that's probably still missing. Um and I think, you know, obviously there's a ton of players in the space that are that are working on this. And even with you know, the big stablecoins, you see, you know, more incentives and things like that to hold. And so, I mean, that for me, that's one of the things that I'm really excited about over the next, you know, couple of years, right? I mean, because we've seen so much this past year. One thing that I'm excited for is seeing more corporates actually holding stablecoins, because then you just you end up in a much more stablecoin-enabled world, right? Where, you know, these transactions can settle instantly, where we don't have to deal with Swift anymore, where we don't have, you know, I mean, just tons of money at any given point sitting in Swift, you know, waiting for it to land on the other side. Um yeah, I think that's uh that's that's one thing that uh you know that still gets me excited about the space.
Raj Parekh:You mentioned a couple, I mean, really, I mean, these are all really interesting points. And there's like a lot of implications to that. Like one, like I guess, you know, how are how are banks and fintechs in the region or continent, especially in Africa, responding to this if they're not stable coin enabled? And then two, like there's like this undercurrent of dollarization now that's potentially happening here as well. And, you know, if you're if you're a central banker and regulator, that's something you probably have to think about too. But you know, what what are some of those implications and you know, how are you seeing like the market respond to it? And it feels like, you know, it's it's your opportunity as yellow card to continue to you know race ahead as well.
Chris Maurice:Yeah, yeah, yeah. So I think um, I mean, yeah, those are I mean, those are two separate things, right? I mean, uh commercial banks and central banks. I think on the on the central bank topic, um one big thing that I always that I always tell people and that I always you know like to make sure that is uh you know that like you know this this point is made, is we don't actually see dollarization happening on the ground because of stablecoins, right? I.e., you know, it'll be a cold day in hell before you walk into a coffee shop in, you know, Buenos Aires or you know, uh Nairobi or anywhere else, and you're you know, paying for your latte and and you know, stablecoins, right, writ large. That's just not something that we really see happening right now. Um and I think you know what it is doing, what stablecoins are doing from a like a technical level, and and you know, uh, you know, what this technology is actually enabling, is not for more people to use the dollar in ways that they weren't before. It's for people to use the dollar that they were already using for various different types of transactions in a much better way. Right. You know, the the user experience of the dollar kind of sucks. Right. Like, I mean, you know, like all of us have used the dollar before, right? Like the dollar is not a fun currency to use. I mean, in the US, before, you know, Cash App, like if I needed to pay you for lunch and we had two different banks, like there wasn't even really a way to do that, right? Like it's like using the dollar is not a great user experience in general, especially internationally. When you start dealing with correspondent banks, when you start dealing with uh, you know, international wires and and all of this, it just becomes really messy. Um added complexity in emerging markets, where you know, when you look at some of these emerging markets, in some of these countries, the banks aren't even able to access correspondent banking, like proper US correspondent banking. And so now you're dealing with a bank that's dealing with another bank in another country that's dealing with, you know, JP Morgan or City or, you know, HSBC or any of these big correspondents. And so, you know, there's just there's so many layers of complexity in actually utilizing the dollar. Stable coins aren't we we're not seeing unique uses use cases for the dollar. All that we're seeing is like existing use cases for the dollar that have existed for, I mean, as long as the dollar has existed and as long as the dollar has been the global reserve currency, being more accessible, being more user-friendly, right? And being, you know, really uh something that these businesses are able to deal with and manage. And so, you know, and I mean, look, I I think a great example, if you look at the M2 money supply for, you know, I mean, a number of these emerging markets, you'll find that more than half of these assets are already sitting in dollars. Right. And so it's not, it's not that, you know, stablecoins are dollarizing countries that, you know, were, you know, not you know, that were not at all dollarized before. It's that stablecoins are making it so that people can actually utilize the dollar in their day-to-day transactions. And I think, you know, where this becomes important, um, as you think about dollarization, it's not about like how do you convert an economy to use the dollar. Where it becomes important, I think, from the US perspective, is how do you ward off the threat of like China and some of these other major economies giving people a good user experience on their currency before the dollar figures it out? And so that that's more what we see, right? And and you know, from the conversations that we have with like, you know, US officials and and you know, people like that, that's that's more the concern than like, you know, oh, let's go, you know, dollarize all of these economies. It's it's you know, how do we make sure that people continue to use the dollar that they're already using for international settlement, for invoice settlement, for all of that? Um for commercial banks, I mean, on the other side, again, I mean, I can only speak for you know emerging markets, right? But I I do believe that it's gonna be similar in the US and in Europe, where I think you're gonna see over the next three years, you're gonna see banks allowing stable coin deposits, right? And it accept it, I think within the next three years, you will have a major bank in the US, probably even like a JP Morgan, that accepts you know, USDC and other, you know, major stablecoins, USDT, et cetera, USAT, uh, as one-to-one dollar deposits. And I think, you know, in in the countries that we're operating in, banks have been one of our largest growth vectors. And I think for 2026, banks are gonna continue to be one of our largest growth vectors because these banks, more than anybody, they see this technology, they see all of this happening, and they see a better way of managing dollars. They see a better way of managing international transactions, managing their own treasury. And you know, that's exactly what these guys are looking for.
Chuk Okpalugo:I think that's an awesome insight that uh probably could do with some emphasis, where stablecoins are effectively upgrading the UX of the dollar. And you mentioned that these nations, commercial banks, businesses, and individuals, but obviously we're focused more on the institutional and the business side here. We're already utilizing the dollar or trying to utilize the dollar. And you know, we can think about global trade as the kind of core thing here. The example you made earlier was of a food producer that just needs to import, like they we don't produce this thing locally, we need to need dollars to import. We need dollars for the For various different reasons, and they always needed dollars. And now stablecoins have come in and fixed what was a broken UX. And I think that's an interesting way to frame it, but also I think it's an interesting lens to look at non-US dollar stablecoins. Because if you take that same logic, stablecoins upgrade the UX of whatever underlying currency, I guess it's it, you know, logically you can say, okay, well, where else uh is there a need to use a given currency in large kind of uh areas where the UX is poorer, and if you could just upgrade that UX, more people would use it. Um is that a way to think about the opportunity and potential of non-US dollar stablecoins? Do you see the demand or can you see how non-US dollar stablecoins would fit into your business?
Chris Maurice:Yeah, so I I have I think a pretty unique view on this because we've seen a lot of non-US dollar stablecoins come through and largely fail. Um I think in general uh in general, I think you know the US dollar is a unique currency in global trade. Right. And so as such, it makes sense that US dollar stablecoins are really the only stablecoins. I mean, you know, look at the the entire market cap for Euro stablecoins right now is what, like 200 mil or something. Right. So I mean it's not you know, these are not they're they're not holding a candle to, you know, to tether, right? And so I think when you look at, you know, US dollar stablecoins, the US dollar is a unique currency in global trade. And so it makes sense that you have, you know, different issuers and and you know, sort of uh, you know, all of these uh opportunities to issue a you know a virtual dollar because everybody is gonna need to use it. Everybody needs to use the dollar in in some way, shape, or form in their daily life. Um when it comes to local currency stablecoins, I think where a lot of companies have gotten it wrong is I don't actually think that you'll have, you know, again, look, with some exceptions, I think with euro, like euro is used enough for you know certain trade and and cross-border and everything that you could probably have a company doing a euro stablecoin that would do fine. It's not gonna be, you know, tether or circle, but it'll it'll do fine. Um for most currencies around the world, I don't think you will be able to have like a company, like as a private company, issue a local currency stablecoin that will be successful. I think that the the metrics of what you need to be successful in a non-US dollar stablecoin are very different and end up aggregating to large banks in those countries. I.e., I think if a large bank in you know South Africa issues a Rand stablecoin, I think that that would do very well. And I think that there's a lot of opportunity for that pushed out and and you know, really, I mean, spread throughout that bank's network. And when you think of you know everything that banks do, especially in in you know emerging markets, right? Banks are the ones usually that have the POS systems that are doing the processing, right? Banks are, I mean, you know, banks are involved in in sort of the full end-to-end flow of these of these transactions. And so I think you could get a large bank in a lot of countries to issue a non-USD stable coin, a local currency stable coin, that would do well, that would get a lot of people using it, that would get people using it for local transactions, right? People using it in a shop, using it the way that people use mobile money today, right? And just sort of texting money back and forth with the right user experience. But it it requires that initial distribution. Um and I I just I think that that's the mistake that I see a lot of companies, because I see a lot of companies that try to issue local currency stablecoins themselves, right? And we look, we looked extensively into this, I mean, many times over the years, you know, is this something that we should do? And we were never able to really get conviction on the ability to distribute it without partnering with a large bank or without partnering with a large, you know, mobile money company in these markets. And so I think it is it's one of those things that like look, eventually everything tokenizes, right? And you end up, you end up in a you know fully tokenized world and and all of that. And and local currencies are not going to be any different. All these local currencies will end up on chain and it'll all be you know stablecoins essentially for local currencies. I think the the question is who wins that, right? And I I just I don't know that you will have a private company that will be able to do it the way that banks will in these emerging markets.
Raj Parekh:Yeah, yeah. So overall, interesting take. I mean, you know, there's there's obviously a lot of examples of folks trying to issue. Um, I I you know I talked to a lot of stable coin issues around the world. Do you see any like treasury efficiency that that you guys can get from it? Do you guys see like, you know, you mentioned that banks are becoming some of your biggest customers now as well, because you guys are you know aggregating the market also. Is there a world where you know yellow card supporting 50 plus exotic currencies, they they tokenize and you know, you guys can help you know facilitate that quickly on chain. Is there is there any like back-end treasury components of it? Or to your point, no, it's like without a distribution partner, we really just can't get this thing off the ground.
Chris Maurice:Yeah, without the distribution, I don't see a lot of benefits, even from like a treasury standpoint. And and again, this is where this is where like the US dollar being a unique currency in global trade comes in. When you think about local currencies, local currencies are typically the destination. Whereas the dollar in a lot of cases is like the car, right? It's it's the you know the transit mechanism to actually get to said destination. And so, you know, from that perspective, what we've seen is in almost every case, people need physical delivery on local currencies. If I am buying, you know, Ugandan shilling or Argentine peso or Thai bot or any of these currencies, I need delivery of that currency. I need that currency in a bank account because there is something specific that I need to do with that currency. With the dollar, you know, the reason that people are willing to hold dollar stablecoins is because the dollar is, you know, again, this sort of like uh how do you say it's this, you know, yeah, it's this, you know, middleman asset, right? That people are, you know, people are going into the dollar in between trades. People are going into the dollar in between international payments, in between currencies, in between, I mean, you know, all of this stuff, right? Uh 90%, over 90% of FX transactions globally still involve the dollar in some way, shape, or form, right? Even for, you know, conversions that are going between local currencies, 90% of them still go through the dollar in some way, shape, or form. So the dollar is just so much different of a currency. There's so much more transit that happens in the dollar, right? It's so much more, there's so many more, you know, global payments and things like that that happen in the dollar. You know, if I if I have a bunch of, you know, peso in Colombia, it's it's typically because I need something in Colombia. I need to be interacting with the Colombian banking system. I need to be making payments, I need to be, you know, doing this, doing that. It's it's not necessarily something that I'm just holding in transit where I'm more willing to hold it on chain. And so that's, I mean, that's really the problem that we've run into with these, with local currency stablecoins, is yes, I can tokenize any of these currencies. But you know, if you know, Raj and Chuck are doing a transaction between each other and I'm tokenizing the currency, but both of you need it in a bank account, all I've done is add an extra step. I've added an extra unnecessary step of actually tokenizing the currency. And it becomes, you know, sort of more uh, you know, tokenization for tokenization's sake, right, than it is like actually valuable in that transaction flow and actually valuable from a liquidity standpoint.
Chuk Okpalugo:Yeah. It's an interesting, if not controversial, debate. I posted something recently on this with trying to like just articulate my thoughts on the matter and um kind of discuss what you're talking about here in the sense that there's just so many uses for the dollar that even existed before stablecoins, where they are needed as a kind of in-between for trade, for the kind of clearing uh currency for intra-company transactions, extra company transactions, and FX and so on. And you can just look at the demand for non-domestic currencies by foreigners in another way of saying that is how many non-Americans hold the dollar, and how many people from a given uh how many people hold a currency that are not native to the country that currency is issued. And the dollar is the number one on that metric. And I think uh at the start was uh 50% of cash, US dollar cash is held outside of the US. And the next currency on that is the euro. So you kind of alluded to it earlier, but I also think that there are there is an equivalent. We'll see, you know, like US stablecoins are still very small, but there is still there is that kind of in-between holding this thing as a way to go between other currencies characteristic of Euros. Uh and so one should expect that. But we're seeing a lot of stablecoins, you know, Japan, um, Indonesian rupee, Korean won, um, Brazilian RIs, uh, Mexican pesos, all the ones that you'd expect that are part of global trade. And I think that we'll have to just continue to watch to see how many national, foreign national, uh, or call it foreign multinational companies want to hold these currencies in the stablecoin form before that payout, as you mentioned. And I think one way that could happen is, I guess two ways that could happen. One is uh call it banking as a service 2.0. I think we're very fortunate in the US or in the West in general to have sponsor banks which have great APIs, and therefore you can build a revolution, you can build a China financial. And that exists in some countries, but not in all. And I think if you enable folks to build FinTech applications, they're not going to really care where it comes from as long as they have the right APIs. And that is a way that you could drive kind of through a backdoor, you know, long local currency stablecoins. Uh another is um, I guess technically technically not stablecoins, but treasuries, like bonds, i.e., you were mentioning earlier, why would somebody hold the Kenyan shilling when they're trying to pay it out? Well, maybe the Kenyan business would hold Kenyan shillings if it could they could get access really easily to uh government bonds. Now, big question mark there because do you want to hold the government bonds of some of these countries? Yes, potentially, if it has the right liquidity, who's it issued by, is it issued by a local bank, or in conjunction with local bank or securities laws and so on. Um, I think there's potential there. But um, you know, given the various different bond crises bond crises of the last two or three decades, it's questionable which of these tokenized government bonds would be liquid and used in this way. But I think those two are areas of potential uh for non-cur non-US dollar currencies to take off. It's just as you said, the net new use cases rather than kind of what we see today with the dollars being transported to a better UX.
Chris Maurice:Yeah, for sure. I think uh I mean the other the other things that I am because I look, I mean, long-term, like I I do believe that you will have stablecoins on every currency in the world and and you know, eventually that will be you know the the standard for transacting. I think um I'm I'm more skeptical about sort of how that gets done. Like, i.e., do we actually think that like, you know, private companies will be able to do this around the world? And I that's where I'm more skeptical. I think that like banks and others that have local distribution will end up owning a lot of that space. Um But one thing I I will say one thing that I am very bullish on local stablecoins for, which again, this is, you know, this is only this only matters in certain currencies, right? Heavily traded corridors, places like Mexico, you know, where there's just a ton of transactions going on, um, is hedging, right? The ability for a company, you know, to your point, the ability for a company to hold peso because they have a certain amount of expenses in peso. And, you know, maybe the peso is going to get stronger this month, right? So I need to hold peso uh to essentially hedge it and then you know be able to cash it out when I need to pay those expenses. Um and then for regional trade, and I think this one, this is one that actually I think is is very exciting. Um, and this is you know, sort of the, I mean, the opposite of like the dollarization conversation that we were having. But you know, when you look at regional blocks in a lot of these, uh in a lot of parts of the world, you have a dominant currency in that region that is used quite a bit for regional trade, right? Uh, you know, South Africa is a great example for like the static region, where I mean, you know, something like 70% of the trade in that region goes through South Africa for Malawi, Botswana, Zambia, Zimbabwe, et cetera. And so, you know, these countries use the Rand a lot for these transactions, right? You don't actually have to do that regional trade in dollars if there is a way for somebody in Botswana to hold Rand. And so I think that's where, you know, that's also where it starts to become interesting is enabling regional trade in, you know, a series of other sort of bigger currencies. And then obviously hedging for some of those bigger currencies as well, for some of these global, uh, you know, global companies.
Chuk Okpalugo:Yeah. No, those are great examples. And I I think, no, you're totally right. I I think the uh there's a question of how does this happen? Who will be the issuer? If it is banks and commercial banks, do they want to hold government treasuries or do they want to make it their own balance sheets and then this becomes token as deposits? What's that backed by? Um, do you need deposit insurance or is it going to be central bank reserves? Is that just a backdoor CBDC? You know, it goes on from there, but there's a lot to there's a lot to kind of needle through as as the space evolves. Raj?
Chris Maurice:Yeah, what is money backed by anyway?
Raj Parekh:You know, it's uh Yeah, it's a it's a social construct, right? Um, and maybe uh just you know, we've we've talked a lot about the benefits of stablecoins. Maybe let's just talk about you know barriers. And you know, you're you're obviously building a pretty you know important business, especially in the African continent. But can you maybe just describe like the yellow card platform today? Like what do you guys have out of the box? You guys are obviously like now focused heavily on B2B also. And maybe any barriers that you think that you foresee for your business like longer term, it it all it all sounds great, but I'm sure there's like some things that you can point out as still problems that haven't been solved yet, too.
Chris Maurice:Yeah, I mean, super high level, right? I mean, we offer the full infrastructure for you know, I mean, these companies to be able to enter into the space, right? So, I mean, you know, we work with you know the visas and PayPals and and uh you know Western unions and money grams and and you know, people like that, right? Um the full infrastructure on the digital asset side, that's you know, wallets, subwallets, the ability to send and receive across 30 different blockchains and all these different assets, aggregate all of that. On the fiat side, that is uh on and off ramping against uh over 50 currencies, right? Mostly uh emerging market currencies, mostly illiquid currencies, um, global US dollar payments, you know, all that fun stuff, right? Just the ability to actually use stablecoins in the real world for you know for real-time transactions, and then the compliance infrastructure, right? So built-in on-chain monitoring, sanction screening, you know, AML, all of that, making sure, you know, especially for these large corporates, large banks, et cetera, that you know, we are able to keep them safe and and you know, keep things uh up to their policies and up to their standards uh as they're going through. I mean, in terms of barriers, right? I mean, look, the biggest barrier that we run into is having too much fun. That's uh that's the biggest problem in stablecoins. That's that's every day, man.
Chuk Okpalugo:Every day.
Chris Maurice:Every day. Just having too much fun, just enjoying it.
Chuk Okpalugo:24-7.
Chris Maurice:And so, no, I mean, look, I think I, you know, if you had asked me that, if you had asked me that, you know, a year ago, I like I the honest answer is I am I am trying to reevaluate what some of the big barriers are. Because I think if you had asked a year ago, the biggest barrier was education, the biggest barrier was regulation, it was, you know, all of this. And look, regulation is still an issue in some places. But the reality is that I mean the sea is changing, the tide is changing so rapidly that I don't necessarily, you know, even if there are unfavorable regulations in a certain jurisdiction today, I don't see that as a massive blocker because I know that there are processes going on in pretty much all of these countries to change that. Right. And there's just been such a tide change in terms of the way that countries are viewing these, uh, you know, this technology. And so, yeah, I mean, you know, look, 13, you know, 13 months ago, I mean, you know, the companies that we work with now, some of these guys didn't want to talk to us, right? I mean, I there was one financial institution in particular. I won't, you know, throw anybody under the bus. There was one financial institution in particular. I walked into the boardroom with them recently. They had their entire C-suite there, right? It was the CEO that that helped set up the meeting. They had their entire C-suite there. And I walked in and I said, guys, you know, two years ago your customer service reps weren't returning my calls, right? This is, you know, we've come a long way in a short amount of time that, you know, now you guys are, you know, now you have the entire, you know, except team here trying to understand, you know, what your stable coin strategy should be. So I mean, this space has just come a very long way in a short amount of time. And everything that I thought the space was gonna do in like five or 10 years, we have done in, you know, what not. I mean, I've just I've readjusted all my timelines. I used to say it'll take 10 years to do XYZ. I now say it's gonna be five, right? I mean, it's it's just I all of my timelines have adjusted after this year. And so, I mean, yeah, look, I'm quite bullish. I think we're going to a dollar fifty. Um, but uh, you know, I am still uh I'm still I'm still reevaluating, you know, what are gonna be the next challenges. I think obviously, you know, making sure, you know, that like private companies and things like that, that there's you know proper, you know, proper audits and and uh you know that the companies are being regulated properly, which again, genius takes care of a lot of that, right? And so I mean, you know, for USDT, USDC now, you have I mean pretty clear regulation from the US in terms of you know the way that they need to, you know, to handle the funds and things like that. So I mean, yeah, I just I I think I mean to me the biggest the biggest sort of point of weakness in this space still is, you know, where some of the assets are being held from like a commercial bank standpoint, right? We saw this obviously with uh you know Silicon Valley Bank, but I think that you know, having like JP Morgan and some of these guys open up their bank to reserves is gonna be key, right? Once once JP Morgan and and like City and some of these banks are holding all of the assets for like Circle, for Tether, for you know, some of these other guys, I think I mean, you know, that that I mean alleviates, you know, sort of the last reasonable concern that I think people can have about the space.
Chuk Okpalugo:Okay, as we wrap up here, uh Chris, one thing we like to do is uh a quick fire round questions. So first, if we project out five years from now, what does success look like for yellow card?
Chris Maurice:Oh man. Um I think for me uh and and for the company, uh the most important thing is making sure that banks, financial institutions, and corporates across the world have access to this technology and are able to actually implement this into their rails from the ground level uh at the same time as everybody else. I think that emerging markets largely were not left behind, but late to the game and late to the party with the internet and and you know, with so many other technologies. And that's why every trillion dollar, you know, all the big trillion dollar tech companies are American companies, right? You don't there's no Google or Amazon of Europe or I mean just any any other part of the world really, right? In terms of you know, multi-trillion dollar market caps. And it's not, it's not because you know the US has just the smartest people in the world or anything like that. It's just it's a it's a matter of regulation and it's a matter of access to the technology early. And so I think you know, making sure that because we are still early, and so making sure that all these countries, all these banks, all these uh, you know, uh corporates, et cetera, have access to this technology from the ground level to be able to build those trillion dollar companies is is critical.
Chuk Okpalugo:Yeah, no, absolutely. We and we are still early. You mentioned all the changes that uh we've seen this year in regulation. It's still just beginning. It's still got many more quarters to go. So we're at the very, very early part of this journey. Okay, so next question. Do you have a book, movie, TV show, or other content you'd recommend?
Chris Maurice:Oh man.
Chuk Okpalugo:Um for stablecoins? No, just in general. Just what does Chris anyway recommend people to read? What do you like?
Chris Maurice:Uh man, you know, there is a uh there's a great uh there's a great book. I I think I'm probably recommending this because it's one of the ones that I read recently, but it's called uh The Last Colonial Currency. It's about the CFA in like Francophone West and Central Africa. Um and you know, all of the terrible things that France does to that part of the world that I don't think most people on earth actually are aware of. Um but you know, if you want a I mean, if you want just a book that explains in detail why stablecoins and monetary sovereignty and the ability to control your own money is so important, uh, I would highly recommend that.
Chuk Okpalugo:Okay. So it ended up being stablecoin related. Awesome. Uh that's an interesting one. And I and I, as you mentioned, everything comes back to stablecoins, right? So I don't have closes. So I just use the stable coin. Except and then um who else in the kind of stablecoin space uh do you think we should get on the show? Or what other topics are not talked about that we should discuss?
Chris Maurice:Man, aside from you guys. We're on every day. You got uh you got the you got the the expert panel right here, baby. That's uh who else do you need? You guys should it should just be the two of y'all talking, man. That's how you guys need me.
Chuk Okpalugo:Maybe we'll have an episode one day, just me and that fighting it out.
Chris Maurice:You know, you okay, honestly, you know what I would like to see? Uh this is not I don't have a specific person because I I don't I don't know, but I would actually I would actually very much welcome um, and I mean I I guess I know a few, right? But I would very much welcome having like a stablecoin skeptic on the show. I think that that would be, I think it would be great to to sort of round things out with somebody that actually doesn't think that this technology is is, you know. I mean, you know, look, you had skeptics of the internet, you had skeptics of, you know, you have skeptics of every technology, right? You got uh, what's the who's the gold guy that you know hates Bitcoin or whatever, right? Uh, you know, so you have, you know, like they I'm sure they exist. I'm sure I know I know of a few, you know, companies and everything that I've heard of that have been, you know, pretty anti-stable coin, but most of them have come around, right? I would, I would love to hear from like an actual skeptic and just sort of understand why. Like what are they thinking about that you know the rest of us are not, right? Because I think you know, we get, I mean, you know, look, I'm I'm in a complete stable coin bubble. I will be the first one to tell you that, right? Like, I I mean this is all I do all day is you know, think about coins that are a dollar, right? So like I would love actually to hear from somebody that you know is totally outside of that bubble and thinks that what we're all doing is just ridiculous.
Chuk Okpalugo:I've got a few folks in mind. We've got Christine Lagarde of ECB, who've got the right the guys who write the uh the Bank of International Supplements uh research papers. Um, and then other kind of I think central bank authorities are actually great folks to get on on uh on just to kind of discuss fully in detail their concerns so that they can be addressed, undiscussed.
Raj Parekh:Well, Christine, if you're listening to this, you should reach out, reach out in DMs and we'll get you on.
Chris Maurice:I shall be in your DMs by tonight, man. I have no doubt.
Chuk Okpalugo:Awesome. Chris, this has been fantastic. Uh so much really, really interesting takeaways here. Uh and uh course uh that that was to be expected given your experience and insights. Um I had a lot of fun. Um where can folks learn more about you or yellow card?
Chris Maurice:Website and social media, man. That's uh it's you know, that's uh it's the best place, yellowcard.io, and then I'm you know, I'm on Twitter and everything else with just my name.
Chuk Okpalugo:So excellent. And we'll keep those uh we'll add those to the show notes. Uh Raj, what about you?
Raj Parekh:You can find me on X at Artbaric and then Mana.xyz.
Chuk Okpalugo:Awesome. And for me, it's stablecoinblueprint.com on x at chuck underscore xyz and on LinkedIn at ChuckLogBoligo. Uh that was an awesome episode. Chris, again, thank you for coming on the show.
Chris Maurice:Thank you, Jens. Appreciate it.
Chuk Okpalugo:That was awesome.
Raj Parekh:Thanks, Chris.
Chris Maurice:Amazing.
Chuk Okpalugo: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.
