Transcript of Why Non-USD Stablecoins Need Sovereign Debt Onchain | Stableminded S7.3 Etherfuse ft David Taylor
Stabledash
0:00[music]0:05[music]0:07Everyone has has fundamentally still0:10today disagreed that stable coin0:13infrastructure will be a thing for0:15foreign countries. And we think that is0:18obviously wrong. A majority of people0:19believe that the US dollar will be like0:21the swift rails where you have these0:24US-driven rails and on these endpoints0:26there's an off-ramp to the blockchain.0:28Stable bonds essentially, which are0:30these yield bearing products, create0:32what we feel are comparable currencies0:35to the dollar that will complement0:38bridging these countries to the0:39blockchain in a way that's meaningful0:41for them, in a way that drives0:42efficiencies. Season 7 of Stableminded0:44is powered by Braille. With Braille, you0:47can launch stable coins in just minutes0:49and most importantly, actually make them0:52usable. They have a single API that0:54unifies licensing, custody, on-ramps and0:57off-ramps. Braille is the stablecoin0:59issuer for emerging ecosystems like1:01Canton and Lightspark. And they also1:03provide core infra for payments and1:05embedded finance teams like Coinflow,1:07Rain, [music] Flashnet, and hundreds of1:09others. This season is all about stable1:11coins for everyone. Learn more at1:13braille.xyz.1:15>> All right, Dave Taylor, thank you so1:17much for joining. How's it going?1:18>> Good. Thanks for having me.1:19>> Well, I'm excited for this. Etherfuse is1:23building some really really, you know,1:25specific and interesting technology on1:28top of stable coins and the rails that1:29we'll that we'll get into. You've been1:31building in the space for many many1:33years. Um I was I was relistening to the1:36conversation you had with um Danielle1:39Dick Dixon from Stellar recently um on1:43some of these convictions you've held1:45for many many years are now starting to1:47come true.1:48>> Yeah. And why don't you as we anchor the1:50chat a little bit here bring us into the1:54you know stable coin origins or the1:56origins of Etherfuse even maybe before1:59you started the business like when when2:00this problem around what we now call2:03stable bonds really started to become2:05interesting for you to go work on and2:07then you we can dive into how the2:08platform works today the product itself2:11how it's architected maybe some of the2:12use cases but we can start with the2:15origin story if that works.2:16>> Great. Yeah, I'll give you two minutes2:17on myself and co-founder and then go2:20into the company thesis and that kind of2:22informs the product. It's it's all2:24related. It's it's pretty interesting.2:26My background is computer science,2:27cryptography. I did like PKI2:30infrastructure and security2:32infrastructure as a software engineer2:35for quite some time. So, I I did PKI2:37infrastructure at Boeing. So, loading2:40software parts on a plane and running2:42them and making sure it's the right2:43thing. And at Apple, we did a similar2:44thing. and we did network security and2:46infrastructure and PK infrastructure.2:48Then I went back to school and I met a2:51friend of mine and we started a startup2:52studio and we built a few startups2:54together and one of them that we were2:56building together was called Neural2:57Payments and it is they're a great2:59company. I think that they are3:01continuing to grow but the thesis is is3:04essentially the stable coin thesis but3:06fix payments to work like stable coins3:08where it's easy to transfer from P2P3:11person to person and like the real3:12customer there was credit unions uh who3:15didn't like zel because zel's owned by3:17the bigger banks and so they wanted3:19their own alternative to that so but3:21when we were building it I brought on my3:23current co-founder AJ who's my brother3:26too and we built that together and just3:28realizing how hard it would be in the US3:31to actually fix how payments works and3:33settlement works would is nearly3:36impossible, you know, and in some sense3:39if there was just like this opportunity3:43to supersede it all, it would be better3:46similar to like, you know, in emerging3:47markets where they're not going to lay3:49fiber, they're just going to go straight3:50to satellite for network infrastructure3:53because it would be too hard, you know,3:56to like say all of Africa to lay down3:58like underground around fiber for4:00internet services. You know, in some4:01cases it's so remote it's like4:03satellites are going to be the way that4:06they get the comparable technology to4:07us. We felt like, hey, once when we were4:11building this, once we saw um4:12[clears throat] the blockchain get4:14quicker, like what was really a flag for4:16us was it was quicker and cheaper, it4:18just felt like, oh man, this is an4:21opportunity to like connect the world4:23quickly that won't exist. So AJ and I,4:27my co-founder at the time was Isaac4:28Sultana. Great person, last co-founder4:30of a company called Send Grid. He4:32supported it and he wrote his first4:34check, our first check. And we basically4:36said we want to provide the4:38infrastructure to make payments uh4:41across the world uh in a seamless way.4:44And we kind of understood how it needed4:46to be done. We had this thesis that if4:48you could what we call lift the4:51interface of the risk-free rate in each4:53currency that you could fundamentally4:56reduce payments and enable other people4:58to create create infrastructure on top5:01of it that would do that. And that was5:03four years ago um the US 4 years ago was5:07super anti-crypto and so we did not feel5:11like this is this would the US would be5:14a place for us to do this. we just spin5:16our wheels on legal and other things.5:18And in hindsight, it was the right5:20choice. But I wonder if had we stayed in5:24the US, we would have built a stable5:25coin issuance company like the ones that5:26are blown up. I don't know, you know, if5:28we would have just pivoted. But in some5:29ways, we didn't because we found a5:31fertile ground. So we we did some5:34research and we just hypothesized that5:38the biggest economy with the most5:40incentives to enable like blockchain5:43based payments for their population5:44would be the right place for us to go5:46and they would be open to us to issuing5:49assets on chain. So what we5:51fundamentally wanted to issue was5:53sovereign debt on chain. So yield5:55bearing assets onchain. And we have5:57terminology for this today, but back5:59then we didn't, right? Like now you say6:01yield bearing stable coin, everyone6:02knows what that is. Or you say reward6:04bearing stable coin, everyone knows what6:05that is. He had to like from f first6:07principles like explain this idea and6:08how it would work. And it's6:10fundamentally a bond, right? A promise6:12of payment based on some revenue source6:14that a token holder would would buy and6:17then own. And so we uh looked around the6:20world and we said based on these6:21criteria which is like remittance6:23payments, cost of credit, access to6:25financial products, which country would6:28be has the most incentives to say yes to6:30us and which we got a list. It was like6:32Mexico and then like a fourth would have6:34been like Brazil and then Nigeria. So6:36out of the China and India and Mexico,6:38it was somewhat of a quick decision. You6:40know, China it was pretty authoritarian.6:42I don't think they let two Americans6:43come in and build I would say like a6:45sovereign product for payments there.6:47And India is also uh historically pretty6:49defensive. So if you're as a foreigner6:51create a company there and it does well,6:53they will fund a competitor quite6:56heavily and out compete you kind of this6:58happened with like Uber and stuff like6:59that. So we felt Mexico was really out7:02of those top three the only real7:03solution. And this is like still a crazy7:06idea. Like no one still understands why7:08we did this. And in some ways it's still7:10kind of like a radical idea I guess is7:12what I want to say. But we went to7:13Mexico and we engaged their SEC. It's7:16called the CNBV. And we said, "Hey, we7:18want to create bonds on chain and how do7:21we do that?" And in Mexico, there's this7:23law. It's called the fintech law. It's7:25basically like a similar sandbox model.7:27If you're in crypto or if you're in uh7:29securities, you kind of know it's like a7:31sandbox model where you say, "I have7:33this new idea. It doesn't exist yet. I7:35want to do it. Can we do it together?"7:38Go to jail. And you can see you can say,7:39"Try this." And but but it's like in7:42these guard rails, you get to build7:43something innovative. And one thing that7:45worked out that we totally had no idea7:47would was they came back two years later7:49after back and forth which two years7:51later is a death sentence in a startup7:52by the way and we survived somehow. They7:54said we don't believe that your assets a7:56security and that was weird because it's8:00basically like a no action letter. It's8:02a omission you may operate. You know8:05we're not defining what this is and so8:07but it doesn't fall here. And that was8:10unique. It was cool in some cases. uh it8:12gives us a huge leg up in the sense that8:15we don't have this like long regulatory8:17process anymore when we want to issue8:19new assets but we do have a lot of like8:21nuance on how we do things. So in many8:23ways we've had to hypothecate what we8:26are and then follow the laws that fit8:28those best and ask for interpretations8:30for of the law. So since then we've8:33issued sovereign debt on chain in the8:36form of a yieldbearing asset. So,8:38Etherfuse has by far the most foreign8:42currencies on chain that at all for any8:46company, but also that offer yield to8:48the token holders in our assets. They're8:50they're reward bearing. So, as you hold8:52it, they're continually compounding.8:54They acrew yield and value uh you know,8:58almost in real time. And so, that's what9:00Etherfuse is. That's the history of us.9:02But what EtherFuse fundamentally is is9:05sovereign debt onchain in the form of a9:08a reward bearing token. We've issued9:10today about seven different countries.9:12By the end of 2026, we'll have over 100.9:15We're launching Korea and most of Asia9:17in Q1. And it's really exciting to see9:20because there's now that we're here,9:21there's a lot we can do that can help9:24people kind of see the future of this9:26this stable coin space. So, I want to9:28stop there because there's more to like9:30our philosophy, but that's like the9:32foundational layer of what Etherfuse is.9:35And I think the why is still yet to be9:37discussed, but um that's how we got9:39here. It's really really beautiful.9:41Seems like this year is going to be an9:43extremely high growth year in terms of9:45just countries like going from seven to9:47over 100. I'm excited to dive into that9:49a little bit. I guess the the part that9:51I'd love to know more about and just to9:53give context to maybe some of the people9:56who are just now tuning in to the the9:59state of the builder economy, the10:02founder economy, like what it's like to10:03be building in this space right now10:05versus four years ago when you started.10:07Um, and you can't go back and you can't10:11re you can't go back and do things over,10:13but it it seems like you you've had sort10:15of like a strategic thought of like10:17where you built, how you built.10:18Personally, when I when I think about10:20Etherfuse and the the position that it10:22sits in this market, there are a lot of10:25those like US focused issuance companies10:27like Braille and like these other folks10:29who are kind of running down that lane10:31with US dollar focused stable coins, but10:33I I think Ether Etherfuse has such a10:36unique position in the market and at10:38least from my early understanding of it,10:40I appreciate that a lot. So I'm I'm just10:42maybe speak a little bit more to like10:45what that decision to go into this like10:47Mexico Mexico first option not US first10:51or the infrastructure you were building10:53now with sovereign debt in more of these10:55emerging markets what that's now created10:57and how you even objectively think about10:59the opportunity now versus four years11:02ago. I think a uh a lot of it is like11:06first principles of a startup was who11:08are we what can we do that other people11:10can't and what are people doing that we11:14should be doing that they're not and if11:15you had a vin diagram that's like11:17totally etherfuse um so we viewed and11:21we've we've come to be right here but11:24but I don't know that we were right on11:25not playing in this space but we11:27essentially said as like four years ago11:30like as regulatory story to me like this11:33space is inevitable. So maybe I'll put11:35you in my mindset like four years ago11:37people were thinking this was like just11:40a joke and it's all fraud and still11:42today you see politicians saying that11:44you know but it is11:46>> meaning traditional financial11:48instruments11:49>> crypto11:49>> the economy that is represented11:51traditionally represented now on on11:54chain that that for you has been just11:55like this is going to happen it's just a11:57matter of when11:58>> it's so obvious like and I think it was12:00obvious to us cuz we were building in12:02crowdfi these things It's like the12:04stable coin thesis, you know, and so it12:06is inevitable. It doesn't matter right12:08now what anybody does. Like if if a12:11different party switches over, we're too12:13far in and it's too better. It's too12:15much better than the traditional way of12:18doing things that um I mean that's a12:20very bad way to say what I'm saying, but12:22that it's inevitable. And so in that12:24mind frame, we were thinking, okay,12:26well, how can we be lucky enough to12:28succeed in in this space? So we viewed12:31like as regulatory modes are removed12:34through through clarity like with the12:37genius act there are a lot of people12:40given that clarity who will be able just12:42throw money at a problem like banks and12:45win this space. So we felt in the US we12:49don't have anything there's nothing12:50about us that will help us out compete12:53like JP Morgan you know or out compete12:57like the Tether or USDC or the these13:00other people. So and there were also a13:02lot of very smart people like Brell and13:04like Coinflow that were were we know and13:07we're friendly with that were working13:08this space. So we said everyone has has13:11fundamentally still today disagreed that13:15stable coin infrastructure will be a13:17thing for foreign countries and in13:19foreign currencies. And still today13:21people say that and we think that is13:24obviously wrong. you know that if we're13:27going to connect the global world and if13:28it's such a leap of like technological13:31achieve and embedment and efficiency13:34gains that obviously this space will13:37participate and and no one was doing it13:40but also the way people I guess I would13:43say no big players were doing it and13:45also the way that the people who were13:47entering in the space were doing it they13:49were doing in a way that we felt it was13:51wrong and let me explain I think13:53fundamentally people if that a majority13:56of people believe that the US dollar13:58will be like the Swift rails operate14:00today where you have these US-driven14:02rails and on these endpoints there's14:05kind of like a an offramp to the14:07blockchain. There are some assumptions14:09there that we think are wrong in that14:11those countries will start to spend and14:13operate and use the dollar instead of14:16their own currencies. And so we said,14:17well, how can we given that we believe14:20that that that's not true, what do we14:22need to build? And stable bonds14:24essentially, which are these yield14:26bearing products are our thesis or our14:29counterargument where we create what we14:31feel are comparable currencies to the14:34dollar that will complement bridging14:37these countries to the blockchain in a14:39way that's meaningful for them and a way14:41that drives efficiencies. So that's uh14:43the why of Etherfuse is no one really14:47has conviction in this space necessary14:49to on-ramp the rest of the world and14:51there's a lot of value we can bring in14:53this space and no one is really set up14:55to do it well because of the way that14:58they've chosen to go at it from a15:00US-centric model and uh it's pretty15:02interesting how it's played out because15:04now you have a lot of players in the15:08stable coin space they're all great15:09people all competing over this large15:12market share and then you have the other15:1550% of this market that's a ghost town15:18except for Etherfuse and it's just15:20interesting that people have let us get15:22to this spa this place.15:24>> You're talking about US focused assets15:26versus non US focused assets.15:28>> Yeah. If you look at like the market and15:30like the balances that the world holds,15:32it's about half non- US and it's half15:35US. And so if you look at the TAM, it's15:38everyone competing for half the market15:40or 80% of the FX market, I guess you15:43could say, but no one's really focused15:44on the rest. And so Etherfuse is focused15:47on the rest. We love where we're from.15:50We love the United States. It's a great15:51place. We believe in it, but we also15:53believe that there's these other15:55opportunities and this value that we can15:57bring. And so a lot of people in the15:59space are truly our partners. We're16:01non-competitive with them in any way.16:03One of our earliest partners, Braille,16:05which is a stable a US stable coin16:06issuer. We work together to issue stable16:09coins regulated from the US that are16:12denominated in other currencies. And one16:13of our most successful one is the16:15Mexican peso. So that's something that16:17cannot happen one without etherfuse and16:20cannot happen without the blockchain.16:22You cannot have like a US company issue16:24a foreign currency in any meaningful way16:27in Trafy, but it happens today with16:30broil and it is the cheapest way to send16:32money to Mexico today. It's the cheapest16:34FX rates by far and almost nobody really16:37knows it yet. Let's let's double click16:38on this a little bit on like just one16:40how that works, how you've structured16:42that with Braille. Um and and maybe how16:44that's similar or different to other16:46sovereign coins or stable bonds that16:48you're going to bring to the market with16:50Braille or in other forms. I'm just16:52curious like what what does it take to16:55practically do that as Braille is a you16:57know they have MTLS. They're I think a16:59money service business in the US. It17:01sounds etherfuse is a USbased firm.17:04Correct. In this context,17:06>> we are not actually. So,17:08>> okay.17:08>> Well, we a little bit of complicated17:10there. So, our cap table is in the US.17:12So, from an investment structure, it is.17:15We do have operational units where we're17:17regulated from and our operations are17:19are held. So, we started in Mexico. So,17:21we have a few two companies in Mexico17:23that issue and custody customers assets.17:26But we also now have one in Kazakhstan17:28as well because we got this is probably17:30another story, but in Mexico we got a no17:33action letter which is like this17:34implicit okay. In Kazakhstan we got an17:37explicit okay which is like we17:39understand what you do and this is how17:40you do it. So it gave us a little more17:43confidence in what we do. So anyway, so17:44we are I would say the best way to17:47describe us is we are a foreign company17:49with a investment vehicle in the US.17:52>> Okay. And then with with that approach,17:54it sounds like you've you sort of take a17:56localized approach to each market that17:59you want to go into. Um, yeah, how how18:02does Braille fit into this and18:03specifically maybe with this Mexican use18:06case? What does that what does that look18:07like?18:08>> So, I'll go back to our product and then18:09I'll go back to Braille. Our product is18:12we set up regional infrastructure to buy18:16custody and issue bonds on chain that18:21are essentially synthetic pointers to18:23real bonds and give anyone in the world18:26or anyone on the blockchain access to18:27them. So we go into Mexico as one18:31example. We create rails to mint and18:33burn our assets from any bank account by18:36any person. So we give you like virtual18:39access to infrastructure there through18:41sovereign debt where you can hold and18:44buy those bonds with crypto. So Braille18:46wants to issue a Mexican peso from the18:49US and maybe I'll step back further. A18:52stable coin is somebody gives you a18:55dollar. You're a stable coin issuer. You18:57keep that dollar. You put about 75% in18:59bonds and 25% in cash fiat. And then you19:03issue them a token. Right? So we cover19:07the part of the per bond purchase the19:10collateral. So bre with with uh stable19:13coins can now custody Mexican bonds to19:18create a safe collateral to issue a19:21Mexican product. And so the way that we19:23operate is we enable the world to have19:26the mechanics to issue foreign19:29currencies. And Braille has the19:30regulatory ability to issue money on19:33chain or or maybe some lawyer wants to19:35change me saying money, but issue a19:37pegged currency or pegged coin on chain19:40and they wouldn't be able to do that19:42legally in any way without using us in19:45the blockchain. You could probably19:49Yeah. Not in any efficient way for sure.19:52And so what we do is we just create this19:54infrastructure. We go to Korea. We go19:56all over the world. We get these huge19:58institutions that are regulated in those20:00countries, the trust trusted20:02institutions like BBVA or Shinhan Bank20:04or and we collateralize and we hold20:06those assets in a bankruptcy remote way20:08for token holders and so token holders20:10can buy those assets and build things on20:12top of them and so we give you virtual20:15rails into those economies so that you20:17from your area can run a company and20:20create products. It's really cool. is20:22the what's been the most difficult part20:26of this? I mean, I'm imagining just you20:29going from seven to over a hundred in20:31the next 12 months given this um20:35setup that you've described where you're20:36taking a very local approach. You're20:38working with these players. How how how20:40is that practically going to work? Are20:42you having like one to many20:44relationships um that are really20:45meaningful? Maybe bring us into the like20:48go to market of the next 12 months and20:50how you get there. Well, the original20:52hard part is no one would bank us. So,20:54there was like um what do you what's20:56that banking controversy where they're20:58debunking everybody? I can't remember.21:01>> Chokepoint.21:02>> Chokepoint. Yeah. Yeah. So, choke choke21:03point had foreign implications because21:05the US has what I would say all the21:07leverage or had all the leverage. It's21:10changing with crypto, but where they21:11could say if you want to be a banking21:13partner with us, you can't do XYZ. So we21:16would go to banks in Mexico or banks in21:19Spain or banks in and they would say hey21:22we just did a quality check and JP21:25Morgan Chase said that we can't work21:26with you you know which was just crazy21:28we had we would so in the past we would21:31get multiple custodians per asset21:33because every now and then one would21:35drop us right that's all gone that21:38problem is gone and so what that has let21:41us do is consolidate with strong21:43partners so before or we'd have to go21:46specifically into each country, find21:48what I would say is a mid-tier regulated21:51entity who would work with us. And now21:53we can level up a little bit where we21:55can like the 2026 we're focused on21:58consolidating our custodians, the22:00minimal set that gives us the most22:01breadth. And so that's why I'm confident22:03in the addition of these currencies, the22:06system, the CRM, the infrastructure to22:08manage the purchase of these assets and22:10to to ensure that the rate is being22:13compounded at the same rate as the22:15assets on the back. That's all built.22:17Adding the infra adding new kind of what22:20I'd say partners and custodians is22:22pretty trivial. And so we're actually22:24going to shrink the size of our current22:25custodian base. And um but they will be22:28I'd say bigger partners than and you'll22:31hear them. I mean some are obvious. You22:33can go to our site BBVA and and Shinhan22:35are two of the biggest ones. They're22:37like the Black Rockck of Latin America22:39and the Black Rock of Asia. So that's22:41helping us get breath to the rest of the22:42world and that gives us rails that gives22:44us access to those economies without22:46doing a ton of work each new location.22:49>> Yeah. So 12 months from now you're going22:52to do this. We're going to talk again.22:54and you're going to have over a hundred22:55of these currencies issued. You're going22:57to have a really strong condensed strong23:00list of custodians. I think next year is23:02going to be a massive year of growth for23:04your business, but also just the utility23:06of these things and bringing the market23:08into more of a mean of what what really23:10the the true financial markets are today23:12with companies like you guys. And I'm23:14really excited for that. I think you've23:16you've spoken on the idea of how23:18competition at at the currency level is23:20really good and it's good for the US to23:23have that level of competition. If you23:25look at the you know still over 99% I23:28think of the total supply being US23:31stable coins. I I think that there's23:32such an upside for you guys to ride on23:34that. what you know, zoom us into the23:38moment where this really like maybe23:41maybe to make this we're still laying23:43the groundwork as you you're offering23:45more of these products, but I'd love to23:47better understand in your mind based on23:49the conversations you're having with the23:52um I guess what you might think of as23:54like the demand side or the the adoption23:56side of now that these products exist,23:58how are how they're going to market, who24:00the the first really key exciting movers24:02are. bring us into um what is now24:05possible cross border and some of the24:09things that you're seeing maybe24:10historically versus um what now is24:13possible when all of these 100 plus24:15currencies either fuse are available.24:17Let me tell you let me go back and24:19answer the question first let me tell24:21you what's possible and what's exciting24:22coming up but let me go back and tell24:23you what's the hardest one of the harder24:25problems that we're facing and then we24:27can get back into you know how these24:28solutions are going to become more and24:30more available in 2026. So the biggest24:33thing is bringing FX truly on chain is24:35happening. We're live today from the US24:38to Mexico on different chains where you24:40can truly FX onchain, but also bringing24:42the risk-free rate of other currencies24:45and virtual banking on chain is is24:48coming officially live. So24:50fundamentally, Etherfuse from a users's24:53perspective is just two two and a half24:55products. It's yield safe yield and then24:58it's FX. And even though there's tons of25:00stuff that happens now, part of that,25:02the half is hedging. So if you want to25:04send a big payment, you know, from the25:07US to like Brazil and it's going to take25:10officially like between two companies25:11like 4 days to settle. It's not the25:13technology. It's like literally the25:15agreement between the two parties25:17sometimes takes time. You want to hedge25:19that payment so you're not exposed to25:21some FX risk. We can do that for you. So25:23those are the exciting things that are25:24coming for all every currency that we25:26have. Now the reason why 2026 is going25:30to be a big year is because I think25:32we've like one demonstrated our value25:35the one of the harder things that has25:37existed is in high growth and in VC you25:40can be outfunded and your ideas can be25:42outfunded I guess is what I'd say and up25:45until this point VCs were just throwing25:48money at anybody who I think took the25:50US- ccentric view because it fits the25:53power laws of BC investment and we've25:56outs survived D a lot of those companies25:58or they're getting acquired and getting26:00bought up and doing different things. I26:02think really the the I just released26:05this paper called stable coins are not26:07enough. I don't know if you had a chance26:08to read it but it is fundamentally a26:10thesis to unramp the rest of the world.26:12We need more than just this like stable26:15coin pro like interface. We need that26:18plus the stable bond interface. So what26:21we are doing fundamentally this year is26:23partnering up with what I'd say is we26:26call local or regional stable coin26:28issuers and creating a complimentary26:31product to help them succeed on chain.26:33So the easiest way to think about this26:36is if you are like the I I'll just use26:39Mexico because I know Mexico really well26:41but you could pick any other product,26:43right? There are about $90 billion worth26:45of flows from the US to Mexico every26:47year or growing to about that. this year26:50and DeFi doesn't really have an optimal26:52way to facilitate that marketplace on26:55chain because to facilitate that you'd26:58need about 4 to 5 billion in liquidity27:01on chain in the peso to create the27:04counterparty pair. Well, nobody wants to27:07LP or provide liquidity for the peso27:10because it's it's viewed as a high-risk27:12asset. So right now people will LP like27:16dollar product marketplaces because they27:19say oh I have like a 100k I might as27:21well tokenize that and put it in a27:24marketplace so I can earn like three27:26more percent you know or something like27:27that and then I could in bonds because I27:30get those fees. Well the peso you don't27:32want to swap to the dollar to the peso27:35to LP because it fluctuates wildly,27:38right? So our stable bond product is27:41what I would say a comparable store of27:43value to the dollar because it is 100%27:47for the most part the the sovereign debt27:50of that country. Now the way sovereign27:51debt works markets for the most part27:54they have to create a reward for people27:57holding their currencies or investing in27:58their debt and that reward has to28:01compensate them for not holding the28:03dollar. So sovereign yield for the most28:06part will give you greater returns than28:09it would for you holding the dollar. So28:11even though this marketplace of the28:14future, say some AMM or some order book,28:16won't really work with a stable coin28:18peso, it will work with a stable bond28:20peso. And so we are this like28:22counterparty product that can be28:25exchanged on chain for a local stable28:27coin for free because it's denominating28:30the same currency and can give you28:32access to to to participate in these28:35marketplaces that you otherwise couldn't28:37participate in. So we feel we've built a28:40product that helps on-ramp the rest of28:41the world by enabling them to28:43participate in DeFi which will enable28:46these flows to happen on chain. So that28:48was a lot. That's like a word salad, you28:49know. So hopefully I explained it well,28:51but we think this is like the missing28:52element and people are starting to28:54recognize it. So for us, we are28:56partnering up and engaging a lot of28:59local stable coin issuers and creating29:01the missing element for them to move29:03flows through them offchain. So the way29:06it would work is a USD like the Braille29:08the Braille equivalents globally.29:10>> Yes. Exactly. Exactly. And um really29:14excited about it. I mean, we've fought29:15really hard in the the I would say the29:17arena of ideas on Twitter and against29:20like wellunded competitors and I think29:22we've been right. You know, it's not29:23like we've been necessarily better or29:25better funded. We haven't. We've been29:27less funded than most of them, you know,29:28but a good idea is a good idea and I29:31think this year it's undeniable and29:32we'll start to see this growth as a lot29:34of these stable coin issuers like look29:37to participate on chain in more29:39meaningful ways by by working with us.29:41>> Yeah. So right now you know you have29:44this situation that exists where to your29:46point different treasury jurisdictions29:49or parts of the world US Treasury versus29:52Brazil or others will have different29:54returns based on what their treasuries29:57are returning. I think I heard recently29:59that the Brazil is around 15% is that30:02right something like this and US is like30:05fiveish give or take five six30:07>> it's probably closer to four today you30:09know but yeah US and yes yes30:12>> so you so you have in my mind I'm just30:14simplifying this you have this reality30:16where like there are different returns30:18coming from different places and are you30:21imagining from a like a programmatic30:23standpoint for generating generating30:25returns that's the whole goal you said30:26it's you know FX or yield. If yield is30:29the goal, what what are some of the30:30builders or developers that you're30:32talking to? How are they thinking about30:34what is now possible from like a routing30:36or like yield optimization standpoint30:38that you now have when a market like30:41Brazil that's returning more than three30:44times or four times the percentage of30:46obviously the risk is different the the30:48jurisdiction you're you're interfacing30:50is different but how are the developers30:52or builders that are working with you30:55thinking through optimizing returns when30:57an you know a highly optimized highly31:00effective programmatic layer of money31:02can now exist in this way like what is31:05am I thinking about this right or or31:07what are what are the developers you're31:08working with thinking through31:09>> I think you are and I think um really31:12the outcome is pretty simple it's like31:15if you look at the fintech world it's31:18like transfer wise it's like you know31:20these neo banks all they offer is yield31:23and payments you know and it's cheaper31:25and better on chain so I think we're31:27going to start to see these neo banks31:30provide what we call like embedded or31:33web 2 crypto-powered products that31:36enable to run their businesses today.31:38So, I just think that multicurrency31:41accounts will come available, but31:42they'll be powered by stable bonds. I31:44think FX will now move on chain because31:46it's way cheaper, like factor cheaper. I31:49think you'll see as the world starts to31:52wise up, the crypto the crypto space31:54starts to get smarter. You'll see people31:57recognize like right now, I mean, no one31:59will say this and the president would32:00never say this out loud, but they are32:02actively devaluing the dollar and it's32:05on purpose. It's to increase the middle32:07class, right? To increase the purchasing32:10power of the do, the ability to have32:12manufacturing come back in the US,32:14right? No one would say this, but it's32:15happening. So, how does someone an32:17ecosystem that's 99% denominating the32:20dollar save their value? You know, you32:22put it in Bitcoin or you could put it in32:24Salana, but that's also highly volatile,32:26right? Well, we give you the opportunity32:28to diversify into safe assets. Our like32:31the peso has outperformed the dollar32:33like by 20%. It's it's crazy. So, if32:35this last year, you would have just held32:37held your assets in stable bonds. You're32:40returning like 20% greater. So, I think32:42that we'll start to see more32:44sophisticated Crowdfi actors recognize32:47that these things exist and be able to32:50use them to their benefit to do better32:52hedging, to better diversification. But32:54also, I think we'll start to see the32:56fintech winners of the last decade use32:59embedded crypto for their products33:01because it's just a a better33:03infrastructure. So, like the new banks33:06and things like that.33:08>> Yeah. um you guys are at such a33:10foundational the foundational layer in33:13some ways to to make this work. You have33:15the issuance just I'm trying to33:17visualize this a little bit. You have33:18the issuance layer, the braille layer in33:21a way above it that is building and33:23delivering some of these specific33:25programs to market and then you have33:28their end users or the neo banks or33:30those who are like maybe integrating or33:32embedding at the top. Is that a very I33:35know that's oversimplified, but is that33:37a kind of a way that you see this where33:38you are really interfacing with those33:41like kind of core issuance partners33:43locally and then they're delivering33:45those those financial products to the33:47fintech neo bank lately? Yes. at the end33:50of the day and historically we've had to33:51build stuff to prove that it works you33:53know like with Braille we really had to33:55like build it together and in some ways33:56it was like us convincing them to do it33:58and we've also built like FX pools and34:00stuff like that took us how to do it but34:02at the end of the day we want to be like34:04an AWS of sovereign debt so sovereign34:07debt gives you virtual access to that34:09location so we don't necessarily want34:11people to know that it's it's etherfuse34:14powering it we want to have these strong34:16relationships with like the revolutes34:18with like these market places with uh34:20stablecoin issuers. Uh that's where we34:22see ourselves fitting in mostly because34:24no one's doing it and it's a big34:27complicated job and we are the like34:30fundamental first business principle.34:32It's something that we can do better34:33than anyone else in the world and we34:35feel like we're the only ones who can34:36really do it. We understand this space34:38and there's not really a benefit for34:40other people doing it like our fees are34:42like smaller than brokerage fees. It's34:44just a the value we can add. So yes, we34:48view these new fintech products as being34:50the ultimate like interface with with34:52customers where they're just using us34:55under the hood to provide these34:56services.34:58Um, as you think about the way that this35:01takes shape, it sounds like from the35:03front-end user one, they they they35:05probably won't even know Etherfuse is is35:07being used here. But it seems like the35:09way you're describing it, the really big35:11exciting the next couple years of this35:13is when the revolutes of the world begin35:15to realize they can embed some of those35:18things that they're delivering today on35:19traditional rails or building themselves35:22on traditional rails into a a native35:25embedded blockchain powered system built35:28on top of Etherfuse. like what is the35:31what what is the dream customer or the35:33dream? if you could just kind of like35:35wave a magic wand and have this company35:38email you tomorrow and be like, "Hey,35:40like we we'd love to talk about working35:42together, what is that use case that you35:44guys are ready to maybe maybe two-part35:47question like what is the use case you35:49can deliver today that you can just hit35:51a home run and like please send me the35:53email cuz we're ready to deliver versus35:55like let's go build this thing together35:58over the next 12 to 24 months cuz this36:00is the real big opportunity like today36:03versus you two years from now. Who are36:05those types of companies?36:07>> We have many of these launching in 202636:10by the way. So, and maybe I won't say a36:11specific one because of that reason, but36:14we are not building anything dealer. We36:16are ready today. So, we have fintech36:18companies integrating with us today to36:21offer these services. And what are they36:23offering? They're offering multicurrency36:26accounts that return yield like savings36:28accounts. So they're offering savings36:29accounts in other currencies that can FX36:32and be sent to those local to and from36:35those local destinations for cheaper36:36than they can today. So those are the36:38big winners. So Neoanks is what I would36:41say. Neoanks are are are our favorite36:44type of customer because we solve a lot36:46of their problems right away. The others36:49would be those who want to issue maybe I36:52shouldn't say this but some cool credit36:54card products uh we have coming up where36:56we can do some very cool things with36:58local payments and on the other side37:00this is like a two-sided market for us.37:02The other big partners are these37:04regulated institutions with big37:06distribution channels. Those are great37:08opportunities for us to enhance our37:10services. You could pick any NEO bank,37:12any wallet that has huge distribution37:14channels. We're a great partner for them37:16on day one. And we can give them web two37:19like APIs that let them send payments37:21anywhere in the world, have yield in37:22anywhere in the world and uh do whatever37:24they want, issue stable coins in those37:26currencies. And those are the big37:28opportunities and partners for us. On37:30this last point, I know your computer is37:32maybe going to die here in a second, but37:34>> I'm I'm sorry about that. I don't know37:36why it's it's going slow though, so it's37:37still at 3%. So we can it's okay. We'll37:41we'll throw one more in here. For me37:43personally, like the credit card stuff,37:45the layer in which that sits from a mass37:48adoption standpoint and a real like37:51learned behavior standpoint in my mind37:54is something that is so fascinating and37:56and prime for disruption. Like my my38:00first job out of college was cold38:02calling merchants at Square to try to38:05convince them to change their point of38:06sale. and just the severe pain that that38:10class of businesses all around the world38:13face with their point of sale and38:15payments and then still that like layer38:18of issuing acquiring and credit card38:21processing. There's so much economic38:24value that is leaking away from38:26communities because of these things.38:28Yes,38:28>> you have, you know, what you've created38:31is essentially, you talked about this on38:33the pod with with Stellar, this38:35intermediary, like the intermediary38:38layer can essentially evaporate if you38:41have something like stable bonds because38:43of the the native settlement that this38:45unlocks. Maybe just speak a little bit38:47to that with maybe some of these38:49payments or cards or how you think about38:51that. I just I'm selfishly asking38:53because I'm I just get so fired up about38:55native settlement.38:56>> Yeah. So, if you know how a lot of cards38:59work, a lot of it is like on the card if39:02you post collateral, they'll unlock39:04payments in that region. I don't I don't39:06know if you've like the prepayment39:08cards. So, stable bonds are an efficient39:11form of collateral that is comparable to39:14that regional fiat. So, you see all39:16these like stable coin card issuers that39:19are blowing up, right? Well, in Latin39:22America, those are still blowing up, but39:24they're inefficient because every time39:26you pay, you have FX. So, you want to39:29buy a soda with your credit card, you39:32hit like 100 bips FX. Well, our products39:35don't have FX in those in those regions.39:39So, we provide the exact same utility39:41with no FX. And those merchants and39:44those credit card partners can interface39:47with us directly to manage that39:49collateral that needs to be posted. So a39:51customer could load up the card using39:53our assets or even just any crypto and39:56we swap it to our asset which is the39:58safest form of collateral that can be40:00used for that card. We've unlocked40:02regional payments that are cheaper using40:05the blockchain than anyone else. And we40:06are launching in Q1 a pretty awesome uh40:09demo of this uh that I'm very very40:11excited about. But it's it's going to40:14blow up because it's just so much40:15better. So, if that makes sense uh to40:17you. I'm being I'm being cryptic, but40:19I'll show you.40:21>> I'm excited.40:23>> Let's uh maybe that'll be our takeaway40:24here in Q1. Let's um by that time we'll40:27hopefully have our live stream kind of40:28like news show going and that would be40:30we'll make sure we'll get our mics and40:32everything ready before we get that show40:35live. But it'll be fun to one Dave just40:38like I'm excited for just to know more40:40about that because that that sounds epic40:42and personally I I just once you get40:45that nailed the scalability of that40:48recipe is going to be something that40:50>> most most markets around the world are40:52going to need. It's just like so excited40:54to hear more on that. Any final thoughts40:56on just like what you would leave a40:58stable coin focused listener with ways41:01to support you guys get involved? I just41:03personally highly recommend you follow41:05Dave Taylor on X Ether Views. Even throw41:08Mike Featherstone a follow. Why not?41:10Yeah.41:10>> Hope he's enjoying his new role there.41:12It was exciting to hear you guys brought41:13him on. But yeah, man. Any any final any41:16final thoughts to the the listener base?41:17I41:18>> I think the biggest point we're trying41:19to make is if we truly want to on ramp41:22the world, an ecosystem or technology41:24that is solely reliant on one currency41:26isn't efficient or or capable. And so I41:30think we just want to wrap it up by41:33saying like we have a reason to exist41:35and a purpose to exist and that's why we41:36still exist given that we've been I'd41:38say punching up quite a bit. And so the41:40way you can get involved is participate.41:42If you are low if you're a stablecoin41:44issuer we we want to work with you.41:45We're not competitive with you in in any41:47way. If you are a neo bank or you have41:50payments uh s uh payments products we41:54can improve those value that you keep.41:57If you're a foundation, we can bring FX41:59on chain. So, we can enhance like pretty42:02much the full ecosystem in in crypto by42:05partnering with you. And it takes kind42:07of a collaboration because we're not the42:09distribution channel. We're just the42:10assets. So, and we want to work with42:12you. So, one, it's just like read our42:14stuff. I think we're right. And it's42:16it's been contrarian for four years. I42:18think now it's becoming quite obvious42:20and so let's work together.42:23>> That's awesome, Dave. Thanks for the42:24time. excited to continue following the42:26journey into the new year and happy42:28holidays to you and your family and just42:30appreciate you taking the time.42:31>> All right, have a good one.42:32>> Thanks, Dave. See you, man. [music]
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