Every Correspondent Bank Will Support Stablecoins

[0:01] [music] I do think like that 10 years from now every major correspondent bank or peering bank will support stable [music] coin rates and maybe even 5 years from now and these things will absolutely converge right and will just be another rail. two of the most innovative and fastest growing companies in financial services [music] at scale have both independently come to the same conclusion that financing AI is [music] the crossover of the next decade if not century >> you know this idea that you just have to like throw everything out and put it on
[0:31] a blockchain you don't have to throw out all of your infrastructure in order to capitalize on technological advancements [music] you know you can layer it on top >> Robin Hood and particularly Vlad like they're just incredible communicators their ability to accelerate attention and interest in expanding a market of tokenized stocks. I think they can do in a way that that nobody else can. Welcome to tokenized, the show focused on stable coins [music] and the institutional adoption of tokenized real world assets. My name is Simon Taylor. I'm your host,
[1:02] author of Fent Brain Food and head [music] of market dev over at Tempo. And joining me once again is Guy Sheffield, head of crypto visa. How you doing? How's life? >> Life is good. It's good to have you in the bag. Yeah, you got to be out here more often. It's it's a great time every time Simon's in the bay. >> And also joining us today making uh a welcome return to the show is Anaveska, who is chief business officer at Dinari. How are you doing? >> I'm great. Thank you so much for having me, Simon. It's great to be here. >> Uh making a debut is Ferdy Debits, who's the co-founder and CEO at Augustus. How
[1:32] you doing, Fie? >> I'm great. Thanks for having me, guys. >> Thanks for being on the show, man. Super excited by what you're building at Augustus. But before we get into all the good content today, I've just got to remind viewers and listeners that uh opinions of our contributors today are their own and might not reflect those of the companies they represent. Please don't take anything we say as tax, legal, or financial advice and always do your own research. And of course, I'm happy to remind you that this episode is sponsored by Modern Treasury, who we had a great dinner with a couple of nights ago. This episode is sponsored by Modern
[2:03] Treasury. Stable coins are here and so are checks and a they're not going away. RTP and Fed now and new types of payments rails are emerging all the time. The challenge now is integrating all of these without slowing down. Modern Treasury offers one single API for fiat and stable coins, helping teams launch payments products in days, enter new markets and serve more customers. Trusted by companies like Procore and Navan and Morse and backed by over $600
[2:36] billion in payments history. Learn how to adapt to changing payments rails with scale and confidence at modern treasury.com. All right, story number one this week could only be one story. Stripe's uh leaked investor letter uh confirmed all kinds of details about the company as well as its acquisition of Open Router which Axios reports is for over 8 billion. For those of you that don't know Open Routter's one single API that lets clients access over 400 different
[3:08] AI models and potentially route tasks to a cheaper AI model if the Frontier Labs are getting a bit expensive. Uh, Stripe also mentioned that their first half revenue rose 41% year-over-year. Free cash flow rose 43%. Uh, and of course their last year payment volume was $1.9 trillion. Absolutely massive. And this is uh following Stripe being valued at more than $159 billion in February. Uh and
[3:40] they're uh alleged to also be uh putting an offer together for PayPal alongside private equity firms. Absolutely massive. The Stripe Boys say um the singularity has begun and they are benefiting from that tailwind. U what do you think about when you when you see this scale of news coming from a company that the size of Stripe? >> Yeah, it's interesting. I mean, when I first heard about the rumors, I actually thought it was a bit far off for them to do the acquisition because it's a
[4:10] non-trivial acquisition. It's like 5%age uh points of dilution for them. Um, but I I do think it's impressive with how much conviction they're kind of like leaning into this AI thing, right? Um, I think you really got to hand it to Collison and brothers. is one of these uh things where you just notice it's a founder business um through the kind of like conviction and size of of the bets that they can take which like outside in seem seem far off from the core business
[4:40] but I think they've yeah understood the singularity has begun and they're they're executing accordingly right >> yeah I saw wild stat floating by Kai on onx which was um strike today through its metronome business that they also acquired for about a billion uh is doing most of the billing for tokens and that billing uh gives them about a 2 and a.5% take rate on uh you know sort of AI tokens that have been sold but if you think about what uh uh open router does is it routts you to a
[5:12] different model um that might be lower cost but it's taking a 5% markup over the inference. So if you put the inference uh together uh with the 2.5% 5% plus 2 and a half they've now got a 7 and a half% take rate on the AI economy and I thought that was that was a a fascinating idea but Kai what what are your thoughts on this story so many thoughts u I I think to to your point like intelligence is becoming a new
[5:44] merchant category uh where people are purchasing intelligence at scale. It's one of the fastest growing you know merchant categories in the world and and open router is you I think about almost like the Amazon of intelligence. You know they're they're the marketplace uh that you can then buy any of these models. Uh so congratulations to to Alex and team and think they've built an incredible product. I've been a user of open router you know for a while. I find it to just be a really good developer experience. Uh I think this is one of the biggest stories of the year that you
[6:16] sits at this intersection of fintech, AI, a little bit of of crypto and I talk about some of the crypto aspects and stable coin aspects in a moment. And I think it could have a similar effect to the same way that the bridge acquisition seemingly came out of nowhere like you know I think for a lot of people there was you know skepticism around stable coins and it was like they're interesting and then when Stripe kind of made this high conviction founder bet to say oh we're we're going to acquire bridge it really jumpst started the
[6:46] category of stablecoin orchestration you led a bunch of other companies to say wait a minute like you know should we be doing this you how does this work bunch of new companies were were founded And now it's almost like it's the same thing for model orchestration. Uh where people are starting to realize maybe we don't all just want to use, you know, one or two models. Maybe we're going to be in a world with many different models and we're going to need infrastructure to be able to to route between those models. And and I think there's going to be this whole ecosystem and economy of companies built around how can you
[7:17] purchase intelligence in a an efficient way across many models across many payment methods with the right billing the right and so we're just now getting started but I think we'll talk more and more about this you on the show and it'll be a major you know theme going into to 2027. I I'm convinced it's the theme of the next decade of financial services is like how do we finance intelligence and I don't know if you saw Freddie that um ramp announced um router.com uh this
[7:49] is >> yeah I wanted to say say that just now right what a cheeky no what a cheeky move right you got like Eric coming out hey we just bought roto.com it's the cooler domain um and we by the way we also have this business um I thought it was good stuff as well. >> If you think about two companies that are perfectly positioned to finance the intelligence economy to bill for it and RAMP is all about we'll help you save money. They're really good at like how are we going to squeeze cost out of your
[8:19] business versus Stripe that's kind of more uh on the we'll help you put together your entire stack. it. Two of the most innovative and fastest growing companies in financial services at scale have both independently come to the same conclusion that financing AI is the crossover of the next decade if not century and it all those AI tokens all need a way to get financed. Um Anna uh thank you for jumping in here. Um would would love your perspectives on the
[8:50] stripe open router story if you have any. Um I think it's I mean it's the the first step in and probably a very interesting next few years. Um obvious I mean look we I I come from traditional finance. We think about this from the perspective of uh financial markets and so you know the the thing that it makes me think about is you know what how is this going to affect the development of uh agentic finance and you know if you have access to many different options. My question is always like how much do
[9:20] they start to uh diverge from each other and in what ways and how can you capitalize on that or what risks come out of that. So um you know thinking kind of a few a few years or maybe 12 months uh or maybe 6 months depending on how fast things go down the line. I think it's a it's a kind of a fascinating development in a in a story that um you know that that I think we've all been uh following quite keenly uh for some time now. >> Can we can we talk about two crypto intersections of of the story that I I
[9:51] haven't something to do with the show. Why not? >> The show is called tokeniz. There are many different types of tokens that that are now floating around in in the world. I I think the first one is, you know, I saw you the other day publicly, I think the you shout out to the the merit systems guys posted open router has been testing in endpoint on MPP, you know, using MPPP tempo, uh the machine payments protocol to enable stablecoin payments, pay as you go to be able to buy inference on open router. And I
[10:21] think inference is is one of the most interesting categories as we see X42 and MPPP uh where if agents have wallets for them to be able to you know purchase inference from any model pay as they go instead of having to you know pay upfront and then draw down against it. Uh and so I could see open router potentially becoming one of the largest or fastest growing merchant endpoints which you know I think we need more highquality merchant endpoints you know in the MPP and X42 you know ecosystem. It's also, you know, for all the stable
[10:52] coin nerds that, as we've talked about for years, like marketplace payouts are a great use case. And so if you think about what does open router do? Well, you pay open router, you know, they're the merchant of record and then they go pay, you know, dozens of infrastructure providers that are actually serving that inference. And so they have a more complex operational task if you're paying them in fiat and then they're trying to collect and aggregate and then say, okay, how much fiat do they owe to these different providers? And then pay out those providers. Those providers have GPU costs, they've got energy
[11:22] costs, bills to pay. I'm really excited for a world where you could imagine an agent buying inference on demand, you know, through MPP. The moment that that inference gets paid to open router, they could use a smart contract to automatically route it to the infrastructure provider. And so the infrastructure provider can get paid from this marketplace in in near real time. you know, instead of having to, you know, get paid, you know, a few days, you know, after, you know, funds settled of a payment that Open Router accepted. And so we've been talking
[11:52] about marketplace payouts and like here we have like the ultimate marketplace for intelligence potentially being one of the early adopters of crossber stable coin marketplace payouts, which I think will be a really big deal. Did you see that um Brex put out a study of the fastest growing um spend category for startups and growth companies and Together AI was actually the fastest growing and Together AI is a service that lets you run inference. And the median time for a startup to go from
[12:23] signing its first contract with a frontier lab for tokens for intelligence to uh renting its own inference has dropped from 24 months uh about a year ago to 5 months today. And so we're really seeing people kind of run down the stack of frontier model, oops, this is too expensive. I need to route between different AI models. Oops, this is still expensive. I'd like to rent my own inference and open router plus MPP is perfectly positioned then for the
[12:54] neoclouds underneath that to all get paid a lot sooner. So, how we finance uh how we bill and pay for all of that stack is is kind of one revolution. But the other revolution I know that you probably didn't escape you was, you know, Black Rockck, KKR, Blackstone, Nvidia, uh are really trying to figure out how how the heck do you finance this AI boom and and compute buildout. Um and they seem to uh the amount of private credit and debt issuance at the moment seems to be driving up treasuries themselves. you know, if you can get a
[13:25] corporate bond at 7.5% for data center infrastructure and treasuries at 5.3, uh that the whole capital market side of this is changing as well. >> Yeah, I would I it's a fascinating it's a fascinating area. Um I I'm very curious how how the financing piece plays out over the next year. Um it's one of those things I I wish I had spent was thinking about this years ago. I wish I'd spent more time on it like five, six years ago.
[13:55] >> You can't be ahead on everything. You can be ahead on tokenized stocks, but but but not absolutely everything. The one last thing from the investor letter I saw was that um compared to 2023 uh even post this acquisition. Um they've actually managed to buy in more stock and are less diluted than they were 3 years ago, which is exceptional cap table management by by those guys. I'm I'm going to move us to the next story. Um I don't know if you guys saw that Rain put out a very simple article on the anatomy of a stable coin card
[14:26] swipe. Um and it draw drew quite a lot of push back on X and there's a lot of discourse around it. Um so uh the core claim was essentially that preunding um and you know settlement over a using the correspondent banking network uh runs on banking hours. So, if I'm a card issuer, potentially uh I will be obligated to set aside three or 4 days worth of uh outflows of capital just to cover a
[14:56] weekend. So, if I'm a card program like CAST or dollar or any of those sorts of things and I settle, say a million dollar a day to cover a bank holiday weekend, I need to set aside $4 million and that $4 million or at least the $3 million is not being used for advertising or business. Uh but there were some who said this is inaccurate or almost misleading citing that um capped interchange markets like the EU work fine um and big issuers tend to scale from um the Federal Reserve earning 3.6%
[15:30] uh and netting improves capital efficiency. So why is everybody so worried about stable coin settlement? So Kai, why is everybody so worried about stable coin settlement? is are not all issuers absolutely fine. >> I I love to see more public discussion and debate and understanding of of the back end of card settlement and just getting deep into the the weeds. I I think the there there were a bunch of different concepts and and points, you
[16:00] know, throughout this, but I think that the biggest takeaway is that if you are a large bank in the US, yeah, settlement isn't really a big problem for you. It works well today. They don't really have a a huge incentive to change how they settle, you know, their card programs, uh their investment grade, you know, very low risk. uh they like holding on to money as as long as they possibly can. Uh they don't have to put up a bunch of collateral. It's it's it's not a problem. I think that the opportunity
[16:32] for stable coin settlement is lowering the barrier to entry to launch and scale card programs. Uh and it's, you know, smaller bin sponsors, fintex enablers. uh it's just a it's a new class of issuers who are higher risk, you know, who don't have some of the same benefits that that large, you know, banks have today. And so I think what we've seen is that that's where the demand comes from. uh and being able to have a fastmoving stablecoin native neo bank or fintech
[17:04] settle with us more frequently uh which reduces you know the the need for them to put up the same collateral that they would have before is a really good thing for the ecosystem. So I think this is one of these areas where on the different points multiple people can be right. uh it just it depends which which part of the market that that you're looking at and I think we see a huge opportunity for stable coin settlement for kind of mid to long tail which is really important to drive more competition and and cards getting to market. Um and I think that you know
[17:35] over time there'll be banks and particularly banks outside the United States that that leverage it but it's it's not solving a problem for Jason Bank of America and that's okay. >> That's yeah that's okay. Not all issuers are the same size but F there are still a lot of challenges with crossber for different companies of different sizes and money movers. Who would you say has the the crossber money movement settlement challenge uh today and who are you hearing from in your business? >> So first of all I I think the trap liquidity issue is real and I don't
[18:07] think that's fake news, right? I've seen it with cards. I've seen program managers of cards as well have been sponsors have to like like deposit these reserves. um or due to like weekend settlement delays. Um so I think like like even up to like a certain scale um I I I do think that's really true and I think it can be addressed with with stable coins. I I think then it's like the further away Sim to your question, the further away from America you go, the harder it gets uh to move money fast, right? And I think if you look at like adoption uh cycles of stable coins,
[18:38] it has been like has been emerging market story uh first and foremost. Um and I I think there's just a deep truth to um the same responsibility to both improve the customer experience right like access dollars and then access dollars that can be moved very fast across borders as well as improve the economics um of the underlying fintex right so for example even if you leverage traditional correspondent banking which Augustus is doing right
[19:08] like Augustus many ways is a modern correspondent bank right but still We're a bank and we're not like like we're not an L1 or rethinking uh kind of global money movement uh from first principles. It's a modern correspondent bank. But one of the most expensive things a corresponding bank is and has always been trapped liquidity right in these nostro accounts um because you have to hold these balances in different um geographies to facilitate the correspondent flows and uh once again I think that's a very real non-fake news way that efficiency can be improved by
[19:38] programmatically rebalancing that in real time through stable coins. Um, so I I do think that the emerging markets will continue to dominate for for some time uh in the stable coin world, but I do think they're like very real efficiency gains. I know I know you've done a lot with um crossber users. Your thoughts on on sort of some of the economics involved for for different geographies. >> Yeah. I mean, look at the at the heart and I think you know both you guys alluded to this is at the heart of it when money is in flight. It's not being productive, right? You're not earning
[20:08] yield on it. It's not being used for anything. Um so I you know there is this international story that I I think is very significant and especially I mean even within companies moving money can be hugely annoying. I I don't come from the payment space but we certainly hear about it um in terms of the usefulness of stable coins for for other things like investing there. We see a lot of we see a lot of interest and adoption. I mean any any type of um any type of payment is is only useful in so far as it it gets you the thing that you
[20:38] ultimately want whether that's earning you know earning some yield on your cash balances or uh getting access to something. So I mean where we see where we've seen a lot of um adoption and and just for context and distributes primarily through regulated channels uh into markets uh in Asia, Latin America um but we're I mean we have Dshares in in 85 countries um including the US. Now there is very much this international growth story of having access uh to dollar denominated stable coins. I think that's been I mean that's a whole
[21:08] separate story that we could kind of go down the rabbit hole on. But in all of these regions there is um there is a major utility to having both the the dollar denominated piece of it but also the speed piece of it right you you kind of want what you want right now. Um the analogy that I often use here is that like nobody demanded overnight shipping until you know we all had Amazon Prime and then suddenly we became accustomed to it and then that's kind of like your default right that becomes your baseline of what is acceptable in terms of
[21:38] waiting waiting for something and and I do think I I suspect we will see more and more of that even in um from a consumer's perspective even in um markets where where this type of thing isn't a huge problem uh right I think it's a it's a great analogy and it kind of fits what we've been saying of like just expectations are changing. Yeah. And now that you have you know a forba buddy that moves 24/7 I think that that could go across you many different you know types of use cases. Fy I want
[22:08] to hear more about kind of your view on correspondent banking and like the state of it how you're using stable coins within it. You say you're not trying to completely disintermediate and have a a different system. It sounds like you're you're trying to use stable coins to optimize how efficiently you can manage correspondent accounts. Can you you say more about your your approach there? >> Yeah, I think correspondent banking or wholesale dollar clearing in general is this fascinating business, right? It's such a weird one I think where if you look at something like a city TTS, city
[22:38] services business with city probably being one of the most iconic dollar clearers out there. Uh it's it's incredible, right? Like it's on one hand side obviously built on decades old technology. it's part of this like massive institution that that just like intuitively um cannot move fast and then at the same time it's printing cash rights on track to do 12 billion net income this year and so you really have to like think about um like think really hard like how can that be uh where every other part of the bank stack that was remotely relevant got challenged um over
[23:08] the last 20 years right we've had like the the retail challenge with revolution brokerage with Robin Hood um commercial with Mercury but correspondent banking you know dollar never got that challenger and I think like part of the answer is this whole thing around denovo banks that we're seeing right where it was just impossible to get these real bank charters um for for a long time um and and and now we have this small peer group of denovo fully chartered national banks that can like go bare metal on the dollar clearing side through their own master account and I think that that's like a really important factor and then
[23:39] the other aspect of that is my opinion that we've have these new technologies at hand that seem to enable a challenger to like really make a dent on the customer experience efficiency of these businesses. I do think stable coin stable coins play a part in that, right? Both in terms of like just another payment rail that is advantageous for certain routes and certain corridors as like the market has shown, but as as well as like just like make the banks back office more efficient in terms of rebalancing global liquidity pools. Um and so I think the ability to just like
[24:10] unlock that trap capital within a global balance sheet of a correspondent bank I think can prove um can prove quite valuable in making the corresponding bank model much more efficient. And so I I I I think like this is where S coins can then really shine in the context of these of these regulated banks um and and wholesale dollar clearing. It's so fascinating to me um that the nuts and bolts of global cash management and correspondent banking are now like the hottest thing in fintech since you know what you're building Ferdy and uh 10
[24:41] years ago I was working in um global cash management at at a bank and this was not something you would discuss in fintech circles. Neo banks were fun apps then you know uh that that the banks sort of looked down on because they knew where the real money was made and now the bit that makes the real money was the franchise is the crossboard a bit and that wins by being at scale it fundamentally wins by having massive massive scale but there are a segment of customers who don't win from that setup and I think being able to serve them is
[25:12] really really important so I think this is one of those two things can be true like the ex discourse is talking about uh large banks s who have great scale who don't have an economics problem in their scale but the rain article was talking about customers for whom they get left behind by that model and those customers are looking for new solutions who do have they do have trapped liquidity they do want instant 24/7 crossber they want higher yielding opportunities and the large banks just didn't see them as profitable or a
[25:42] priority before so new people can come and attack that I thank you for for kind of unpacking that 30. Um, we're just going to take a quick pause here while we hear from our sponsors, and we'll be right back. Stable coin operations usually mean a wallet from one vendor, an on-ramp from another, and then your controls are stitched together across both of them. The Visa stable coin platform fixes this handily. You can mint, move, and manage stable coins, access OpenUSD, and remain your own custodian all in one single shared
[26:13] environment. Then stablecoin linked cards let you spend balances anywhere Visa is accepted. And we know stable coin linked cards are in hyperrowth as our good friend Kai likes to say. That is Visa of course the global leader in payments and of course sponsor of this show. You can find out more at visa.com/crypto. This episode is sponsored by Privy, a Stripe company. Stable coins can't go mainstream without simple and secure wallets. That's where Privy comes in.
[26:45] Trusted by more than 100 million accounts, Privy lets users launch wallets instantly with familiar login like email or social. It's consumer grade user experience with enterprisegrade security. Start building with Privy. Learn more at privy.io. All right, next story is the Robin Hood CEO Vlad Tenev who is urging the US to clear a path for tokenized stocks as overseas markets are starting to advance. He called this the early stage of the global tokenization super cycle
[27:17] which is interesting. Uh Robin Hood already gives users in more than 120 countries exposure to 190 tokenized US stocks with dividends. And of course these tokens are backed onetoone with underlying shares but holders don't directly own them. Uh his settlement case leans on GameStop in 21 when clearing house collateral demands forced Robin Hood to restrict buying. Um fintech nerds like me remember that one well. Um that was uh a big big issue. Uh
[27:47] but he expects tokenized equities to carry traditional shareholder rights if regulation allows. Uh and with private companies and real estate to follow. um tokenized stock market share of all real world assets on chain has now grown to 15% since the launch of the Robin Hood chain uh with a total market cap of around 2.8 billion. Anna, this is Dinari's business. So obviously I'm coming to you first on this. Your thoughts on this story? >> Yeah, so the US already has a path for
[28:19] uh tokenized stocks to exist uh in the US. Uh Denari was the first to enact that. Um we've been live in the US. We actually announced this maybe two and a half weeks ago. Um I I think the important thing here is that there is a a a critical difference that has to be drawn between the different models of tokenization. And Simon, you alluded to this, right? When the uh in the Robin Hood model, there is an SPV that holds uh that holds these token or excuse me, the securities that back these tokens um and the token holder doesn't have any
[28:50] rights onto that security. Um, Dinari pioneered what the SEC refers to as the custodial model where the uh token holder has ownership claim on the security uh that backs that token. Um, and then all the kind of important stuff that goes along with that, corporate actions, um, dividends which others pay through to their synthetic token holders and so on. So, I mean, we see this news and we're kind of like, oh, that's interesting. Um, you know, we're already doing this and there there is a path for it. I can only assume that that you know
[29:22] what Vlad is referring to is a a clear path for synthetic tokens in the US. But the important thing is that that's a different financial instrument, right? You're you're not buying the security in that case. You're buying a different instrument that represents the price of that security and then certain benefits that go along with it. Um so different financial instrument uh different risks and benefits that go along with that. uh you know we we always love when anyone talks about tokenization especially of of securities that's as you point out it's our bread and butter um that's what
[29:52] we do so we we love all the attention that people draw to that to that subject but I would say the the markets moved far ahead of um of what I think a lot of people perceive especially in the onchain world where uh there is a focus on these synthetic uh instruments for you know that are useful for different types of purposes. Yeah, I I think first the the reaction I have is Robin Hood and particularly Vlad like they're just incredible communicators. Like if you look at the content that they put out,
[30:22] you know, the marketing content, u just, you know, Vlad's like position, it's it's so good. And I think a lot of companies can just learn from like how they communicate a vision, the events that they do. It's just they they execute, you know, very very well. Uh, and to Anna's point, it's like their ability to accelerate attention and interest in expanding a market of tokenized stocks. I think they they can do in a way that that nobody else can. There are a ton of questions around, you
[30:53] know, the the details of how these products are structured, how they should be structured, and and I'm I'm optimistic. I'm I'm not the securities expert that that's that's going to be sorted out over time, but it feels like you're starting to see the beginnings of a retail facing tokenized RWA market. And for the past few years and even like a year ago, most of the discussion around tokenized RWA was very much wholesale tokenized treasuries, tokenized money market funds, you know, not really like retailoriented.
[31:26] uh and it feels like every every week, every month going forward, there are more products that are focused on how do we enable the potential benefits of tokenization, you know, to go to products that consumers, retail investors interact with and they understand, you know, like stocks. Um I think it's interesting to see like, you know, what the end value propositions, you know, end up being. I know we've debated on the show of like, you know, is it 247? How much does that matter? Is it collateral mobility? Now you've got
[31:56] Robin Hood chain, you know, can you be able to to lock up a tokenized stock and be able to borrow against it? And how is that going to work? Um, but I I think it's just it's very hard for anyone in the asset management business that cares about the future next generation millennial kind of Gen Z customers to not watch Robin Hood and say, "Okay, they're they're moving the space in a certain direction. What is your plan of if tokenized stocks you know become a thing if you know people could access
[32:27] them there and you know they're accessing traditional um you know equities through your brokerage like how are you going to adapt to those technologies and uh I I think it's going to lead to a lot of innovation in the space >> totally agree look the the attention is always great I think the u the thoughtfulness about what comes next is important you know we put in the we put in the rails and then you you start to bring in kind of the more the more interesting stuff, right? So, 24/7, I think, you know, that's the that's a thing that people care about. It enables certain other functionalities like
[32:58] lending markets, um, which I think we're all looking at. You can start to build utility on top of these things in a way that you can't, um, with traditional rails. I think that's just a factual statement. The asset management industry, it gets super interesting. You know, we, you know, we enable 247 already. I think you know that's um obviously in D5 markets on synthetics you have uh 24/7 markets that's super interesting um we did an index with S&P last year that's a multi-asset index this is something that's very difficult
[33:28] to deploy um as an ETF for example so um in this case this is a a mix of equities and and crypto majors and an end user buys a single token and then with that token they're direct indexing into the constituents of that index right this is not something that is easy to do in in a traditional setting. But once you kind of start to put all these securities on a blockchain, uh then you get into these interesting um these interesting asset management products that you can start to deploy. I think we'll see a lot more
[33:59] than that. My my long-term expectation is that this, you know, it it benefits retail, but not in the way that like most customers are going to know, oh yes, I am buying a tokenized stock unless they're explicitly seeking out a synthetic token. Um, I think where we're going to really see something interesting is when, and we see this with our customers, our, you know, our NeoBank end users, they don't they don't think about this in terms of tokenized versus non-tokenized. They think I get access to something at the same, you
[34:29] know, kind of the same trade execution and the same benefits as I would if I was sitting in the US, right? What I expect is that we will have a huge class of consumers that are getting to make their savings and their investments more productive without ever having to understand the nuts and bolts of how that works. Just like most people right now don't have a clear understanding of how securities clearing and settlement works, right? Like we don't really like the most most people don't really want
[34:59] to know maybe present company excluded >> pres to know how the sausage is made right they want to know that it's that that it's safe that they get what they think they're getting um that they have you know certain expectations of the regulatory framework or you know compliance or is it insured and all this type of stuff. Um but you know we want to we want to help them make their portfolios more productive. I think that would be the I think that's the ultimate long-term play here. >> There's a couple of points that stand out to me here, which is one um the
[35:31] large financial institutions rarely move until a market gets big, which is a giant opportunity for disruptors, but it's often folks like Robin Hood that make the market big in in the first place. So getting into uh stable coins, getting into uh kind of uh whatever the early product was, maybe it was um no fee stock trading, you see the incumbent start to copy paste the innovation 5 to 10 years later uh when the market's already big, by which point Robin Hood has captured a meaningful portion kind
[36:02] of of that market share. The other side of it is I've spoken to three neo banks this week who all said we're looking at stable coins and tokenization as a different way of going crossborder. So if I'm a domestic US business primarily and that is my focus suddenly I have an international expansion possibility that just wasn't there before and if you look at the nature of where Robin Hood is positioning its tokenization um platform a lot of it is about that international expansion. So with their 27 million
[36:33] customers, the vast majority of those are domestic to the US, but they are now growing in market share in the UK and pushing throughout Europe and throughout the world. And so that default global possibility for US capital markets and for US businesses, I think is is such an interesting trend. So we'll we'll keep paying attention to this one for sure. Uh the last story I'm going to cover this week is um the SEC proposing new crypto offering rules. Um, so this regulation for crypto assets, will we call it regier, um, is tailoring is a
[37:05] tailored offering regime, uh, with a 60-day comment period in front of us. So, we'll see what it looks like after comment. The idea here is that startups can raise uh 5 million exempt from Securities Act registration for four years and larger raises get up to $75 million for one year. And the key part is this. Safe Harbor lets a digital asset stop being a security once the issuer has ceased all managerial assets unpacked. I could do an ICO. I could
[37:36] launch a decentralized network. Then when the network is running fully decentralized and I've completely stepped away, um the token stops being a security. And so this isn't an entrance step for like token launches as uh as we don't yet have the clarity act uh approved. This also came uh just a day before there was a big sort of white house press session with uh CFTC chair Michael Celig talking about looking to
[38:06] bring hyperlquid to the US. Um and we'll see kind of kind of a lot more happening there. Uh Anna, your thoughts on this and and on securities offerings for small cap uh here. It seems a little bit like reggae to me if uh if you're familiar with that one. >> Yeah. Yeah. I I think that's a I think that's an appropriate analogy to draw. Um it's it's interesting. I I see the logic for it. I see, you know, I it's it's nice that such a thing um nice that such a thing exists. Um I don't what I'm
[38:37] very curious to see is like what the uptake is for something like this. Um, you know, I've had conversations in the past of of, you know, people ask me like, well, why why aren't people just doing, you know, a token IPO or right, like an ICO instead of doing an equity a traditional markets equity IPO? And, you know, you go I I'm not a public company, but you go where the liquidity is, right? Like the the way these markets work, right? You you go to it's like, you know, we're going to the biggest pool of water that we can find, right?
[39:07] Um so I'm very curious how what the uptake is and what that looks like um going forward. Um I think you know our industry moves very quickly as we I think all have experienced um over the last several years. I could I guess I could comment more on the policy side but my my curiosity is what impact does it actually have on companies in the industry and how does that affect company structures? How does it affect liquidity for for the the tokens or you know the de facto equity of of newer companies and whether it makes
[39:38] meaningful changes in innovation or not um would be that's kind of my interest area in in this particular piece of news. I think the the team at Figure had tried this and at least Mike Kagny has talked about this again and again, right? Um uh but I I I do think liquidity has always been the issue in even in the earlier as well as the later stages, but I think they've been playing around with with figure stock and now now that they're public, >> but is is it the idea like correct me if I'm muring this that you could launch a
[40:10] token that wouldn't be a security or you it would start as a security and that would not it would migrate to not being a security over time. So it feels like the the biggest need is to have it be able to to be in the crypto ecosystem be traded on unis swap like in the earlier days. Uh and that's where like most people have gone down the route of you know these governance tokens which I think we've seen for years in crypto because people didn't want to have
[40:40] something that was a security they'd have to try and construct a token that didn't actually add that much value of what you could do with it. Yeah. >> So, it'd be great if there was some way to have a token that benefited from the liquidity in the crypto ecosystem that also had some, you know, way to legally issue it with some rights and guarantees to a holder. Um, but it's a sub hard problem to solve. So, I'm really interested of how the combination of clarity, what happens there with rulemaking will play out and if it's
[41:11] possible to to find that that balance. Freddie, I also think about um the push for for 247 here with tokens. Um the you probably I don't know if you were following yesterday the the press with um the CFTC and and uh the Trump administration and and kind of some of the crypto CEOs. Uh what what are your thoughts on kind of the broader moves for uh this push towards tokenization enabling 24/7 and how do you think about that as somebody with sort of Fed master access but also a global perspective?
[41:43] Yeah, I think so. So, I think of course I I agree with all of this. I think the only the only I think kind of like unobvious point I can make is that sometimes um I I do think we understate the capabilities of the existing rails a bit, right? So, for example, like like now we've been building this bank, I'm looking at some of the rails like even something like like Fed Wire, right? Like Fed Wire clears 22 hours a day. It's like pretty pretty good. Like usually when you have these like crazy
[42:13] bank cut off times at 3 p.m. um and after which you they have to wait till the next day that pain people like usually that that's not the rail itself not the infrastructure itself but kind of like the correspondent banking stack that's that's wrapped around it. Um and so sometimes I I I do feel that um we have to like be a bit more intellectually honest like what is actually like a technology limitation infrastructure limitation that can be solved by a blockchain right or any like frontier technology effort and what is actually like a like a social organizational limitation that we've
[42:43] been building um that that we've been building around because like I think without that analysis like we'll be running towards the wrong solutions um and all of that being said like for example February doesn't clear on the weekends and so there's things to be done here for sure even on an inferent technology point of view. Um but I think that's sometimes like a bit of an intrusive thought I have like where the analysis at at times like lacks a bit I think. No, it's fair. I I've seen a number of um smaller and midsized financial institutions looking
[43:13] at how they can deploy either a private blockchain or a privacy zone on Tempo or something like that. We've had numerous conversations of like this is a subleddger to your GL. it just happens to operate 24/7 and it could handle your tokenized deposits. It could handle your uh stable coins. It makes you sort of operate 24/7. You then need a 24/7 operating model. You then need to manage compliance and risk 24/7. So again, even when you move uh inside the organization
[43:43] and you solve the technology bottleneck, there's a whole other of nontechnology bottlenecks that that start to emerge. And so building an organization that's capable of that is is also another thing. But I think like an attractive thought here is that I do think that intelligence makes a difference here, right? And I do think that AI can enable organizations um to be more 24/7 even from an organizational point of view, right? Like let's say once the technology and the infra is fixed um I do think AI gives us a much better shot at then like pulling back also the
[44:13] organizational layer where um things can run around the clock without humans have to having to run around all the time as well, right? And so I think um there are new avenues to this on both these dimensions. But I I do think it cannot only be the the infrastructure layer which is solved by the stable coin. It's an interesting point of like what are ways that banks can use AI you safely and securely but to enable them to operate on a more 24/7 manner. But then there's also the question of if you believe we'll be in a world where there
[44:45] will be intelligent agents that are making decisions around how money moves in the future, it's hard to imagine that that's going to work on infrastructure that isn't 24/7. Uh and so if you're building for agents and you want to have a bank stack, you know, that is futurep proof for the next five to 10 years. Yeah. It it feels like that's just like another pull to say like it's got to be more flexible. You know, it's got to work, you know, more often than than what the the current stack, you know,
[45:16] does right now. And nobody knows exactly when and how that that's going to play out. But it's I think that's another forcing function for this era of 24/7 money. Yeah, you kind of need to become more multi- rail, don't you? You like you need to support a little bit of everything. I guess that's what you're doing, F. >> Yeah, I I I do think like that 10 years from now, every major correspondent bank or peering bank will support stable coin rails, right? Maybe even 5 years from now. And I I I also think it's not the case today. So someone like Augustus can lead the market by being both a bank and stable coin native. But I think like 5
[45:46] to 10 years, these things will absolutely converge, right? And will just be another rail. I do think also like that kind of is like I think there's like a heretic thought somewhere there were like separate instant Europe is like 24/7 right um like like what does that do to our heads and like like I tend to like at this point believe it's more the operational side that limits like round the clock round the clock availability than it actually is like the payment infrastructure >> usually the case um the stable coins are a useful stalking horse for a lot of
[46:16] this stuff um but uh but it but it' be interesting and Anna any final thoughts on on this story or our stories today. >> Yeah. No, just to your point, um it's uh we deal with a lot of institutions um as well. You know, everyone like kind of as you might imagine, everybody's interested in in tokenization and stable coins. People are trying to figure out what to do with it. Um I think the thing that we see is that it's much easier to adopt when it is something that works either alongside or on top of layered
[46:47] onto your existing infrastructure. You know, I I think there's this uh maybe sometimes it's just like of course it's like hype and whatever, you know, this idea that you just have to like throw everything out and put it on a blockchain. You don't have to throw out all of your infrastructure in order to capitalize on technological advancements. You know, you can layer it on top. That's that's how we've built our business is, you know, you can you can be a broker dealer or a neo bank or, you know, a any kind of fintech and you can just layer this on top of your, you know, existing operations and it'll work
[47:17] alongside that and it'll work nicely with that. Um and I think you know if you in in our experience if you kind of put those two things together there's a lot more willingness uh to adopt and to view it as uh as a complimentary expansion of your business as opposed to a um a frightening thing that you have to throw out all your existing infrastructure for. >> I'm going to call this last segment intellectual honesty corner. Um and uh I I really dig it. I think that's what we try and do at tokenized is we try and
[47:47] get to the the most recent truth we possibly can. Um there's a bunch of stories we didn't have time to cover this week. So RAIN launched their agentic payments alliance. Um so be interested to see uh what happens with that one. And Kraken are bringing US stock trading to the European economic area customers. Very near and dear to your heart at Denori I'm sure. Um I want to thank everybody for watching and listening. Um really really appreciate it. Um, if you want to learn more about how tokenizing stocks, we did have a great interview with Johan Kabat, the head of crypto at Robin Hood a few weeks
[48:18] back. So, search for that on the podcast players or on YouTube um to get the inside track on what Robin Hood's doing on chain. Um, and Anna, if people are interested in dinari and they want to learn more, uh, how do how do they get a hold of you and how do they do that? >> Yeah, follow us on X. We're at dinari global. Um, check out our website dinari.com. I know that's a very web two way of thinking about things, but we have a lot of people looking at that. Um, and follow along with what we're doing. DM us. Uh, we're we're always very keen to make, you know, new connections, meet new people, answer
[48:48] questions. Um, I think this is people are onboarding a lot of information very quickly um on tokenization, but I think this is an area where um there are still a lot of questions about how it works, what it means, what the different models are, and we're very happy to engage with those. >> 100%. 30. Yeah. No. Awesome. Thanks for listening, guys. If you're like an international fintech international bank that wants to access direct dollar clearing, you can find us at augustus.com. >> Kai on X at Kai Sheffield
[49:19] visa.com/crypto. >> You'll find me and all the socials at sytail screaming into the void atfintbrainfood.com and of course at tempo.xyz. And you'll find a lot more of this show if you like, subscribe, leave reviews. I'm always going to say this to you because it's the way you thank us. Uh it's the way if you've enjoyed any of the content uh you thank us by just leaving that review and uh if you do you'll hear a lot more from us. Take care and we'll catch you next time.