Stablecoin Payments Hit $50 Trillion Beating Visa and MasterCard Combined

Tedd Huff: 00:00:00

Here on the floor at FinTech Nerd Con in Miami, annual

Tedd Huff: 00:00:04

volumes that are exceeding Visa, MasterCard combined together,

Keith VanderLeast: 00:00:08

total volume is about 20 billion.

Tedd Huff: 00:00:10

The end of October, we were seeing reports of anywhere

Tedd Huff: 00:00:13

from $46 trillion to $50 trillion.

Keith VanderLeast: 00:00:17

We're trusting them.

Keith VanderLeast: 00:00:18

That they're not taking any funds from bad actors.

Tedd Huff: 00:00:22

Last month we went from a volatility score of 60%

Tedd Huff: 00:00:25

to 40% and then back up to 80%.

Tedd Huff: 00:00:27

You take a hundred dollars bill.

Keith VanderLeast: 00:00:29

There's no way that you can see every single

Keith VanderLeast: 00:00:32

physical wallet that that had been in since it was printed at the Fed.

Tedd Huff: 00:00:35

They have made a bunch of announcements about.

Tedd Huff: 00:00:39

Supporting stable coins.

Tedd Huff: 00:00:41

Settling stable coins, moving stable coins.

Tedd Huff: 00:00:44

Adding payouts to digital asset wallets is the next logical

Tedd Huff: 00:00:49

evolution of the networks.

Tedd Huff: 00:00:51

The tokenization of real world assets is the next frontier.

Keith VanderLeast: 00:00:56

You know, I hate to say it, you

Tedd Huff: 00:01:00

welcome to FinTech Confidential, bringing you the

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people, tech and companies that change how you pay and get paid.

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2025 has really seemed to be this year of stable coins.

Tedd Huff: 00:02:34

You've got.

Tedd Huff: 00:02:35

Annual volumes that are exceeding Visa, MasterCard combined together.

Tedd Huff: 00:02:39

You've got tons and tons of banks and other folks that are starting

Tedd Huff: 00:02:43

to get really interested into it.

Tedd Huff: 00:02:46

We had the Genius Act pass at the beginning of the year.

Tedd Huff: 00:02:48

There's just so much momentum around this.

Tedd Huff: 00:02:51

For those of you who don't know, I am the CEO.

Tedd Huff: 00:02:54

I am founder of a advisory firm called voler, and we are recording Web3 with

Tedd Huff: 00:03:00

FTC by FinTech Confidential here on the floor at FinTech Nerd Con in Miami.

Tedd Huff: 00:03:06

This has been a lot of fun.

Tedd Huff: 00:03:08

Keith, welcome to the show.

Keith VanderLeast: 00:03:10

Yeah, it's good to be here.

Keith VanderLeast: 00:03:12

I'm glad we're in Miami.

Keith VanderLeast: 00:03:13

It's nice to have a break from Vegas.

Keith VanderLeast: 00:03:15

It's also nice to be in some warm weather versus the cold that's up in

Keith VanderLeast: 00:03:19

New York and New Jersey where I'm from.

Tedd Huff: 00:03:21

It has already started to cool up there.

Tedd Huff: 00:03:23

Yeah, so folks, Keith has been in the FinTech game for quite some time.

Tedd Huff: 00:03:27

He's made stops at First Data American Express right before becoming

Tedd Huff: 00:03:32

the GM for North America at BVNK.

Tedd Huff: 00:03:35

He stopped at Cross River for a little bit of a beat and headed up all the

Tedd Huff: 00:03:40

payments and everything over there.

Tedd Huff: 00:03:41

So it is been really cool to see that.

Tedd Huff: 00:03:44

Keith, what I wanted to start off with, we don't have a whole lot of time,

Tedd Huff: 00:03:47

so I'm gonna just dive straight in.

Tedd Huff: 00:03:48

Yeah, let's do

Keith VanderLeast: 00:03:48

it.

Tedd Huff: 00:03:49

What was it?

Tedd Huff: 00:03:50

Looking from the traditional payments, banking fee outside of the house.

Tedd Huff: 00:03:57

That really got you intrigued and interested to make the move,

Tedd Huff: 00:04:01

make the jump over to BB and K.

Keith VanderLeast: 00:04:03

The one employer that you didn't mention

Keith VanderLeast: 00:04:05

payments related was Western Union.

Keith VanderLeast: 00:04:08

I started my payments group, yes.

Keith VanderLeast: 00:04:09

Western Union.

Keith VanderLeast: 00:04:10

When?

Keith VanderLeast: 00:04:10

When First Data used to own them.

Keith VanderLeast: 00:04:12

That was my first exposure to payments, but also my first

Keith VanderLeast: 00:04:15

exposure to cross border payments.

Keith VanderLeast: 00:04:17

I've done a lot of different things in payments, as you mentioned.

Keith VanderLeast: 00:04:20

Most recently when I was at Crossover, we were doing a ton

Keith VanderLeast: 00:04:23

of RTP Fed now, so instant.

Keith VanderLeast: 00:04:26

24 7 payments.

Keith VanderLeast: 00:04:28

Then we were also supporting a lot of Staple point infrastructure

Keith VanderLeast: 00:04:33

providers who were coming in and maybe circle specifically.

Keith VanderLeast: 00:04:38

We worked with them a lot as one of our clients.

Keith VanderLeast: 00:04:41

We provided them an FBO account and just seeing what they were

Keith VanderLeast: 00:04:45

doing in this space and the potential that stable coins had for.

Keith VanderLeast: 00:04:51

Some of the same use cases that we were deploying with RTP Fed now, but then also

Keith VanderLeast: 00:04:58

a lot of the cross-border use cases that.

Keith VanderLeast: 00:05:01

Are a challenge.

Keith VanderLeast: 00:05:03

And despite years ago when I was at Western Union, it was a challenge.

Keith VanderLeast: 00:05:07

Despite all these years after that, it's still challenging

Keith VanderLeast: 00:05:11

to send money cross border.

Keith VanderLeast: 00:05:13

We've been in and out of crypto.

Keith VanderLeast: 00:05:14

We went to the, the FTX Bahamas Conference, the, the notorious

Keith VanderLeast: 00:05:19

FTX and SBF was on stage with Bill Clinton and, and Tony la.

Keith VanderLeast: 00:05:23

In hindsight, it was so surreal and my one takeaway from that, well, two takeaways.

Keith VanderLeast: 00:05:28

Bahamas is awesome.

Keith VanderLeast: 00:05:29

The only.

Keith VanderLeast: 00:05:30

Use case that I could wrap my head around was the, the cross-border use case.

Keith VanderLeast: 00:05:35

It wasn't calling out stablecoin specifically, but very clearly.

Keith VanderLeast: 00:05:40

In order for payments to work.

Keith VanderLeast: 00:05:41

And if you look at like the first line of the Bitcoin White paper,

Keith VanderLeast: 00:05:44

it talks about payments, right?

Keith VanderLeast: 00:05:45

Yeah.

Keith VanderLeast: 00:05:46

So that's where I, I just got really interested in stable coins through

Keith VanderLeast: 00:05:50

all of those different things.

Keith VanderLeast: 00:05:51

And when BV and K came around and said, Hey, we're going to launch in the US

Keith VanderLeast: 00:05:55

business, I really thought it was the right opportunity for payments within the

Keith VanderLeast: 00:06:00

us recognizing that there is a need for.

Keith VanderLeast: 00:06:07

Instant 24 7 cross border payments.

Keith VanderLeast: 00:06:10

Mm-hmm.

Keith VanderLeast: 00:06:10

That's what brought me to BB and K, and we've seen tremendous growth.

Keith VanderLeast: 00:06:15

We're about a third of our total volume.

Keith VanderLeast: 00:06:18

Our total volume is about 20 billion.

Keith VanderLeast: 00:06:21

The America's business makes up just about a third of that.

Tedd Huff: 00:06:23

You know, you talk about the 20 billion, if you really look at, you

Tedd Huff: 00:06:26

know, I, I overarchingly said that it, it's greater than Visa and MasterCard

Tedd Huff: 00:06:31

put together, depending on what report and how you calculate the numbers.

Tedd Huff: 00:06:36

As of the end of October, we were seeing reports of anywhere

Tedd Huff: 00:06:40

from $46 trillion to $50 trillion in money movements and stables.

Tedd Huff: 00:06:46

Everybody's arguing over how many is were bought.

Tedd Huff: 00:06:48

Manipulated versus individual transactions.

Tedd Huff: 00:06:52

Right.

Tedd Huff: 00:06:52

I think that the really cool thing that this year has shown us is that over the

Tedd Huff: 00:06:55

last two to three years, the pilots that everybody was looking at, whether it be

Tedd Huff: 00:07:00

with a traditional digital asset, which I agree, I had the same thoughts about

Tedd Huff: 00:07:05

leveraging blockchain, especially diving into Bitcoin, seemed to be the one that

Tedd Huff: 00:07:10

if we could figure out how to speed it up in a lightly network, did a lot for that.

Keith VanderLeast: 00:07:13

Yeah.

Keith VanderLeast: 00:07:13

Yeah.

Tedd Huff: 00:07:13

That was a really good piece, but the volatility has still been crazy.

Tedd Huff: 00:07:17

Last month we went from a volatility score of 60% to 40% and then back up

Tedd Huff: 00:07:22

to 80%, so it's pretty crazy with that piece of it, although it feels like

Tedd Huff: 00:07:26

we've kind of jumped out of the proof of concept land, there's still a lot of

Tedd Huff: 00:07:32

that going on, but what have been the use cases and scenarios that you've seen?

Tedd Huff: 00:07:38

That have transitioned from, let me try it to now.

Tedd Huff: 00:07:42

This is something I wanna use every day in my business.

Keith VanderLeast: 00:07:45

Yeah.

Keith VanderLeast: 00:07:45

To be fair, it's still very much in a proof of concept or pilot mode with

Keith VanderLeast: 00:07:51

many of the companies we're talking to and the use cases are so varied.

Keith VanderLeast: 00:07:57

You could talk about stablecoin payin.

Keith VanderLeast: 00:07:59

And then payouts.

Keith VanderLeast: 00:08:00

We've seen both use cases.

Keith VanderLeast: 00:08:03

The payout use case, I would say has the most traction.

Keith VanderLeast: 00:08:07

That's probably for a couple different reasons.

Keith VanderLeast: 00:08:10

One, as we're talking to banks and traditional payment companies, we

Keith VanderLeast: 00:08:15

spend a lot of time educating them on compliance and B-S-A-M-L, and obviously

Keith VanderLeast: 00:08:20

they're, they're very familiar with B-S-A-M-L, but educating them on

Keith VanderLeast: 00:08:25

what that looks like on chain, right.

Keith VanderLeast: 00:08:27

There are a lot of similarities, but there's also some differences.

Keith VanderLeast: 00:08:31

So as we talk through what you can do on chain from an A ML perspective,

Keith VanderLeast: 00:08:36

what you can monitor, they get comfortable with on chain payments,

Keith VanderLeast: 00:08:40

but they want to test payouts first.

Keith VanderLeast: 00:08:43

Stablecoin payments, they're always push payments.

Keith VanderLeast: 00:08:46

So if you're the one pushing, you have a little bit more

Keith VanderLeast: 00:08:49

control on who the recipient is.

Tedd Huff: 00:08:51

Mm-hmm.

Keith VanderLeast: 00:08:52

But we are seeing quite a few pay in use cases as

Keith VanderLeast: 00:08:55

well, like a checkout experience.

Keith VanderLeast: 00:08:58

I think that's gonna be very vertical specific.

Tedd Huff: 00:09:01

Sure.

Keith VanderLeast: 00:09:01

Most often it's a cross border.

Keith VanderLeast: 00:09:04

More often than not, it's higher ticket transactions where the cost of the

Keith VanderLeast: 00:09:10

traditional fiat payments, whether that's.

Keith VanderLeast: 00:09:12

Again, sending a a swift or a card payment is substantial to

Keith VanderLeast: 00:09:18

the point where if they've got ready access to digital assets.

Keith VanderLeast: 00:09:23

So that's the pay in on the, going back to the payout use cases, a

Keith VanderLeast: 00:09:27

lot of gig economy workers who are dispersed throughout the globe.

Keith VanderLeast: 00:09:33

You know, I think the pandemic helped us realize that you can.

Keith VanderLeast: 00:09:37

Do so many different jobs anywhere in the world.

Keith VanderLeast: 00:09:40

It's truly a global economy now, but payroll and getting paid, oftentimes

Keith VanderLeast: 00:09:46

there was still that friction point.

Keith VanderLeast: 00:09:47

Now with stable coins, you're able to pay someone anywhere in

Keith VanderLeast: 00:09:52

the world without having to go through the traditional fiat rails.

Tedd Huff: 00:09:55

A lot of the, the things that it, it sounds and feels like with

Tedd Huff: 00:09:59

BB and k is, is it's that core plumbing that just kind of moves stuff around.

Tedd Huff: 00:10:04

One of the things I thought was really interesting is the way that

Tedd Huff: 00:10:07

you all have structured things that you've, you've got the fully managed

Tedd Huff: 00:10:10

for those folks who want the benefits without all the heavy lifting.

Tedd Huff: 00:10:14

But then you've also got the, I don't know if I would call it unmanaged.

Tedd Huff: 00:10:20

Self

Keith VanderLeast: 00:10:20

self, self-managed.

Tedd Huff: 00:10:21

Self-managed, unmanaged mean a lot of ding, but yeah.

Tedd Huff: 00:10:25

But the self-managed side of the house.

Tedd Huff: 00:10:26

For those folks who have the technical acumen, they Yep.

Tedd Huff: 00:10:29

Need the ability to do all these different things.

Tedd Huff: 00:10:32

Where are you seeing the forward movement?

Tedd Huff: 00:10:36

You know, I would think it'd be on the fully managed side of the house,

Keith VanderLeast: 00:10:39

but No, you're, you're right.

Keith VanderLeast: 00:10:40

And I think the way we talk about managed versus self-managed, managed

Keith VanderLeast: 00:10:46

is the full stack Bevin K offering where we're providing the digital

Keith VanderLeast: 00:10:50

asset infrastructure, but we're also providing our fiat infrastructure,

Keith VanderLeast: 00:10:55

so that includes licenses.

Keith VanderLeast: 00:10:57

Our compliance both on chain and fiat transaction monitoring.

Keith VanderLeast: 00:11:02

It includes our where UK EMI.

Keith VanderLeast: 00:11:04

We've got a multi EMI, Spanish vast multiple MTLS bank accounts.

Keith VanderLeast: 00:11:09

So we can move in and out of fiat, across us, dollar, euro, and pound sterling.

Keith VanderLeast: 00:11:16

So that is all encompassing.

Keith VanderLeast: 00:11:18

That's our managed solution.

Keith VanderLeast: 00:11:20

And then for a regulated institution.

Keith VanderLeast: 00:11:23

There is a self-managed institution.

Keith VanderLeast: 00:11:25

They don't need us for fiat.

Keith VanderLeast: 00:11:26

They've got the licenses.

Keith VanderLeast: 00:11:28

In reality, depending on who we're talking to, even if we are talking to a

Keith VanderLeast: 00:11:35

regulated institution like a bank that doesn't need us for fiat, the reality is

Keith VanderLeast: 00:11:41

for them to move If they've never done anything on chain to move to a fully.

Keith VanderLeast: 00:11:46

Managed solution or self-managed by the bank.

Keith VanderLeast: 00:11:49

That's a giant leap because you need to build up this expertise, this

Keith VanderLeast: 00:11:54

on chain expertise across all the variety of different risk functions.

Tedd Huff: 00:11:57

What,

Keith VanderLeast: 00:11:58

what do you think is the biggest

Tedd Huff: 00:11:59

gap that you see happening when someone says, I'm ready to

Tedd Huff: 00:12:02

go, self-managed, I'm regulated.

Tedd Huff: 00:12:05

I know what I'm doing when it comes to A-M-L-B-S-A, I

Tedd Huff: 00:12:08

know how to make money move.

Tedd Huff: 00:12:09

I know the transaction.

Tedd Huff: 00:12:11

Like, wait,

Keith VanderLeast: 00:12:11

you, you talk about key storage and they're like, what?

Keith VanderLeast: 00:12:14

Like what's that?

Keith VanderLeast: 00:12:15

Like?

Keith VanderLeast: 00:12:15

Or you talk about, alright, who's going to provide your liquidity?

Keith VanderLeast: 00:12:19

Right?

Keith VanderLeast: 00:12:20

Where's your trading desk?

Keith VanderLeast: 00:12:21

What about chain analysis or TRM labs?

Keith VanderLeast: 00:12:23

And they're like, who's that?

Keith VanderLeast: 00:12:24

Like, and, and then I think a ML, I would say is the biggest point of.

Keith VanderLeast: 00:12:30

Uh, not friction, but the biggest point of education.

Tedd Huff: 00:12:33

How would that be different than what they're already

Tedd Huff: 00:12:35

doing today for their, their

Keith VanderLeast: 00:12:36

tradition?

Keith VanderLeast: 00:12:36

So, for fi, so for fiat, so the comparison that we like to use is

Keith VanderLeast: 00:12:41

you take a hundred dollars bill, there's no way, there's no website.

Keith VanderLeast: 00:12:45

You can go and look up that serial number of that a hundred dollars bill and see

Keith VanderLeast: 00:12:49

every single physical wallet that that had been in since it was printed at the Fed.

Keith VanderLeast: 00:12:53

Right.

Keith VanderLeast: 00:12:54

Well, with on chain.

Keith VanderLeast: 00:12:56

Analytics, you can do that, right?

Keith VanderLeast: 00:12:58

You can see the wallet that held that digital asset, and then you

Keith VanderLeast: 00:13:03

can also monitor it as it leaves.

Keith VanderLeast: 00:13:06

You know, you're no longer the custodian.

Keith VanderLeast: 00:13:07

It goes to your customer wallet, to your customer's customers

Keith VanderLeast: 00:13:10

wallet to your customer's customer, and you can monitor it.

Keith VanderLeast: 00:13:13

Both, all the, the hops it took before it came into your possession, and then

Keith VanderLeast: 00:13:18

all you can do ongoing monitoring.

Keith VanderLeast: 00:13:20

It takes, makes me

Tedd Huff: 00:13:21

a little

Tedd Huff: 00:13:21

bit,

Tedd Huff: 00:13:21

thinks back.

Tedd Huff: 00:13:22

Think back to the comment that I've made over and over and over again.

Tedd Huff: 00:13:25

I mean, I, I've been in the digital asset space since 2013.

Tedd Huff: 00:13:28

The point that I was really making it's immutable record.

Keith VanderLeast: 00:13:31

Yes,

Tedd Huff: 00:13:31

yes.

Tedd Huff: 00:13:31

Which means that, that if you're doing something wrong and you're

Tedd Huff: 00:13:34

being nefarious in some way, it's not a matter of if you get caught, it's

Tedd Huff: 00:13:39

when they figure out who you are.

Tedd Huff: 00:13:41

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Keith VanderLeast: 00:14:44

You know, I hate to say it, but like in the fiat world, trust

Keith VanderLeast: 00:14:47

is very important in both worlds, but the idea is like, take correspondent banking.

Keith VanderLeast: 00:14:52

You're trusting the other bank, right?

Keith VanderLeast: 00:14:54

Yeah.

Keith VanderLeast: 00:14:54

You've got their Wolfsberg questionnaire.

Keith VanderLeast: 00:14:56

It's like, all right, we're trusting them that they're not

Keith VanderLeast: 00:15:00

taking any funds from bad actors.

Keith VanderLeast: 00:15:02

Right.

Keith VanderLeast: 00:15:03

That.

Keith VanderLeast: 00:15:04

Idea, you don't necessarily need to have as much trust in on Campaign

Tedd Huff: 00:15:10

as, as you talk about trust, the place that, that brings me to that,

Tedd Huff: 00:15:13

at least in North America, there's a huge level of trust in Visa and in

Tedd Huff: 00:15:18

MasterCard, and they have made a bunch of announcements about supporting.

Tedd Huff: 00:15:24

Stable coins, settling stable coins, moving stable coins, participating

Tedd Huff: 00:15:30

for part of their ag agentic commerce piece of the house.

Tedd Huff: 00:15:33

I would love to get your perspective on what that actually means in

Tedd Huff: 00:15:38

the overarching market context.

Tedd Huff: 00:15:40

And I may throw in a couple little ones in there.

Tedd Huff: 00:15:42

Yeah,

Keith VanderLeast: 00:15:43

it's another payment rail.

Keith VanderLeast: 00:15:44

There's been initiatives around open banking and working with the traditional

Keith VanderLeast: 00:15:51

fiat rails that both networks have.

Keith VanderLeast: 00:15:53

Looked at through different acquisitions of different initiatives, and

Keith VanderLeast: 00:15:57

then I think stable coins, both.

Keith VanderLeast: 00:15:59

Both networks have been testing stablecoin payments for.

Keith VanderLeast: 00:16:02

Quite some time.

Keith VanderLeast: 00:16:03

They've been able to do a lot more outside of the US given what

Keith VanderLeast: 00:16:08

the regulatory environment was.

Keith VanderLeast: 00:16:10

If you think about both issuing and acquiring, settling on chain

Keith VanderLeast: 00:16:14

transactions to issuers and acquirers, that has been happening

Keith VanderLeast: 00:16:18

in Europe for a couple years now.

Keith VanderLeast: 00:16:22

I don't

Tedd Huff: 00:16:22

think a lot of people realize that though.

Keith VanderLeast: 00:16:23

Yeah, no.

Keith VanderLeast: 00:16:24

You look at the press releases, I think Visa was 20 23, 20 22,

Keith VanderLeast: 00:16:29

and and MasterCard similar and.

Keith VanderLeast: 00:16:31

Really cool use cases whereby on the issuing side, the issuer can settle 24 7.

Keith VanderLeast: 00:16:40

You know, they don't have to post collateral, which is a

Keith VanderLeast: 00:16:43

sometimes a challenge, right?

Keith VanderLeast: 00:16:45

Mm-hmm.

Keith VanderLeast: 00:16:45

The cost of funds can, can start to increase for these issuers.

Keith VanderLeast: 00:16:49

So, you know, settling on chain, because it's 24 7, you don't have to

Keith VanderLeast: 00:16:53

worry about that collateral, right?

Keith VanderLeast: 00:16:55

So there's the issuing flow, and then on the acquiring side, it's.

Keith VanderLeast: 00:16:59

Getting the funds to a merchant faster.

Keith VanderLeast: 00:17:01

You mentioned I started my payments, or I spent some time at At First Data,

Keith VanderLeast: 00:17:05

and that was always a pain point.

Keith VanderLeast: 00:17:07

Getting merchants their funds faster and getting to that t plus zero settlement.

Keith VanderLeast: 00:17:12

Right?

Keith VanderLeast: 00:17:12

Think about cash, like if I am a buyer and you're the seller, I give you cash.

Keith VanderLeast: 00:17:18

You have that cash right away, plus this one realtime payment.

Keith VanderLeast: 00:17:20

Give Yeah, I know.

Keith VanderLeast: 00:17:22

Realtime paper, right?

Keith VanderLeast: 00:17:23

If I give you a card.

Keith VanderLeast: 00:17:25

And it's a Saturday, you're not getting those funds

Keith VanderLeast: 00:17:27

oftentimes till Tuesday, right?

Tedd Huff: 00:17:29

You're getting promised

Keith VanderLeast: 00:17:30

Yes.

Tedd Huff: 00:17:30

The funds,

Keith VanderLeast: 00:17:30

yes.

Keith VanderLeast: 00:17:31

Yes.

Keith VanderLeast: 00:17:31

Yeah.

Keith VanderLeast: 00:17:31

It's, it's, there's certainty, right?

Keith VanderLeast: 00:17:34

Unless they issue a chargeback, but, so on the acquiring side, that's

Keith VanderLeast: 00:17:38

another use case for, for stablecoin payments settling 24 7 on the weekends.

Tedd Huff: 00:17:43

What do you see it look like with, with the card brands and

Tedd Huff: 00:17:46

stables, just in say the next 12 months?

Keith VanderLeast: 00:17:49

The most obvious place for them to start

Keith VanderLeast: 00:17:54

to do more with stable coins.

Keith VanderLeast: 00:17:56

I, I talked about issuing, acquiring, but more specifically

Keith VanderLeast: 00:17:58

on their money movement products.

Keith VanderLeast: 00:18:00

Mm-hmm.

Keith VanderLeast: 00:18:00

Visa Direct and MasterCard move.

Keith VanderLeast: 00:18:03

Right.

Keith VanderLeast: 00:18:04

Both networks have done a lot of work to expand.

Keith VanderLeast: 00:18:07

The payout tools first it was, you know, visa direct MasterCard, send push to card.

Keith VanderLeast: 00:18:13

Right?

Keith VanderLeast: 00:18:13

Push to debit like an OECT original credit transaction.

Keith VanderLeast: 00:18:17

Right?

Keith VanderLeast: 00:18:17

That's what OCT stands for.

Keith VanderLeast: 00:18:19

Then they added pay to bank, right?

Keith VanderLeast: 00:18:21

And then they added pay to wallet, not digital wallet, but Fiat Wallet.

Keith VanderLeast: 00:18:25

Pay to uh uh, Venmo, PayPal Wallet pay to a WeChat Pay wallet, right?

Keith VanderLeast: 00:18:30

Adding payouts to digital asset wallets is the next logical

Keith VanderLeast: 00:18:35

evolution of the networks.

Keith VanderLeast: 00:18:37

So they'll add that.

Keith VanderLeast: 00:18:39

They'll add pay to wallet.

Keith VanderLeast: 00:18:40

You know, we talked about the pain point in issuing pre-funding.

Keith VanderLeast: 00:18:44

You think about a Visa direct push to card transaction.

Keith VanderLeast: 00:18:48

It's the same flow.

Keith VanderLeast: 00:18:49

In this case, the acquirer needs to pay visa, right?

Keith VanderLeast: 00:18:52

That's the opposite of the traditional merchant acquiring flow.

Keith VanderLeast: 00:18:54

But if you're doing a lot of OCTs, your OCTs outweigh the, the poll payments, the

Keith VanderLeast: 00:19:00

AFTs or the traditional card purchases, then you're sending money to Visa.

Keith VanderLeast: 00:19:05

And if you have a lot of volume on the weekends, you have to post collateral.

Keith VanderLeast: 00:19:09

You have to pre-fund an account.

Keith VanderLeast: 00:19:11

Yeah.

Keith VanderLeast: 00:19:11

At your sponsor bank.

Keith VanderLeast: 00:19:12

And that again, has a potential material cost We've talked to,

Keith VanderLeast: 00:19:16

to fintechs and programs where.

Keith VanderLeast: 00:19:19

They're having to go get a line of credit or a loan just to

Keith VanderLeast: 00:19:22

pre-fund for these payment flows.

Keith VanderLeast: 00:19:24

Well, if you can pre-fund with stable coins, you can pre-fund on a Saturday

Keith VanderLeast: 00:19:30

and a Sunday and any other bank holiday.

Tedd Huff: 00:19:32

So we've, we've talked about a bunch of different things, but

Tedd Huff: 00:19:34

one of that I'm curious is we're the surprise areas that you're like, I didn't

Tedd Huff: 00:19:41

think that this vertical was going to.

Tedd Huff: 00:19:46

Grab onto this and decide that, Hey, I wanna use stable coins

Tedd Huff: 00:19:51

for this part of my business.

Tedd Huff: 00:19:52

That's kind of surprised you.

Keith VanderLeast: 00:19:53

I started my payments career with Western Union, so coming into

Keith VanderLeast: 00:19:56

the space, I knew like, okay, dollars going to the global south, going to

Keith VanderLeast: 00:20:01

Mexico, getting paid out stable coins.

Keith VanderLeast: 00:20:04

That seems obvious and, and there's a lot of clients who are doing that.

Keith VanderLeast: 00:20:08

What I was surprised about was how much of the reverse flow we're seeing whereby.

Keith VanderLeast: 00:20:15

It's a manufacturer in somewhere in Latin America who has a supplier in the us.

Keith VanderLeast: 00:20:23

The manufacturer in Latin America wants to pay in stable coins.

Keith VanderLeast: 00:20:26

Obviously the US supplier wants to receive dollars, so we're seeing a lot

Keith VanderLeast: 00:20:32

of taking in stable coins, converting that into US dollars and paying out

Keith VanderLeast: 00:20:37

via the traditional, the payment rails.

Tedd Huff: 00:20:39

That, that's really interesting.

Tedd Huff: 00:20:40

The, the reverse.

Tedd Huff: 00:20:41

Yeah.

Tedd Huff: 00:20:41

Yeah.

Tedd Huff: 00:20:41

Because you don't hear a lot

Keith VanderLeast: 00:20:43

of that happening.

Keith VanderLeast: 00:20:43

No, no.

Keith VanderLeast: 00:20:43

I, that was.

Keith VanderLeast: 00:20:44

Somewhat shocking to me, but it is a pretty substantial part of our volume.

Tedd Huff: 00:20:50

Well, Keith, I left my crystal ball at home, so we're just

Tedd Huff: 00:20:53

gonna have to imagine that there's a crystal ball sitting here on the counter.

Tedd Huff: 00:20:57

If you were to look into the said crystal ball and say, this is what I see going on

Tedd Huff: 00:21:05

in stables and with BB and K, and then next 12 months, and we landed

Tedd Huff: 00:21:10

at FinTech Nerd Con next year.

Tedd Huff: 00:21:13

What are the things that we would be talking about at that time?

Keith VanderLeast: 00:21:16

A year in some regards is a long time.

Keith VanderLeast: 00:21:19

I think we'll see.

Keith VanderLeast: 00:21:21

I mean, we already are seeing a lot of interest from banks and whether that's

Keith VanderLeast: 00:21:25

stable coins or we're getting a lot of questions about tokenized deposits.

Keith VanderLeast: 00:21:30

Mm-hmm.

Keith VanderLeast: 00:21:30

We think there's a lot of open questions around the interplay between

Keith VanderLeast: 00:21:33

tokenized deposits and stable coins.

Keith VanderLeast: 00:21:37

Obviously stable coins have much more volume outside of

Keith VanderLeast: 00:21:39

the JPM coin and I don't.

Keith VanderLeast: 00:21:41

No, the, the volume of JPM coin, and I think they announced that they're just

Keith VanderLeast: 00:21:45

gonna open that up to a public blockchain, so it'll be a little bit more open.

Keith VanderLeast: 00:21:50

But besides JP Morgan, a few of the other larger banks have been

Keith VanderLeast: 00:21:53

testing tokenized deposits in a closed loop permissioned blockchain.

Keith VanderLeast: 00:21:58

They need to open up other banks, whether it's a consortium or other models, putting

Keith VanderLeast: 00:22:05

their deposits on chain for payments use cases, and then the interoperability

Keith VanderLeast: 00:22:10

between those tokenized deposits and stablecoin that needs to be solved.

Keith VanderLeast: 00:22:15

And I think BB and k as well positioned to, to do that from a use case

Keith VanderLeast: 00:22:19

perspective, you know, we talk about the, the five characteristics of stable coins

Keith VanderLeast: 00:22:24

we already mentioned 24 7 an instant.

Keith VanderLeast: 00:22:26

We talked about global, we've talked about the transparency.

Keith VanderLeast: 00:22:30

There's not specific use cases tied to transparency, but it's all around

Keith VanderLeast: 00:22:34

B-S-A-A-M-L transaction monitoring.

Keith VanderLeast: 00:22:36

And it's about what you can do on chain that you can't do in the fiat world.

Keith VanderLeast: 00:22:41

And then the fifth characteristic is the program ability of digital assets.

Keith VanderLeast: 00:22:47

That's where I'm really excited to see.

Keith VanderLeast: 00:22:50

New use cases come out.

Keith VanderLeast: 00:22:52

I think we're just scratching the surface there.

Keith VanderLeast: 00:22:55

I think a lot of it is going to be tied to escrow for lending type situations.

Keith VanderLeast: 00:23:03

I'm not super close to all the different lending requirements, but I

Keith VanderLeast: 00:23:08

do think there's, there's opportunity there for the combination of smart

Keith VanderLeast: 00:23:13

contracts and stablecoin payments to really provide a lot of value.

Tedd Huff: 00:23:18

I appreciate hearing your perspective.

Tedd Huff: 00:23:20

Just today I saw a post about the president of Citi talking about how

Tedd Huff: 00:23:26

she feels that the tokenization of real world assets is the next frontier for

Tedd Huff: 00:23:32

her and others in the banking community.

Tedd Huff: 00:23:34

So it'll be really interesting to see how all that plays out.

Tedd Huff: 00:23:37

I know it's been a really big piece.

Tedd Huff: 00:23:39

And a number of groups that I work with, so that is, is really cool.

Tedd Huff: 00:23:43

Keith, we, we are out of time today.

Tedd Huff: 00:23:45

We could probably talk about this for a lot, lot longer, but I

Tedd Huff: 00:23:48

appreciate you, you coming by just the way that the market is changing.

Tedd Huff: 00:23:54

It's really helpful to hear and understand how BB and K is

Tedd Huff: 00:23:57

supporting that piece of it.

Tedd Huff: 00:23:58

Yeah.

Keith VanderLeast: 00:23:58

Thanks for having me.

Keith VanderLeast: 00:23:59

Thanks to Galileo for sponsoring it.

Tedd Huff: 00:24:01

Glad to be down here.

Keith VanderLeast: 00:24:02

Thanks, Ted.

Tedd Huff: 00:24:03

Definitely.

Tedd Huff: 00:24:03

Well, folks, if you liked what you heard and you wanna hear a little bit more of

Tedd Huff: 00:24:07

this, we're gonna go ahead and be posting this up on FinTech confidential.com.

Tedd Huff: 00:24:11

You can catch us on Spotify, YouTube, all wherever you listen to your podcasts.

Tedd Huff: 00:24:15

And as always, keep moving forward.

Tedd Huff: 00:24:19

As we wrap up today's episode, I've got one last thing for you.

Tedd Huff: 00:24:23

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Tedd Huff: 00:24:27

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