Kraken, $600 million bets for stabilization
In the 82nd edition of Tokenized, Simon Taylor, Director of Market Development, Tempo, invited Wyatt Lonergan, a regular partner of VanEck Ventures, and Mark Greenberg, Vice President of Kraken B2B, to discuss Kraken ' s new bank cashier services in 100 countries, Kraken andMoneygramCooperation
Time stamp:
00:00 Opening Introduction
1:33 Kraken and Moneygram's Global "Class to Cash" Partnership
3:21 Kraken has added cashier services in 100 countries
6:18 Informal local cash networks and currency stabilization drive their formalization
8:15 Cash withdrawals in encrypted currencyKYCWITH AML RISK
10:37 Kraken Acquisition of Reap and layout of business cards supported by stable currency
12:55 Verticalization of encrypted payment stacks and bank card economic model
25:58 Stabilized currency as the clearing track for corporate finances
31:25 Bullish Acquisition of Equiniti, layout of monetized stock infrastructure
40:12 Foreignized private credit, and chain-based asset demand
Takeaways: Kraken, Moneygram, Reap and the core logic of stable currency payment infrastructure
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The real bottleneck of the stabilizer is not "buy in," but "gold out."
The programme has repeatedly stressed that it is not difficult to exchange the United States dollar for a stable currency, which is difficult to convert into cash, bank account balances or consumer funds on the local market. Moneygram is worth half a million physical sites around the world to solve the last kilometre of gold。 -
Moneygram, Western Union, an old remittance network like this, instead of being eliminated, could be reactivated
In the past, many people thought that a stable currency would “kill” traditional money remittance companies, but the guest argued that a stable currency would address cross-border money transfers, and that Moneygram would address local distribution, cash receipts and physical networks, which would be more combined。 -
Kraken works with Moneygram, which essentially makes crypto off-ramp a global cash network
Kraken users can withdraw cash from Moneygram in over 100 countries in the future。Mark also mentioned that this was only the first step and that the next few months might be added to the bank's liquidity, from cash to bank accounts。 -
Cash remains a very important infrastructure in the global payment system
People in Western markets tend to underestimate the importance of cash. The programme mentions that there is still a high level of cash dependency in the global South, Latin America, Colombia, Argentina and even Canada. If the stable currency is to be truly universal, it must be connected to the cash network, not simply in a chain wallet。 -
The stabilization currency is formalizing an informal local cash exchange network
In many countries, streetside businesses, agents and offline cash exchange networks exist. Stable currency, Moneygram, ZarTetherSuch players are accessing more standardized and scalable infrastructure for these informal networks。 -
KYC MAY BE MORE RELIABLE THAN KYC ON THE LINE
Simon refers to the AML risk of cash, but Mark believes that physical retail outlets can check identity documents face to face, and in some cases be more reliable than purely online KYC. The compliance capacity of Kraken and Moneygram is an important foundation on which this cooperation can be built。 -
Reap Acquisition Note Kraken / Payward is moving from an exchange to a stable currency payment infrastructure company
Payward's takeover of Reap is not just buying a business card company, but is supplementing B2B payments, business cards, stabilization of currency consumption, business services. Kraken does not want to be a mere trading platform, but rather to open up his own transactions, gold deposits, borrowing, earnings, cards and capacity to pay to other enterprises。 -
It's a key scene for the exchange, the payment company, the card organization
Reap issues the Visa Enterprise Card, which is supported by stable currency and serves 22,000 enterprises in Asia. The program places it with Rain, Stripe Bridge, Mastercard BVNK, MoonPay Iron, suggesting that the stabilization card is becoming a new round of payment infrastructure mergers and purchases。 -
The payment stack is being vertically integrated, and whoever controls license plates, cards, processing and customers controls the economic model
Traditional cards require multiple layers of players such as bottom plates, issuer processor and program manager. This type of company, Rain, does the whole house, gets more intelchange and economies of scale. One of the values of Reap for Payward is the ability to bring in licences, customers and international cards。 -
STABILIZED COINS ARE NOT INTENDED TO REPLACE ALL TRADITIONAL TRACKS, BUT ARE USED WITH SWIFT, ACH, REAL-TIME PAYMENTS, LOCAL CLEARING NETWORKS
The program explicitly opposes the binary narrative of “stable currency vs traditional finance”. The future is more likely to be an intelligent route: different corridors are cut between stable currencies, SWIFT, ACH, real-time payments based on cost, speed, regulation, client preferences。 -
Corpay access to J.P. Morgan Kinexys and BVNK, indicating that large traditional payment companies have begun to accept block chains as a cross-border settlement track
This case demonstrates that the stable currency and block chain settlement is no longer merely a crypto native scenario, but rather enters S& the P500 level payment company ' s cross-border payment platform, which forms part of the multi-track payment system。 -
The future of the company's finances may be "one purse to manage global funds" rather than opening bank accounts everywhere
the presenter mentioned that businesses now need to maintain large amounts of bank accounts and pre-positioned funds globally, at high cost and low efficiency. stabilized coins and tokenized deposits allow enterprises to manage multi-field funds, risks and liquidity from a dashboard。 -
7x24 hour settlement needs will force traditional finance to accept stable coins
Traditional systems such asCLSFedwire is still restricted on weekends, but traders, businesses and capital markets are increasingly in need of weekends and holidays to settle. Stabilized currency here offers the capacity that traditional finance cannot replace in the short term。 -
at the heart of the debate about monetized stocks is whether or not to rely on transfers ant
The Bullish takeover of Equiniti triggered a discussion. Wyatt believes that a true source of authoritative registration of capital markets is a necessary bridge to legal compatibility and the involvement of large asset management agencies. Mark looks forward to a longer-term emergence of more primitive and less intermediary chain-based stock markets。 -
The monetized assets do not overwhelm traditional finance overnight, but go through the "old system plus new system bridge" phase
The guests compared tokenization of stocks to early development of stable currencies: at the outset, you would try to move the old rules all along the chain, but eventually create a bridge between old and new systems. Short-term needs are compatible with traditional finance and may reduce the level of intermediation in the long term。 -
The opportunity for private credit to be monetized lies in improving asset liquidity and financing efficiency
The programme mentions the cases of FalconX, Sygnum, Apollo, Morpho, Centrifuge, etc. The value of the tokenization of private credit goes beyond the chaining of assets to the automation of letters of credit, withdrawals, asset matching and liquidity management。 -
THE REAL DEMAND FOR RWA COMES FROM THE WORLD'S DESIRE FOR A BETTER ASSET
The large amount of funds in DeFi requires more robust and profitable assets. Private credit, national debt, real estate, GPU financing, etc. could be part of the supply of assets in the chain。 -
Core judgement for the period: stabilization currency is moving from “encrypted assets” to “payment and financial infrastructure”
The cases of Kraken, Moneygram, Reap, Corpay, BVNK, J.P. Morgan, Bullish, Equiniti suggest that the stabilization currency is no longer just an asset on the exchange, but rather is entering cash deposits, business cards, cross-border settlements, business finances, capital markets and private credit。
Welcome to Tokenized, a programme of focused stabilization coins and monetization of real world assets. I'm Simon Taylor, today's host, and author of Fintech Brain Food, as well as director of market development in Tokenized. Kai wasn't there today, he went to work on something else. The stabilization currency seems to be occurring simultaneously and everywhere。
But today we have several wonderful guests. The second visit was to Wyatt Lonergan, a regular partner of VanEck Ventures, and you were a regular partner of Circle Ventures. Wyatt, how are you
Wyatt Lonergan:
I'm fine. Thanks for inviting me。
Simon Taylor:
Thank you for coming back, my friend. Another returning guest was an excellent Mark Greenberg, Kraken B2B Vice President. Your title rhymes well. Mark, how are you
Mark Greenberg:
Nice to see you again, Simon。
Simon Taylor:
Good to have you back. Before entering into interesting topics, I must remind the audience and the audience that the views and opinions of the participants may be personal and may not necessarily represent the views of their companies. Please do not treat anything we say as a tax, legal or financial recommendation. Please do your own research and be safe。
Well, the first story, since Mark you're here. Kraken and Moneygram have worked together to convert encrypted money into cash on a global scale. Kraken users now have access to a large global cash-receiving network of Moneygram, which in more than 100 countries around the world collects the cash corresponding to encrypted currencies in hundreds of different currencies. Mark, tell us about this。
Mark Greenberg:
I'm very excited about that. Kraken's long-standing mission has been to increase the use of encrypted currency. One of the real obstacles to achieving this is the availability of cash for gold, i.e. the ability to use encrypted currency at the right time, but in today ' s world, cash can also be used in many contexts, as it still makes sense in many cases。
This collaboration gives Kraken clients the opportunity to extract encrypted money in hundreds of countries, as you just said. It combines a very good traditional player like Moneygram with our unique abilities. Moneygram has been doing this in over 100 countries over the years, and we have our own customer onboarding, authentication and trading infrastructure。
It's really exciting. Now, on Kraken, if you want to put encrypted money out, you can use one of 500,000 retail outlets to do it。
Simon Taylor:
I cannot believe that many people living in the Western world today do not understand how widespread cash is in most parts of the world. I'm sure you saw this when you were in Circle. Now many businesses should see it too. Access to gold seems to have been a bottleneck。
Wyatt Lonergan:
Yeah, I mean, turning the dollar into a stable currency, I don't think it's a real problem. The real problem is to get the cash out。
We have also invested in this area. We invested in a company called Zar, which allows you to go to a local business across the street, exchange stable currency for cash and cover the global South market。
So when I saw the news, I thought it was great. And here's the thing: if you can connect it to an entity network like Moneygram, it'll be a very good savings and consumption tool, and its availability will increase dramatically。
It's great to reach a million physical sites in 100 countries. I think that would greatly increase the rate of currency stabilization. So this kind of thing makes us very excited。
Mark Greenberg:
Yeah. For me, this is, to a large extent, the beginning of cooperation。
Today it's cash-based, but Moneygram, most of these 100 countries, also supports bank withdrawals. So we can expect that in the next few months, we will also increase the liquidity of banks in 100 countries in the same product。
So, yes, in many countries, cash will be the way you want money. In many countries, we still need bank transfers, possibly in combination. But in a very unique way, this cooperation combines the breadth of their networks with encrypted money。
Simon Taylor:
There's an interesting pattern here. People used to think that, as soon as the stabilizer came along, the West Union and Moneygram were finished, because the stabilizer was instant, 7x24 hours across the border. You'll say that if you're very expensive, you can't. Cross-border payments are very bad. They always point to the cost structure of Moneygram or Western Union, but do not realize that, in fact, it is extremely difficult to complete conversion and distribution at the last kilometre. And you're paying for this distribution network。
Stabilized coins mean they can send the dollar anywhere, but taking it out is another matter. So tell me what you think of the re-engineering of a company like Moneygram. Have you seen this change from the inside? What does that look like
Mark Greenberg:
Honestly, this conversation started last year in TorontoConsensusA meeting of the General Assembly。
I would confess that at the outset I was reluctant to attend that meeting for exactly what you said. Moneygram? What are they doing? An old-school company, very traditional, sort of like you said, seems to be “sophisticated” or out of date。
But soon I got excited because we had a lot of similar motives. Like Wyatt just said, 500,000 retail outlets, it's not something that can be built overnight. You can't build in 100 countries overnight。
It has been more than a decade since we built the gold channel. It's hard. It is difficult for each country to move forward. So, what we see in Moneygram is a partner who's willing to sit at the table with us, who's willing to work with us on the details of technology in 100 countries, and who's willing to think creatively about how to get things done。
This is really a great partner from the beginning to the end. I will not say that this is the simplest implementation we have ever had, but you will like partners who are willing to go through chaos with you and get things figured out. So the relationship with them has been excellent。
I do believe that this will be the beginning of greater cooperation between our two companies as we reflect on the global demand for more retail and gold。
Simon Taylor:
Wyatt, I would also like to hear your views on other initiatives in this area. A lot of local stabilization coins are now emerging. How do you evaluate the maturity of local gold entry and exit corridors and local stability coins? What's the key to this industry next
Wyatt Lonergan:
I think these networks are still largely informal today。You go to Argentina, for example, and you see different levels of cash available. Stabilized coins are the most expensive category。
But if you think about who this user is, they're probably a man who walks a few minutes, goes to a local store on the street and converts his currency into a dollar. Then they'll keep the dollar cash in kind at home。
For example, Juan Lopez, a partner in this fund, often tells a story. He grew up in Bogotá. His mother was still going across the street to convert the Colombian peso into cash and then hold it。
So now, with the introduction of the stabilization currency, you can hold it in the non-trust wallet on your phone. And now, along with what Moneygram does, what Zar is building, and what Tether is trying to build, you start formalizing these networks over the physical infrastructure。
This has again made it more widely available. Now all I have to do is take my phone and go anywhere. I don't have to be in Bogotá. I can go to another country and get the same experience. So it's just expanding the availability of a stable currency network。
I believe that many of these infrastructures are now being built. I remember when we were working with Moneygram in Circle. It was more about putting USDC into these tracks. And now we're expanding it not just to stabilize currencies, but to any kind of encrypted currency. So this is really exciting。
Mark Greenberg:
Yes, it's interesting. Even in Canada, my mother-in-law did it. So not only Bogotá, my mother-in-law still likes the concept of cash。
In the Canadian market, Kraken worked very early with the post office here to make offline payments, including cash inflows and cash withdrawals. To be honest, I was a little skeptical about this product at the outset, but it turns out, surprisingly, that even in the Canadian market, this is a track that people would use, or even want to use。
So we've been thinking about how to do this in more places and how to combine cash with encrypted money. This cooperation is therefore, to some extent, a way to achieve this faster。
Simon Taylor:
My former banker would say that cash is a double-edged sword. It is important for financial inclusion, especially for older persons, low-income groups and social groups that are not fully digital or live outside the formal banking system. For 98% of cash users, this could be established。
The problem is that 2%. Cash is also extremely convenient for criminals. Unfortunately, it creates a risk exposure when you are able to transfer funds in an instant, seven times 24 hours and then convert them into cash. In a way, it allows some bad people to pass through a network originally designed to accommodate ordinary people。
But I know that Moneygram is regulated, Kraken is regulated. How do you manage such risks? Especially in cross-border situations
Mark Greenberg:
Increasingly, this perspective is being considered。
LET'S START WITH RETAIL OUTLETS. THE RETAIL OUTLETS ALLOW YOU TO CARRY OUT KYC, AND NOW THIS TYPE OF KYC IS MORE RELIABLE THAN MOST ONLINE KYCS IN MANY CASES. WE ALL SEE A VARIETY OF WAYS, SOME THINGS CAN BE FORGED AND MANY WAYS TO TRY TO BYPASS THE LINE。
There are, of course, many ways to resolve them, and we have worked very hard to do so. Everybody's playing a game of cats and mice. But the retail scene made it easier。
Besides, you have Kraken, and all our abilities. People often use the same argument to say crypto. We have been working very hard to ensure that in more than 50 jurisdictions where we are currently regulated, there are all of these components, such as KYC, fraud control, security, AML。
Are we perfect? Not perfect. Are any banks that I have worked with perfect in this regard? But every day we try to make ourselves better。
AND I WOULD SAY THAT CASH, ESPECIALLY CASH AT RETAIL OUTLETS, IS IN MANY RESPECTS ONE OF THE LOWEST EXPOSURES TO SUCH RISKS. BECAUSE YOU HAVE A DIFFERENT KYC METHOD. YOU CAN REALLY SEE THIS GUY, YOU CAN CHECK HIS ID OR ANYTHING。
Simon Taylor:
Indeed. The last kilometre of informal proxy networks may be different, but something like Moneygram, I think, is something else, and it sort of formalizes it。
Many do not realize that Tether was sent to a last-kilometre agent, and it is not clear how much was actually going on that person, who might have been selling the money. And here's a little different. So I think the difference is very important。
Mark, since you're here, and it's really not an ad, it's just that you have a lot of news this week. Payward, not Mark, bought a company called Reap for $600 million. Reap, based in Hong Kong, was established in 2018 as a profit-making company. They issue the Visa Enterprise Card, which is funded by the Stabilized Currency, which is the Business Card supported by the Stabilized Currency. They serve 22,000 businesses across Asia。
This is a very interesting acquisition, Kraken, or Payward is entering the stabilization currency payment game. Tell me about the logic behind the takeover。
Mark Greenberg:
Yeah. Kraken is the brand of a company called Payward. Payward is Kraken's parent company. Payward actually owns a whole bunch of other brands, such as Nina Trader, Breakout, CF Benchmarks, xStocks, and a business called Payward Services, which is my business。
What Payward Services does is to put all the great capabilities we've built in these companies over the past 15 years as a platform for other B2B companies。
We have done this in the areas of encrypted currency transactions, forecast markets, derivatives transactions, gold entry and disbursement, earnings and borrowing. But we have not done much on the payment side. This is changing today with the announcement。
The introduction of stabilization currency is clearly accelerating very quickly. Firms are using stable coins, even Kraken Pro. Kraken Pro is not actually designed for this purpose, but many businesses already use Kraken Pro as a ticketing and payment tool。
We realize that our users want this thing. We also recognize that we can channel this capacity to businesses around the globe. And we have been the first place to exchange global stable currencies and between stable and French currencies。
So when these capabilities are combined, they will enter the deeper and stronger Payward Services engine that we are building. We're very excited. It's a great team. The past few months have been very pleasant in understanding them, and we look forward to integrating them into our larger vision over time。
Simon Taylor:
Wyatt, what do you think? Stripe acquired Bridge, Mastercard BVNK, MoonPay acquired Iron. Who else can be bought on the market now? What does this mean for centralized exchanges that do not have such capacity
Wyatt Lonergan:
I think you can totally see the whole stack is being verticalized, which is very exciting。
There are still some players in the market. For example, when we were in Circle, we were involved in Rain's first round of financing. Rain may now be the biggest rival of Reap。
But it's exciting. You're seeing Stripe's stacks compete with Payward's stacks, Payward's stacks compete with Rain's stacks. Everyone's moving up and down。
I admired Stripe because in 12 months, they had gone from having little crypto service to buying the whole service area and actually picked out some of the best companies from the market, including Bridge and Privy. And, of course, there's the launch of Tempo, which is a very smart step。
I'm not speaking on behalf of Mark's strategy, but obviously, you're looking at something, like a bank card, and you're saying, well, it's a huge contact. We can have online economic models. We must have that ability。
In addition, from the point of view of corporate development or M&As, the acquisition of Reap can also provide a licence and regulatory footprint. If you do it yourself, it'll take a long time. This is a very clever step. It gives you access to markets, gives you thousands of customers, as you just mentioned。
these are customers who want to stabilize money, save and consume it. and these card networks are excellent and are growing rapidly. if you look at the volume of their transactions and the amount of exchange revenue they can generate, that's what you know。
So I think we're just starting now. Even if there is already a $600 million acquisition, Rain's valuation is close to $2 billion, and these companies could be much bigger in the future. So I think it's just the tip of the iceberg。
Mark Greenberg:
Yeah. Simon, last time I came here, we talked about Krak Card, which is our card in our money app。
It's very similar to what we've just discussed about Moneygram, and the bank card allows you to put encrypted money out of gold and use it in everyday life。
Reap is one of the best companies in this field. They issue cards for some of the world's best businesses. They are doing this in most markets around the world. Combining their plates with those of us, their distribution capacity and our distribution capacity will continue to advance our goals。
We recognize that some users will use Kraken and Kraken's own products, and many will use them, but we also want the same infrastructure that we have built to support more companies. Reap just helped us do that by bringing the same gold power to many other businesses around the world。
Simon Taylor:
as a paying house, i really enjoyed seeing the crypto industry finally accepting that interchange is a function, not a bug. the narrative has moved from “costs are evil” to “costs help us achieve our mission”, that is, immediate, 7x24 hours, the broadest and most accessible form of finance。
I find the proliferation of this choice very interesting. Mark, I didn't realize that Payward was operating in this corporate umbrella structure, a little like Alphabet, with a different business like Waymo, Google, Google Cloud. You can serve others like Google Cloud, you can serve people in your own system。
Help me understand, take me into Services business. Could you give some examples of the clients you can share and the type of work you do? Because I think this space is going to be very hot, especially now that larger institutions are thinking about how to get into the field and bring the capital locked in the traditional financial system into an instant, 7x24-hour world。
Mark Greenberg:
A good example is Bunq. Bunq is one of the largest neobanks in Europe. They want to put encrypted money transactions directly into their user experience。
We worked with them, from ideas to online access, for only six weeks. They can use our MiCA license plates, we can use our extensive gold entry and exit tracks, we can use the capabilities we built on the crypto side, and other components that we have built。
That's a client. We have many more exciting names going forward。
Simon Taylor:
You can't tell me and it's totally fine. But I think it's already interesting to have just one example. First, it's in Europe. I think Kraken's presence in Europe is really strong, although in America, apart from people like Wyatt who are familiar with the industry, it may not be fully understood. Secondly, Bunq is also a major success story in the area of Europe's neobank, with about 10 million to 12 million users。
so it touches the market that i know very well. but it did not belong to the stable currency or the crypto dialogue. now it's connected deeper, right
And then you start to say, "Well, now we've got personalities, unlicensed monetization stocks. Can we offer almost the same services as the broker-dealer? We can supply stocks. We can provide derivatives through the acquisition of Ninja Trader. We can provide a forecast market. In fact, we are now providing some of Canada's broker-dealers with predictive market capabilities。
So we have a lot of different components in the stack that we can put together. Bunq is the first public success story, but there will be more。
Wyatt, what's the last thought of this story
Wyatt Lonergan:
I just thought the field of bank cards was really, really interesting. Especially when you see service providers like Rain, I'm not sure Reap is the same, but some companies are also program manager and asser because they control economic models, which is very powerful。
Over time, we have seen some program manager, such as Marqeta, whose profit margin is squeezed, while Rain continues to grow. It's because it can be assuer or program manager. Rain has just announced that it has now become a principal member of Mastercard and Visa。
So I think there's a bigger view here, too, that the stabilization currency is being embedded in the traditional payment system. Like you just said, Simon, it used to be a stable coin or nothing. But I think what we see now is that the orbits are being put together。
USER EXPERIENCE HERE IS GETTING BETTER, WHICH MEANS THAT IT IS HOPED THAT IN THE NEAR FUTURE BILLIONS OF PEOPLE WILL BE ABLE TO ACCESS THESE TRACKS, AS DO BUSINESSES. YOU REALLY DON'T NEED TO THINK ABOUT THE BOTTOM PIPE. WE'RE JUST BUILDING MORE INTELLIGENT ROADS UP THERE. THE FUTURE WILL BE STABLE COINS PLUS SWIFT, STABLE COINS PLUS ACH AND REAL-TIME PAYMENTS。
So it's really exciting to see the world's largest companies buy here and the world's largest companies work together here。
Simon Taylor:
You just said a point that I think is very important and that many listeners should understand, but I would like to extend it a little。
Historically, three roles were required to issue cards. First, you need a bottom license holder. Second, you need a person who connects directly to the Visa and Mastercard gateway, who can send the transaction through the card organization network. Thirdly, you need the top-level program manager for compliance, pricing and all similar work。
Marqeta did two of the roles. It's done program management, and it's also done issuer procesing, but it doesn't necessarily hold the bottom plates. The interesting thing about Rain is it's all three roles. There are other companies that are also emerging, and they are also doing these three roles, turning into a whole house company. As a result, they have economic models。
Having an economic model means that you can share more economic benefits, gain greater economies of scale and operate in more international markets。
Visa and Mastercard did a very interesting thing about 10 years ago, when they turned their gateways, the ability to become direct members and access their systems, into clouds and multi-geographical structures。
Most of the world's large banks and most of the card processors do not necessarily have access to that version. They still have access to a physical data centre and then communicate with Visa in that way。
So if you're an updated player, like Rain, or Lithic, Highnote, Episode Six, in the traditional field, you have a real competitive advantage in moving towards internationalization. But they need international plates。
So I went back to Reap, which was very interesting, because Reap had a wide range of license plates. This could be a hidden secret weapon. Thank you for allowing me to stay here and pay for a while. I appreciate it。
I also thank our sponsors. So let's take a quick break and listen to the sponsors。
This program, if not now, is sponsored by our friend Visa. Visa is the leader in the digital payment field. Tokenized Assembly Platform, VTAP, uses smart contracts and ciphers to help banks move French currency into chains, whether by issuing stable coins, deposit tokens or other things. VTAP allows financial institutions to issue coins supported by French currency, improve financial efficiency and achieve programmable finance. Check the links in the description of this program to express your interest in VTAP。
The programme is sponsored by Stripe. Internet commerce is rapidly evolving, and AI agents are now becoming economic agents. They manage expenditures and conduct transactions autonomously. Stable currencies, on the other hand, are becoming a default tool for their use because of their programmable, instantaneous, globalized and low-cost characteristics. With Stripe, your business can prepare for this new enterprise. You can accept stable currency payments from the agents, get your agents purses and issue stabilization currency-supported cards that allow them to complete their expenses through an integration. From Shopify to Ramp, a variety of businesses trust Stripe to prepare AI company. For further information, please visit stripe.com/crypto。
The programme is sponsored by M0. The currency of stability is becoming a global financial infrastructure. It is time to mature the infrastructure. If you're a brand, you should have your own stable currency, and make it compatible with the financial flow of your product. If you're a distributor, you'll want to be the most valuable partner in stabilizing money. M0 is the only platform that brings together distributors and brands to build digital currency products for the world. M0, make your own money. See m0.org for startup。
Well, thank you very much for our sponsor. The next story is Corpay adding J.P. Morgan and BVNK's block chain tracks to its cross-border payment platform。
This expands the Corpay cross-border multi-track platform. The platform, which was originally based on SWIFT, ACH and real-time local payment patterns, has now increased its capacity to settle on a block chain in a given corridor。
The Chairman and CEO of Corpay said that by increasing both public and private chain capabilities, we can optimize the way payments flow and increase the speed, flexibility and efficiency of global clients。
The term “public and private chain” is interesting. So J.P. Morgan obviously has Kinexys, which provides immediate, 7x24-hour capability. BVNK, you know, is doing chain powers。
Wyatt, did you see this story? What do you think
Wyatt Lonergan:
Yeah, I think it's very similar to what we just discussed. It's really great to see a 500 standard payment company using block chain tracks. And I think it actually admits that in some corridors, the stability is better。
BUT AT THE SAME TIME, AGAIN, WE ARE NOT SIMPLY REPLACING SWIFT. WE'RE STRENGTHENING IT. I THINK FOR SOME CLIENTS, IT'S GOING TO END UP AS A SMART PATH. YOU'LL CONSIDER COSTS, SPEED, CORRIDORS, AND CLIENT PREFERENCES。
So this multitrack future has come. I think BVNK, Rain, Reap, and the companies we've been talking about, are the piles that are being built up. It's really great to see these big businesses starting to access。
So I think it's in line with the theme that we've been talking about throughout the program, that is, that the currency of stability is a new track that is being inserted into business and business systems around the globe. It's really exciting。
Mark Greenberg:
International financial flows remain too difficult. I think it is clear, unfortunately still。
STABILIZED COINS ARE MUCH EASIER. SO I REALLY BELIEVE THAT, OVER TIME, THE TRADITIONAL TRACK AT HOME IS STILL RELEVANT, AND THEN USING A MORE IMMEDIATE INTERNATIONAL TRACK INTERNATIONALLY AND GRADUALLY REPLACING SWIFT. I THINK THIS IS A STEP IN THAT DIRECTION。
We know that Reap and other companies, and indeed some companies that today put Kraken platforms together temporarily, are already doing this on a large scale. Large enterprises are doing so。
It can therefore be expected that there will be more similar announcements in the future and that public block chains will become more fully part of international financial flows。
Wyatt Lonergan:
I'd like to add a quick word. I think we are beginning to see another trend now, one in which businesses at some stage will try to resolve the problem of pre-financing and holding a large number of bank accounts around the globe。
So when we are able to use the stabilization currency and have a different last-kilometre clearing function, I think that the stabilization currency will become the trajectory for many cross-border transfers. If you can access these established networks, you can solve the last kilometre for the enterprise。
Ideally, this should mean that you don't have to manage a bunch of bank accounts around the world for financial managers and companies like Payward. It is hoped that this will start dismantling the existing system of correspondent banking。
So I think it's a much larger picture that we're heading towards。
Simon Taylor:
Tony McLaughlin has said that “one wallet to rule them all” is a wallet that controls everything. In this wallet, there may be monetized deposits or stable currencies, rather than opening many different bank accounts in many different places。
Because as a financial manager, I do want to put my savings in different places. I'm managing the risks, and I don't necessarily want everything in one barrel. But I do want to control it from a single dashboard instead of maintaining 30 different integrations in 30 different markets and connecting them to my own SAP or Oracle ERP back-end system。
Such integration projects can take several years and are extremely slow and painful. I want to be able to move money immediately, 7x24 hours。
People forget that CLS is closed on weekends. Fedwire was actually closed on Saturday, even until 2028. So in many markets, you can't actually finish the last kilometre on the weekend。
Therefore, I continue to believe that the currency of stability as a clearing tool has both domestic usage and market trading scenarios。
What banks are worried about now is that we do not know how to treat the fixed currency. Do they look more like wholesale deposits or more like retail deposits? As you can imagine, they may end up more like wholesale deposits. But I believe that we still need to move the matter forward meaningfully。
We are beginning to see how Basel and other regulators can get banks to think about this, because customer demand for 7x24 hours is really coming, especially in places like track.xyz and Hyperliquid. When geopolitics risks arise on weekends, traders want to trade, traders want to cross, and they can see that it all happens on Hyperliquid, but they can't do it in CME or elsewhere。
So I think it would be a very interesting impetus to see a form of settlement that did not necessarily exist in the past。
Mark, are there any other ideas about this story
Mark Greenberg:
Yes, by the way. Over time, I think we're moving towards a world where licensed stocks, which will be traded seven times 24 hours. What we're doing with Nasdaq, NYSE and DTCC are discussing things in this direction。
Interestingly, the hardest part now is actually how to get cash into and out of the system on weekends。
So this is another push factor that would force more traditional players who might have looked forward to stabilizing currencies to actually introduce them into their ecosystems. I think you can look forward to seeing more of this in the next few months。
Wyatt Lonergan:
There are also interesting new liquidity networks that are emerging. We have just invested in a company, and I cannot disclose it yet, but hopefully soon。
Because of the existence of the currency of stability, you can allow funds to flow around the world immediately, but in fact settle later. So these new networks are emerging。
Previous examples include what ARF and Huma do. But you'll see it emerge in markets like Africa and Latin America。
In fact, many encrypted money exchanges have played this role to some extent in the past. I believe Kraken too. Liquidity is being pushed to the margins, and what really works is these OTC trading counters, encrypted currency exchanges, and now these emerging companies. They serve all those who move stable coins globally. These people may be paying companies or, as Mark just said, increasingly from capital markets。
Simon Taylor:
i think there's one thing in crypto that's wrongly priced or misunderstood, that liquidity can have network effects。
I mean, if you go back to Ripple's earliest vision, it's supposed to be because money becomes instantaneous, and it should be able to jump around and create a network effect between all these traders, so it doesn't really get stuck。
I think it's always been right. It's just that in 2015, the timing was wrong, and it was a radical expression, like, "We're here to kill banks, and by the way, whether they want to buy our products," which may have been a problem。
Wyatt Lonergan:
Too early。
Simon Taylor:
Yes, too early. But it's the right idea. You can now begin to see it happening。
Stocks in local currency and stable currency are accumulating. You need to rebalance them. I've been talking to a couple of very big FX broker-dealers and the bank's FX desks, and they're trying to figure out, well, how do we bring institutional power here? Because we can see perfectly well that this is much more efficient, and we want to get involved。
So we're moving from the “only Citadel, Jump Street and hedge funds are involved” phase to the “market structure players” phase where they are trying to monetize. This will be very interesting。
Last major story this week, I find very interesting: Bullish will buy Equiniti at $4.2 billion。
Bullish, of course, is an agency-level encrypted currency exchange, and Equiniti is the leading transfer agent, the transfer agent, serving nearly 300 stock distributors and a total of 15,000 global enterprises. They deal with business actions, the renewal and transfer of legal title, that is, the work of a transfer agent. They deal with $500 billion a year in payments。
So the Bullish and Equiniti combination is the first truly fully integrated, supporting block-chained, tokenized stock issuer service provider with a transport agent at the bottom。
Mark, I want to hear your opinion. You mentioned before that monetization of stocks was a big theme. What do you think of this news, and the trend it represents
Mark Greenberg:
Yeah, it's exciting to see more people think about this field. Clearly, this is also an area where we have been thinking and moving forward for a long time。
I would say that there are probably two angles to the evolution of tokenized stocks. Actually, let me start with a simpler point. There's a clear play, and I think it's obvious to me, but it's worth saying. That's, it's definitely Bullish thinking about how to bring tokenized stocks to the United States market。
Transfer anent is vital for this. They are key components in achieving this. Companies like Securitize and Superstate now have these license plates, and they're thinking seriously about licensed monetized stocks。
So it's really exciting. But I would also say that there will be more and more such things in the future. I think there's three different angles here, one in the middle that I'm probably not so excited about。
On the one hand, you have issue-driven, exchange-driven missions like Nasdaq and NYSE are doing. I'm very excited about these projects. I think they may drive the largest volume of licensed transactions, including through such channels as broker-dealer。
On the other hand, you have permissions versions, which are unlicensed versions, such as what we do through xStocks, and what Backed's Global Markets. They allow you to run without any involvement at all. There's no transport agent in there. The KYC operates more like a stable currency, in both theminting and redeeming links。
So I think these two markets might be the winners. I know that a lot of people have invested a lot of money on the transfer route, trying to think about things from that angle. Maybe I'm more pessimistic about it. But apparently, Bullish bit a big bite here and tried to make it up。
Wyatt Lonergan:
I'm more optimistic about Bullish. Transfer anent is the real bottleneck. It is indeed a real bottleneck in the capital market。
i don't think we're dealing with tokenization, and i don't really like the framework of missions and missions, because capital markets don't work that way。
you can interpret a transfer as a source of truth, a real source or an authoritative source of registration。
i think a lot of people around the world understand tokenization a little bit like the idea of stabilizing currency in the early evolution of payment. in other words, they think we've solved the problem because we put a dollar on the block chain and it's over, right
But that is not the case, as we learned and matured later. The key is to integrate old and new systems。
So if you look at how a lot of tokenization works today, and as a distributor and asset management company like VanEck, what bothers us when we enter this field is that we somehow ignore this role。
In a world where there are human missions, we do not necessarily know well who owns assets, nor can we really limit them, and follow many regulatory requirements. For example, Reg S or Reg D. There is indeed some room for explanation as to how such things are viewed。
but what i'm excited about is not creating a parallel cap table structure, but making transfer ant as source of truth. you can monetize. then i think what we really need to address is the compliance and licensing mechanisms at the upper levels。
This can be done at the level of an exchange or at the level of a block chain. I believe Tempo may be doing something about it。
So I think you really need to move ant and broker-dealer to play here. In the end, I did think that the market structure would evolve, possibly beyond the DTCC structure now. But in the short term, I think this is a necessary step。
I'm just looking at the history of the stable currency and seeing a lot of similarities. We now seem too early to try to kick out the existing system, but in fact we still need it, at least to involve large asset management companies and large distributors。
Simon Taylor:
I think their network effects are worth mentioning. It is valuable to remain backward with the location of all capital today。
the location of all capital today is the regulated entity. they need something that they can do. transfer anent offers legal compatibility and backward compatibility。
A distributor could well create a new token on a new chain and then do what he wanted. But without a transfer agent, there's no legal compatibility, so people like VanEck, Franklin Templeton, BlackRock can't manage these things in the same way. Because they are themselves regulated。
I think it's valuable. But I share your larger view, Mark, that we are somehow embedding road dependence into a way of doing things in the past, which is indeed challenging。
For example, what Figure did when he issued his shares, and much of what Superstate did when you held that token, you actually held stock certificates, and all the business actions and other things that followed. All of a sudden, we jumped out of the old complex market structure. The original market structure was like a home-based industry of many different people, each doing different things and moving paper back and forth. And now, all this can happen on the chain。
So I understand the direction you want to express. But I don't know how you're going to be compatible if there's no change in American law. I understand that it's not written in Clarity Act。
Mark Greenberg:
I think we could use an analogy from the conversation we just had about the stabilization currency。
If I recall that, five or six years ago, when I was discussing stabilization coins with them, those conversations were very similar. You'll say that it's impossible for us to allow the transfer chain without KyC. We have to do it the way we do it now. It has to be completely authorized. It has to run like I can see who the ultimate holder is。
AND THEN AT SOME POINT, PEOPLE REALIZED THAT MAYBE YOU DIDN'T HAVE TO. THE ADOPTION RATE'S UP. NOW WHAT YOU SEE IS A DIFFERENT FORM OF INTEGRATION BETWEEN THE OLD WORLD AND THE NEW WORLD, THAT IS, A BRIDGE BETWEEN THE TWO WORLDS THAT ALLOWS YOU TO CONVERT OLD SWIFT PAYMENTS INTO STABLE COINS WITHOUT THE NEED FOR THEIR OWN INTEROPERABILITY。
IT'S NOT THAT CASH AND STABILIZERS CAN RUN ON SWIFT AT THE SAME TIME. IT'S JUST THAT WE'RE VERY GOOD AT SWITCHING BETWEEN THEM NOW。
I think that monetized stocks will be exactly the same over time. Yes, there must be bridges to bring things from the traditional world to the new world. However, the idea was that, in order for systems under old technologies to function, all the rules, capabilities and levels that existed in the past must be applied to new technologies in their original form. I cannot accept that view。
It may take four or five years, but I am very optimistic that we will eventually find a solution。
Simon Taylor:
I like your position, and I like that. Wyatt, what do you think
Wyatt Lonergan:
Yeah, I think the answer might be in the middle. Do we need all levels and all intermediaries in today's capital markets? Absolutely not. I think the structure that Figure has proposed is interesting and probably ideal for what we should try to do。
But you still need backward compatibility. So I think that's the key point. Yes, Clarity Act does not deal with many of these issues. It basically just says that securities are securities。
so the next step must be through no-action letters, that is, no-action letters, and frankly, through technological innovation. one can pre-programme certain compliance requirements into smart contracts so that we can begin to regulate them。
So the positive side is that we are seeing some interesting integration, such as Bullish; we are also seeing new policies. I think the company is trying to push these things. Superstate did well, Securitize did well。
but much remains to be done. because i think it would be very challenging for many companies if it were pure missions because of lack of oversight。
So the answer is somewhere in the middle. I don't know what exactly. But that is why we are actively involved. That's why we invest. That is why we are looking for companies that can help us resolve this problem。
Because we believe that once this chaotic middle zone is resolved, it will bring a huge release on the distribution side. And then you'll see that the issuer and the supplier could be anyone with a wallet, right? It'll flow through companies like Kraken. So if we can solve this mess in the middle, I think it will bring a huge distribution unlocking。
Simon Taylor:
Mark, I like the time frame you're talking about, maybe four or five years. Let's keep the topic going, because monetized stocks are not really mature and may take some time to arrive. There's a moment in a future, and suddenly it flips. But it may not happen tomorrow. So if it's too early, it could be miscalculated. I think it's a good framework。
There are still a few stories this week that we do not have much time to discuss. But I'd like to ask Wyatt and Mark, did you see FalconX and Sygnum working together to introduce tokenized credit products for corporate clients
Currencyized credit is another asset class, just like equities. Private credit has recently faced some challenges, but its monetization may reduce some barriers to adoption. I know Larry Fink has been talking tokenization is a democratic force. Wyatt, what do you think about the credit side
Wyatt Lonergan:
Yeah, I think you're seeing things happening in the traditional private credit market, but what's happening in the chain is really exciting。
For example, Apollo and Morpho. I'm not sure if that's an official announcement or some kind of leaking news, but there's a big collaboration going on between them。
We also see a lot of interesting entrepreneurs entering the broader area of credit, whether consumer credit or integration with Apollo and Janus Henderson. Cantrifuge did well here too。
So I think the greater thrust is that the market needs better assets, given the risks and problems in DeFi, and private credit is beginning to fill this gap。
This is also where tokenize RWA assets, such as real estate and USDA, function. I think many people call these infrastructure-type assets, but they have to do with private credit related to different industries. It could be real estate, it could be GPU financing, it could be something else。
But the central theme is that everyone wants better chain assets. So these new distributors are emerging and entering through markets like Morpho。
Simon Taylor:
Mark, what do you think
Mark Greenberg:
it makes sense to have tokenization as infrastructure. i think most people here will understand that。
I think that much of what is happening now in the private credit area is still more about how to package private credit and deliver it to people, rather than necessarily fundamentally changing the bottom product or changing its mandate structure。
Mobility remains the most important part of making these things work. I believe that this is effective for private credit in the institutional sphere. It may not yet apply to real estate and other asset classes, but I look forward to seeing more people try。
It's kind of like you have to turn the wheel around, or you're gonna get into chicken eggs and eggs and chickens. The more people build such products, the more they are needed, the more mobile they are, and the more successful it is over time。
Wyatt Lonergan:
And you're starting to see some mobility in a very unique DeFi way. For example, people provide mobility and then they can earn token。
There are also those who build on infrastructure such as M0, which essentially transforms something like intelval fund into a chain of vault, which has a national debt to provide near-immediate liquidity. You're going to lower the whole ASY in a way, but you're creating some mobility. So a lot of interesting experiments are happening here。
Simon Taylor:
It's really interesting. There's a team called Valenol, which is Blackstone out and is doing something interesting. I'm also an angel investor in a company called Fence Finance, and they're sneaking around behind the scenes。
I think a large part of it is dealing with this mechanism: assuming I'm a consumer loan agency or a car loan agency, I get a large credit line. When I had a loan coming in from the front, I had to go to my lender and say, "Look, I have it now, can I get a letter of credit?"
They may need a few days to check the documents and then wire the funds. Maybe the weekend won't happen. So there are built-in delays. Both institutions have operational and administrative burdens. Then you can send the loan to the front end。
If all of this is monetized, then this delay and administration will disappear. Because I signed the lettering agreement into a smart contract. I can draw my credit lines and then the money will flow more effectively。
I believe that this is a truly open-minded moment for anyone engaged in lending business in history to see how different the world can be. Even for those who want to collect the money immediately and then finance the next inventory, it makes sense。
So here's one side of the actual distribution of capital, and the other side of the DeFi that Wyatt just mentioned, building the fund itself. You can see that these early patterns are emerging, and you can see that big players are starting to enter。
That is the whole story that we have today. But this week we also saw that a16z crypto raised $2.2 billion for its fifth fund, and Haun Ventures announced a $1 billion fund. So pay homage to Dogo, the engineer in charge of allocating capital. We'll definitely invite you back to talk about it。
OpenTrade finance $17 million to expand the stable currency revenue infrastructure. MoonPay acquired Solana Executive Level DFlow, DFlow was used by Coinbase and Phantom. It's also interesting, more institutional。
This week is almost that. Mark, if people want to know more about you and what you're doing, where should they go
Mark Greenberg:
payward.com, or kraken.com。
Simon Taylor:
Wyatt, what about you
Wyatt Lonergan:
You can find me on X with the account number Wyatt Ronergan, or you can focus on vanEck us, or you can access vaneck.com。
Simon Taylor:
you can find me on all social platforms, the account number is sytaylor. and i'm gonna yell at the void, and of course we're at the tempo.xyz, and we're gonna be great partners almost every other day。
