Monthly stablecoin spending volume hitting a record over $1 billion last month, and crypto cards spending also jumping to a record with dollar-backed stablecoins accounting for 84% of volume.
And just as financial markets are increasingly coming on chained, so our payments in the form of these digital dollars.
They now move more money than credit card giants Visa and Mastercard, but these players are also embracing stable coins.
Visa has expanded its settlement pilots.
Up to 9 different blockchains and Mastercard has integrated alternative stable coins and acquired digital asset firm BBNK to optimize network liquidity.
Joining us live this morning is borderless XYZ CEO Kevin.
Kevin, great to have you here.
Thank you so much for joining me.
Thanks for having me on.
So for our viewers out there, tell us about the real world payment usage when it comes to stable coins.
Break it down for us.
I think today there's.
Really two different use cases that are driving a lot of the adoption.
The first is on the retail consumer side, and quite frankly that's just access to dollars.
So we're very lucky, I think in the US that the dollar is our native currency and we don't even think about it.
But if you think about people in emerging markets, whether it's Latin America, Africa, Southeast Asia, they save and spend and save is the important part in currencies that are very high inflationary, that are very volatile, things of that nature.
And there's been this insatiable appetite to have the US dollar, but they can't just call up Chase and say, I want a checking account, and stablecoins have become the way for them to get access to the dollar and to start to save in something that is more stable.
And on the business side, a lot of it has to do with Treasury management.
And making cross border payments much more efficient.
So the way that things usually work through the correspondent banking system is that you will prefund bank accounts in all the markets in which you operate, and that lets you do quote unquote real-time payments because you have these pools of cash that you're using and floating in order to create the appearance.
Of the real-time nature, even though correspondent banking can take a few days to top these things up with stablecoins, people are able to top up these pre-funded accounts in almost real time.
So instead of holding 5 days' worth of float, now you can hold 1 day's worth afloat, and that's a giant cost savings that's driving some of the Treasury adoption.
Yes, and Kevin, you mentioned emerging markets as well as inflation, and here in the US when we talk about a rise in inflation, whether it's consumer prices or producer prices, we're not talking about the same percentages that we see in some emerging markets out there.
So when it comes to adoption as well as usage, tell us what Borderless is doing, especially when it comes.
To the tech and infrastructure side, I think the infrastructure side is where we play the best when we think about how stablecoins get more adoption, right, it's how do we make stablecoins, which is an asset on the blockchain, globally interoperable with bank accounts and local fiat rails that exist all over the world.
The stablecoins are very unified. rails and regulatory licenses are not right, so you have on and off-ramp players that provide some of this liquidity, but they're fragmented country by country because that's where the licensing is, that's where the liquidity is, things of that nature.
And in the traditional world, if you imagine a world in which banks have to connect to every other bank they ever wanted to transact with, that certainly doesn't scale.
They connect to a network like SWIFT.
SWIFT is already connected to the counterparties that they transact with and therefore they can all kind of transact with each other.
Borderless really has built that for the stablecoin world where if I want to operate in 60 different countries and I want to connect into 10 different payments providers, right, one in Latin America, one in the US, one in Europe, one in Africa, etc. now I don't have to connect into a bunch of them one by one by one.
I can connect into Borderless and then Borderless is already connected into all of them and.
Lets me launch global payments in weeks instead of rebuilding infrastructure for years.
Yes, so I do want to get your take on your recent partnerships, especially since we're at this intersection of Trad and DI, especially when it comes to payments.
So tell us about the significance.
So we just recently announced a pilot with Mastercard, which is probably the big exciting one.
When we think about our infrastructure, connectivity is the core, right?
That is where we started.
That is the foundation of everything that is borderless.
But the connectivity we're finding as we work with more and more enterprise customers is simply just not enough.
They need back office tooling on top of that connectivity.
So think of things like RFIs, reconciliations, those are technical problems.
We can build fantastic products on top of that.
They need access to better data, so benchmarks for how corridors perform.
That's a data problem.
That's a technical problem.
We can crush that.
What we cannot do well is governance, and when we think about a company like Mastercard, a lot of people think about Mastercard's core business as credit cards, debit cards, card issuances.
I would disagree with that.
I think Mastercard's core business is the franchise rules, and effectively what Mastercard has been doing since the beginning of time has been creating a common governance standard and trust in regulated institutions in almost every country on Earth at this point, the scale of Mastercard.
And they're doing a pilot with us to bring that same concept of franchise rules and governance into stablecoins.
So if you're transacting across 7 or 8 different stablecoins payments providers with the Mastercard pilot, you can now go through a compliance review and diligence process with Mastercard 1 time instead of 10 times with each underlying stablecoin payments partner, and we think that this is really the big unlock for enterprise corporates, enterprise PSPs, enterprise fintechs who need not.
Just the technology to connect and the operational tooling and data to scale their volumes, but they also need to be able to do trust and compliance and quite frankly, Borderless isn't going to scale compliance around the world, right?
We don't have anywhere near the experience of the companies like Mastercard and others, so them choosing us to do this pilot was, we think, a really impactful moment for continuing to scale the space.
Well, Kevin, we will have to leave it there for today, but thank you so much for weighing in and thank you so much for shedding your light as well as perspective.
Thank you for having me.
