Joining me now is Greg DiPrisco, co-founder and chief architect at M0. Greg, welcome.
Hi Ashley.
So Greg, what is behind the recent stablecoin boom?
Well, you're seeing a construct that is just much more efficient than using bank deposits for payments. Historically, we have always put our money in the bank and they don't pay you a lot for doing that. And that's because you get to use their infrastructure as a payments network. But stable coins are almost like a digital version of cash, where if you think about the dollar that used to sit in your pocket, you could transfer it from person A to person B without any intermediary, and it would be worth $1 when it landed in your friend's pocket. With bank deposits, that's not the case. Bank deposits are a direct credit relationship between you and the bank. They're a very inefficient form of money. So stable coins are bringing this bearer asset-like quality back to the money in our pockets, and people really like that.
And Greg, a lot of companies want to build stablecoin. How easy or hard is it to do that?
Yeah, that's actually what M0, my company, facilitates. So we help people build a white label or their own infrastructure to run stable coin rails and their systems. What we're seeing today is actually an interesting breakdown in the stack of stable coin architecture. You have the issuers, and we're seeing maybe dozens to a couple, maybe 20, 30 of those popping up to be large. basically, custodian bills and liquidity for stablecoins, then you have the programmability layer. And that's something where we we specialize a bit, and then you have the liquidity layer. And that's where you have the interactions between users and the issuers. So we're seeing this start to, I guess, trifurcate between the different actors. And that's how the market is starting to break down.
And you say the industry has misdefined the term stablecoin. What do you mean by that?
Well, they've used it very broadly at first. So first, it was anything that was trying to approximate a dollar. And then they used it very narrowly. And it was only, you know, basically a genius compatible asset sitting in a regulated US issuer. Today, I think we're seeing a much broader definition, which is a dollar approximate, that is in some way derivative of those regulated assets. But it could be a lot of things. I mean, we have people wrapping tokenized money market funds and calling them stable coins. It's a term that I think just needs to encompass this dollar approximate in an application with a bearer like principle.
All right, Gregory DePrisco, co-founder and chief architect at M0. Thanks for joining us on Taking Stock.
Thanks for having me.
