#1521 Denelle Dixon | Banks Are Going ALL-IN On Crypto

Denelle Dixon is the CEO and Executive Director of the Stellar Development Foundation. In this conversation we talk about what’s happening around the world with this technology, how people in emerging markets are using stablecoins and payment rails, Wall Street, and what the future will look like. ======================BitcoinIRA: Buy, sell, and swap 75+ cryptocurrencies in your retirement account. Take 3 minutes to open your account & get connected to a team of IRA specialists that will guide you through every step of the process. Go to https://bitcoinira.com/pomp/ to earn up to $500 in rewards.======================Polkadot is a scalable, secure, and decentralized blockchain technology aimed at creating Web3. Created by Gavin Wood, co-founder of Ethereum, Polkadot empowers users to build decentralized applications with ease. Backed by industry leaders, making it a preferred choice for big names, Polkadot stands out as a leading choice for investors seeking a reliable, future-proof solution in the growing world of Web3 technology. Learn more at https://polkadot.com/.=======================Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/=======================View 10k+ open startup jobs:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode.

• 0:31Anthony Pompliano?

  What's going on guys? We've got a great episode for you today with Denelle Dixon. She is the CEO and Executive Director of the Stellar Development Foundation. In this conversation, we get into the dirty details of what's happening around the world with this technology. How are people in emerging markets actually using stable coins and payment rails? On top of that, what's going on on Wall Street? They're going all in on this technology and why are they taking so many of the different products and services and trying to bring it on chain? Danelle is a wealth of information and she's got tons of insights you won't hear anywhere else. And so I hope that you guys enjoy this conversation. Here's my latest with Danelle Dixon.

• 1:01Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:25Anthony Pompliano?

  Today's episode is brought to you by Bitcoin IRA. Are you a crypto investor with a retirement account but don't have any crypto in your retirement account? Then listen up, this is for you. Bitcoin IRA is revolutionizing the way Americans save for retirement by helping smart investors diversify their savings with access to over 75 cryptocurrencies. With world-class customer service, military-grade encryption, and a vertically-integrated licensed trust company, it's no wonder more than 200,000 Americans trust Bitcoin IRA to secure their financial future. Getting started is quick and easy. It takes just three minutes to open an account. Once you're set up, their team of IRA specialists will reach out to guide you through every step of the process. Whether you're transferring an IRA from a legacy bank, rolling over an old 401k, or starting fresh with new contribution, the

• 2:10Anthony Pompliano?

  Bitcoin IRA team is here to help you get access to real crypto in your retirement account. And here's the best part, as a listener to this podcast, you can earn up to $500 in rewards when you add funds to your account. That's right. Search for Bitcoin IRA in the App Store or visit bitcoinira.com/pomp to join 200,000 Americans on their journey to upgrade their retirement. Bitcoinira.com/pomp to upgrade today and you can earn up to $500 in rewards when you add funds to your account. Today's episode is brought to you by Polkadot. Polkadot offers secure, scalable and decentralized blockchain technology that perfectly aligns with the needs of innovative projects. It was developed by Gavin Wood, one of the co-founders of Ethereum and the creator of Solidity.

• 2:55Anthony Pompliano?

  Polkadot aims to build an internet where users have full control over their data and their applications. Polkadot offers tons of unique features, a shared security model, along with the new auction model and significant implementations like ASIC banking. Given these characteristics, it's easy to understand why Polkadot is gaining more and more traction in the cryptocurrency world. Some people even are talking about it as the AWS of Web3. Now companies such as Mythical Games, Aster Network and over 50 other independent blockchains with hundreds of applications already leverage Polkadot's technology to power their platforms. If you're looking for a reliable, scalable and cutting-edge solution, Polkadot seems to be the top choice for industry players. Go check them out today at polkadot.com.

• 3:40Anthony Pompliano?

  All right. I thought a great place to start this conversation is Wall Street's going all in. They have now realized that there may be better technology that's out there in order for them to be able to do transactions, offer products to their clients. And I think a huge part of Wall Street's interest is like, there are users here. There's potentially new revenue sources for them. There's efficiency gains, like all these things that we know. I want to talk to you about what are they actually doing, right? And I think that you all, you interface with these organizations on a day-to-day basis. You're talking to them, you're listening to them, you understand what the products are that they're launching. How do you summarize like what has been happening on Wall Street on chain in the last year or so?

• 4:16Speaker 02

  Yeah, that's a great question. I mean, it's been wonderful to have Wall Street be a participant on this. And really, they they sort of started to go in like two years ago, and now they're all in. Everyone wants to be have they want to tokenize everything. So tokenization, it's a key word on the in the United States and also Western Europe. We spend a bunch of time talking with asset managers who are like, how can we tokenize this? What can we do with it? Some of them are on the slower side. Some of them have done it. We've already seen money market funds on stellar. Franklin Templeton built the first money markets money market fund on any chain and they did. They started the process in 2019, if you can believe it. So it took them that long to get the SEC to approve it. They now have Benji, which is their the asset. They have it live, not just in the US, but also outside the US.

• 4:56Anthony Pompliano?

  And what are they trying to get?

• 4:58Speaker 02

  They're trying.

• 4:59Anthony Pompliano?

  Doing this.

• 4:59Speaker 02

  So from their standpoint, they've actually been very focused on internal efficiencies.

• 5:03Anthony Pompliano?

  Okay.

• 5:04Speaker 02

  Remember beforehand, they had lots of databases that they had to like connect and make sure everything was done right. And they had a lot of people who had to spend time doing that. They now have a single source of truth, which is the stellar network for all of their that is their books and records. So if internal efficiency has been amazing. But the other thing that they're trying to get, which is what I love, is the fact that they can now offer this because of the internal efficiencies. They can now offer entry into their money market funds at a far lower entry price. So it used to be $2,500 to get into their funds. If you use the on-chain one, $25. That's huge. So it does open it up to additional retail investors that they hadn't been able to grab before. So the internal efficiency has saved them a significant sum of money from settlement times and also the settlement cost is very.

• 5:48Anthony Pompliano?

  So like on this, right? The way I describe it is like as ridiculous as this sounds, but like the banks really weren't able to take money from their right pocket and put it in their left pocket efficiently is basically this kind of internal efficiency stuff. And that's why sometimes if you wired from one account to another, there was like a two day settlement or one day settlement across borders nightmare. Like, there's all these issues. And really, what you're saying here is by having this like public blockchain that they now can operate against, you take that infrastructure and completely change the way that they're able to move money for themselves.

• 6:18Speaker 02

  Well, yeah. And I think if you you also, you know, they had to Franklin Templeton is just using them as an example. And Jenny and others have talked really openly about this. They. Had to have training wheels essentially when the SEC allowed them to do this. So they had to use, they had the Stellar network that they were running against, and then they also had their own internal databases. And the SEC eventually looked at it and was like, well, actually, there are more decimal points on the Stellar network. You can actually, it's more accurate and way more efficient because it didn't have so many different databases. So yes, the internal efficiency makes it so that it's one spot for them to look and they actually don't have to manage and run that. And it's immutable, could never be changed. Like, these are all really, really great things from them. There's also all of the functionality built into Stellar for them that was already there when they started, which is the clawback functionality,

• 7:02Speaker 02

  the ability to make it auth required so that they can control the asset in a way that, you know, you can't, I can't send it to you unless you're already KYC'd. We like it when they're open assets, but the truth is when you're dealing with securities, it makes sense, right? So they already had all those tools built in, things they had to build in separately in their other databases. So this is actually, it just made it so much more efficient for them.

• 7:23Anthony Pompliano?

  And when they're doing this, they're trying to increase the, or shorten the amount of time it takes to do these transactions. They're trying to drop the cost. Are they also interfacing with other banks? Like, it's one thing to move money from my right pocket to my left pocket, but some of my customers obviously want to interface, they want to move it from one account, I want to pay somebody, they're at a different bank, or a different financial institution. Like, are they, these organizations now coming together and saying like, what if we like team up together? And create like a, use public infrastructure, but create like a trusted network or something?

• 7:57Speaker 02

  We're not quite there yet, but I think so. I mean, I think eventually moving in that direction, but I think it, uh, just getting these assets on chain was a step change for them. I think with the new US policy around this and more focus and attention to blockchain and the ease of use of it, we're going to see more of them coming on chain. They're already talking, a lot of them talked to us about collateralization. How do you use these assets now for collateralization? How do you think about what we can do with respect to not just putting bonds on chain, but then how you can use those bonds after? So it's a really interesting conversation, which sort of allows them the freedom to think differently about the products they're offering their users, whether that be their business side clients or their retail clients. So it's really getting fun at this point. And then, of course, like, they all want smart contracts to be in play.

• 8:42Speaker 02

  But they don't really know how they can leverage smart contracts yet, but they want to, and they want to think about how they can do that. I mean, if you think about the money market funds and the way that we use money market funds and we write our checks from money market funds or whatnot, you're kind of not allowed to do that yet with these assets. Although Franklin Templeton is allowing people to move an asset from out of their wallet to other people's wallets, so long as that other people are KYC'd. But eventually, think of the world when you can actually just go and pay for your coffee with your money market funds. That's a pretty cool world to be in. That comes in a little bit of competition with stable coins and domestically what stable coins can be used for. But I think that like, these are the things that you historically couldn't do with the ease of use that you now can with blockchain. I've heard Jenny talk about Jenny Johnson, who is the CEO of Franklin Templeton.

• 9:27Speaker 02

  I've heard her talk about how you need to do instant interest. So you can't just like wait to settle once a day. They want to be able to say, you've been in it for three minutes, you get your interest for three minutes. That is, that is what the technology allows, but we're not quite there yet from the regulatory standpoint, so it'll take time to get there. But those are the things that we want to see happen.

• 9:46Anthony Pompliano?

  Now, are these assets bearer assets and like customers are holding them? Or is the financial institution holding them? How do you think about like some of the security stuff? Or what have they been talking about? You know, it's one thing if you say like, hey, I have, let's say, an older client, they've got stocks, it sits there, they have an interface, great. It's a whole different game if you're like, by the way, if you click on the wrong link in your email, your assets may go away, right? I think that banks get kind of nervous about that or not?

• 10:09Speaker 02

  Yeah, for sure. I think they still do. I mean, you can go, you can use the asset, you can send it to non-custodial wallets. But like, at this point, like, these assets are, that, well, maybe they want to move towards that. I'm not officially sure that they've actually moved in that direction. But like, eventually, that's where they want to go.

• 10:26Anthony Pompliano?

  And you've fully tapped into like, the value of the technology and have that available to people, but right now, you kind of walk before you run?

• 10:31Speaker 02

  Well, you're in the, right now, you're in the Benji app and you can hold it all in the Benji app, but it's still yours, right? It's like in your hands. So it's a, it's an interesting play to see how like, the, from the securities law standpoint, how they've been able to do that.

• 10:43Anthony Pompliano?

  So you mentioned stable coins, and that's another huge area where people are bringing this stuff on chain. I kind of think of it as like Bitcoin was product fit number one, right? With the Global store value. Now you have these stable coins, which far and away are have product market fit, whether they're number two or number three, who cares?

• 10:59Speaker 02

  Right.

• 10:59Anthony Pompliano?

  But people want to use that for medium of exchange. The money market funds are like yield, technically they're stable, right? And are they competing with the stable coins? Are this is all merged together?

• 11:12Speaker 02

  No, they're not merged together. And it's an interesting question. I don't know if you saw yesterday, the markup that where they had on the stable coin act. But there was a question about whether or not they were going to allow stable coins to be interest, like to be able to share that interest with the retailer, the business side.

• 11:26Anthony Pompliano?

  And what was the?

• 11:27Speaker 02

  They said they're not going to include that in the current.

• 11:29Anthony Pompliano?

  That's crazy.

• 11:30Speaker 02

  But is it like, this is a question.

• 11:32Anthony Pompliano?

  All right, let's talk about it.

• 11:32Speaker 02

  Is it crazy?

• 11:33Anthony Pompliano?

  I put my notes down here.

• 11:34Speaker 02

  Because if you think about what, so the technology allows all of this to happen, like the technology allows it. But if you think about like what money market funds are, they are a security that is an asset that is out there that has been regulated for hundreds of years. And they know like the what from the retail side, they have all these ways that they have to provide notifications to the users and give them the opportunity to understand what these are and what the, what the risks might be. And if you have stable coins and you're providing it's those assets, the, the assets that are backing the stable coins are sitting in money market funds. But then you're providing yield somehow so that you're sharing the interest with your consumers. Do they have the understanding of that? It's an interesting question. Like, if you think about a stable coin, are you, and you say, okay, we get a four and a half percent yield on the money market fund.

• 12:19Speaker 02

  So me as the stable coin issuer, I'm just going to share 2% with you and I'm going to guarantee that 2% to you. Is that a security?

• 12:26Anthony Pompliano?

  But my whole thing is, I think twofold. One, why, why does it matter if it is sitting in US treasuries, right? Because you should want to not take the paternalistic view of, hey, let's protect everyone from themselves and instead say, uh, someone's going to generate yield here. So the stable coin issuers.

• 12:48Speaker 02

  My kind of shared.

• 12:49Anthony Pompliano?

  Uh, they are going to go put it into treasuries anyways and they get all of it. So you should actually want to help the people.

• 12:54Speaker 02

  Oh, man, I'm right there with you. Like, I think that there's this like, certainly the tech allows it. And this is exactly the kind of thing that makes a world of difference. We have an, a wallet that's built on Stellar where they've been really focusing on Argentina. What does it matter to them in Argentina? They want to hold US dollars. Why do they want to hold US dollars? The inflation and deflation in their asset just up and down in their local currency. When they have the ability to have yield on it, it's even way more interesting to them because now they're not just hedging against inflation, they're also able to grow their wealth, which is a huge thing. So I would love to see this, but I just think we need to understand it butts up against all of these issues on the security side and the banking side that they've been doing for, you know, 70 years. So should it be put in a stablecoin bill,

• 13:39Speaker 02

  which is actually allowing like just stablecoins to exist? I think that there's an opportunity to address this issue. Should it be in this bill or should it be something that comes after as we get the technology out there more and more? We've got the stablecoin through. We now know we can have stablecoins. We now know they're not securities. So yeah, I agree with you. It should be there. They should be, users should be able to get value from these assets that they're holding. But I think that that's just a second order issue.

• 14:05Anthony Pompliano?

  And then Brian Monahan, I think is the Bank of America CEO. He came out and he basically said, you know, we're not allowed to do this, but when we are, we're getting in the game. That was just like TLDR, right? Is that they want to issue a stablecoin. JP Morgan used to have JPM Coin. It feels like the banks are going to just all be in the stablecoin game. And some of it will be for like internal efficiency stuff. But if I remember correctly, JP Morgan wanted their customers to use it back, you know, five, six, seven years ago. And I used to always be very worried about the fact that if they come out and they say, okay, we have this stablecoin, it's backed by dollars, everyone adopts it. In the future, could they just unpeg it? Like, could they basically just like, if the government did it, right? Like, okay, no more dollars, now everyone just uses JPM Coin?

• 14:50Anthony Pompliano?

  And they essentially back into having like a central bank?

• 14:52Speaker 02

  Well, technically, if it's a stablecoin issued under the Stablecoin Act, no.

• 14:56Anthony Pompliano?

  So then they would have to keep it?

• 14:58Speaker 02

  You would have to have the one-to-one backing, at least the way they act is currently written. But then banks have always been sort of treated separately. So, I mean, I don't think the banks are like super happy about the current language, although I think they're mostly, they're happier with it than they were before.

• 15:11Anthony Pompliano?

  Yeah. Do we know what their big concerns are?

• 15:14Speaker 02

  I don't know what their big concerns are. I mean,

• 15:15Anthony Pompliano?

  It's kind of like, you know, if the crypto people are involved, then maybe we just don't like it.

• 15:18Speaker 02

  That is a concern. But I think it's an interesting question. I was just going through this yesterday with someone. About whether every bank should issue their own stablecoin and what is that going to do? Like, is that the right sort of methodology for us to think through? I mean, look, when you have like those, those, if you're talking about like the JP coin or the JPM coin, whatever it was, it doesn't transfer outside of their network, like officially outside of their network. So does that mean that it's actually a stablecoin? Or is it something else that you're, and does that actually harm the use of stablecoins? I mean, one of the most beautiful things about what blockchain and certainly like an open public network provides is the ability to transfer that value seamlessly. And if you start having these banks not only issue assets, but then issue them on private permission

• 16:02Speaker 02

  chains, it just sort of creates the exact same infrastructure we have today. It doesn't improve the technology. So the only thing I would say is if banks are going to get into this, wouldn't it be amazing if they got into it on public chains? And if they're going to issue stablecoins, fine, great, but issue them publicly, allow them to move from one user to the other. Otherwise you're going to get into the exact same world that you are today.

• 16:23Anthony Pompliano?

  What about privacy of, you know, do banks want all their transactions?

• 16:28Speaker 02

  Well, that wasn't a big issue. I mean, back in the day, like, gosh, when I first started here at Stellar, we were working with IBM and IBM was actually building this technology to work with banks and allow banks to do all this transfer using Stellar. And part of the issue was no bank wanted any other bank to know how much volume they were sending on a daily basis.

• 16:46Anthony Pompliano?

  Of course.

• 16:47Speaker 02

  And so does it become an issue for them? I mean, there are ways to sort of obfuscate like the amounts, right? Like you can send different, you can send amounts at different times and like you can, you can bulk transactions so that you don't see all of it that comes through and when it's coming through. There are ways to sort of stem against that, but I think that that's like a really interesting competitive question, whether they would want all of their transactions to be on blockchain because it is immutable and it's open.

• 17:14Anthony Pompliano?

  Yeah. Do you think that we will eventually see stocks as well? Like, obviously this is a regulatory question, but those just get tokenized. They trade 24/7 on public chains and then like.

• 17:24Speaker 02

  I think so.

• 17:24Anthony Pompliano?

  New York Stock Exchange got a risk because there could be a decentralized, like public equity chain?

• 17:30Speaker 02

  I think that they end up, well, it's so interesting because this has already been, we've seen startups try to do this and some of them have failed just because they were too, before their time, where they've actually purchased stocks and then had them custodied and then actually issued fractionalized ownership in those stocks out to the retail side. We've seen that happen time and time again. Some of them have made it through and then we'll see how that works. Some of them came in like four years ago doing this, which that was probably too early for it. So there's already sort of that play where you can do that as long as you have a true custodian and you can prove that it's one-to-one backed, you can issue that same asset and you can buy then a fractionalized ownership of an apple, a share of apple, wherever you are in the world, in South Africa, for example. Whether or not that that's going to create competition for the New York Stock Exchange,

• 18:14Speaker 02

  I mean, the truth is, maybe they'll just jump in on it and they'll issue their whole exchange on a public chain and that would be super interesting. I think that you're always going to have those filing requirements with respect to, like, you're going to have to be on an exchange somewhere to make it so that it's, I mean, I just think upending that whole environment and that whole structure would be complicated.

• 18:31Anthony Pompliano?

  Yeah. Well, or do you just start it from scratch? Like, one of the things I keep thinking about is there used to be 8,000 publicly traded companies. Now we're down to about 4,000. So you have that 50% reduction, but you have this explosion of liquid public assets in crypto. They're not stocks, according to the regulators, but it sure feels like, you know, you can allocate capital to them. There's, you know, things that make them go up and down in price. Like, do we actually just say, hey, this one type of public market, which is the stock market, it's too onerous, it's too expensive, there's a lot of issues that doesn't trade 24/7. Companies feel like it's not worth doing because they have access to capital in the private market, but then they built a parallel new public market to

• 19:13Anthony Pompliano?

  a degree. And there's been an explosion. And so same thing with stocks is like, somebody just come along and say, hey, we're just going to parallel build something completely different.

• 19:21Speaker 02

  It could be, but it's also like the fundamentals, even if you don't agree with them, that we haven't seen the fundamentals yet come into the crypto markets in terms of understanding how they move, other than like today and last night, you saw all red on the crypto side. That was because of what happened in the traditional market. So I think that that's the only fundamental that we actually know today that actually moves the market in the crypto side. And it's supposed to be different on the stock side so that you're supposed to actually have fundamentals in business and that you want to disclose those things. You want people to understand what they're buying. It's very different when you get to like that security side and that security law than when you're actually on the commodity side, which is where the crypto assets sit today. So, understanding the fundamentals on the security side, I think, is why we have all that regulatory structure. Could you upend it? For sure. That would take

• 20:06Speaker 02

  a bit, given how long it's taken us to get a friggin' stablecoin law through. And we're not gonna probably see it until later this year, maybe in July, right before the recess. And it's, we've been at this for probably like two and a half years. It's kinda crazy.

• 20:18Anthony Pompliano?

  It feels like it's a very bipartisan effort. Is that kind of your read as well? Is that both Republicans and Democrats seem to be coming together and saying like, alright, fine, let's get this done?

• 20:26Speaker 02

  Yeah, well, I mean, it was amazing, even in the prior Congress with McHenry and Waters on the House side, they were very, like, they worked together to, like, pull this bill out. And honestly, the challenges of not getting it through had mostly to do with politics, didn't have to do with the bipartisan nature of the bill. And I think Front Hill and others who like La Cardo, a bunch of other folks have come in from the Democrat side, Richie Torres, to be able to support this. We saw, I think, seven or eight votes from the Democrats yesterday in support of it to get it out of markup. It's pretty great. Like, I do feel like in this, in this day and age, that's bipartisan. Historically, maybe bipartisan was a larger share of both sides, but I think it's good to see that. And we needed to see that.

• 21:04Anthony Pompliano?

  And then, in this stablecoin bill, I know that there's a lot of focus on US. Obviously, Tether and others are outside the US. I think there are different business strategies, right? Some people are saying, hey, let's go and let's offer this in US markets to US users for what I'll call like US use cases. Emerging markets, completely different type of user, completely different use case. I know that you guys kind of play in both worlds, right? Where you've guys done stuff in various countries in Africa, etc. Looks very different in the US market. And so, how do you think of the, like, stablecoin landscape, maybe? And like, does it feel like there's a line being drawn and people you have to pick? Like, are you in the US or are you specifically focused outside of the US?

• 21:48Speaker 02

  It's an interesting question. I mean, no, because even the stablecoin issuers that are actually in the US are still really trying hard to grab those markets outside the US. I think that really this regulatory structure is trying to say, if you're using and backing, like if you're using the US dollar asset and you're backing it with US securities, I mean, US treasuries, we should have some kind of say over what your regulatory environment looks like here in the US. You know, right now, the, the current bill has, I think, pulling those who are working outside the US and sat and are sat outside the US, working them in in the next 18 months or so. I'm sure that not everybody's thrilled with that. So we'll see what happens in that language in the Senate side. But I think that there, there's,

• 22:31Speaker 02

  it's, it's not as much of a demarcation between where you're focused. It's more of a demarcation about when do the US regulators get to have a say?

• 22:39Anthony Pompliano?

  Mm hmm.

• 22:40Speaker 02

  And should they, and should they have a say? Like, if you think about Tether, for example, they don't have operations for the most part in the US, and they haven't historically. And they've done exceptionally well outside the US and that the high demand for that asset outside the US, we see it all the time in Africa, in, on the African continent, in South America, Latin America, and Southeast Asia, high demand.

• 23:00Anthony Pompliano?

  And they're high demand for stablecoins or high demand, I want Tether?

• 23:04Speaker 02

  Oh, no, high demand for Tether. Like, they're just, Tether is like in the market. They've been in the market for so long. They did a really great job about getting in the market there. USDC has actually done a nice job in the short term that they've been focused there. And they've been able to make some inroads in those markets. But, you know, I'll just be honest, like, you see mostly that Tether is in high demand. So I think that they haven't taken the strategy of focusing on the US market, although folks in the US hold Tether. And so I think that's where the regulators are like, wait, if you're holding an asset in the US and you're also backing it with US securities, maybe, I mean, US treasuries, maybe we should have some say over that.

• 23:37Anthony Pompliano?

  Yeah. One of the things I heard from somebody, I think he lived in Nigeria, was he said that people on the ground are somewhat skeptical of USDC because they feel like it's like the US government coin.

• 23:51Speaker 02

  Oh, interesting. I haven't heard that, actually.

• 23:53Anthony Pompliano?

  I remember just thinking to myself, like, that is such like a on the ground Insight that I would have never expected because in the US like regulations are a good thing. You know what I mean? Like people are like, oh, it's like a regulated thing. It's safe. It's backed by, you know, whatever. And his point was kind of like, hey, there's an inherent distrust.

• 24:09Speaker 02

  For sure.

• 24:10Anthony Pompliano?

  In some areas with the US.

• 24:12Speaker 02

  Well, it's not just with the US. It's with any government, any government backing. Like there's inherent distrust. I haven't heard that. I've heard other things like the concern.

• 24:22Speaker 02

  That there was some concern in when I was on the continent last year that they that USDC had de-pegged. And I was like, that's not what happened. Like, none of that actually happened. But there's like this story that they see. They people because they're really looking for hold to hold US dollar backed assets. They want to make sure that they're safe and secure because so much of their the monetary policy in their countries don't allow that their currencies fluctuate so much. And so the US dollar is important to them. So I think that Circle has done a really nice job of eliminating that narrative over the last year and a half or so. And I think that's good. Like having competition.

• 24:54Anthony Pompliano?

  The user wins.

• 24:55Speaker 02

  It's the most amazing thing, right? Like, so you don't just want one asset. Sorry, everybody. Like, I don't want one asset. Just like I don't think one chain should actually survive out of this. A multi-chain world is the right thing. A multi-asset world is the right thing. So I think that competition on the continents for all of the for these assets is important. What we would love, what we like to offer them is the stable US dollar backed asset. And I think that's just a really important.

• 25:18Anthony Pompliano?

  Where do these people get their information from in the emerging markets? Are they on, you know, X? Are they watching YouTube? Are they reading?

• 25:25Speaker 02

  Yeah.

• 25:25Anthony Pompliano?

  Email newsletters?

• 25:26Speaker 02

  Like TikTok, right? Lots of.

• 25:29Anthony Pompliano?

  I'm so old. I don't even think of TikTok as like the first thing in my mind. I think all these other sources and then I gotta remember that thing exists.

• 25:35Speaker 02

  There's like a, there's a, but there's also a lot of, a lot of it is like they're like internal networks that they're talking to. So many of them are using all the the tools to have those conversations and.

• 25:46Anthony Pompliano?

  It's like social media and like group chats.

• 25:47Speaker 02

  Yeah, group chats. It's like a, and so they get tons of information and they. The thing that I love about working in these markets and spending so much time with them is we learn every time because we think that we know what problems are out there to solve. And the truth is, we have absolutely no idea. When you live in the West and you figure out like, like, are the challenges and we look and we say, oh, we can simplify this, this and this. And those aren't the things that they need simplified. And so I love working with local builders because they help me to understand like the world in a completely different way. I think that that's the reason why it's been so interesting to me on the stablecoin discussion and even on market structure and all these things that are so important to us here. Like, stablecoin is a no-brainer, like, complete no-brainer. It should have been actually pushed through.

• 26:28Speaker 02

  And had we not had like challenges on the banking side and challenges with the Fed versus the States, it's just a simple thing to do. But domestically, it's actually not as important as it is internationally, like to go to like work with these builders and to understand what like getting access to a dollar-backed asset means to the retail side is like, it's just, it's game-changing for them. And so for me, like, that's the focus. It's like, all these things that we spend so much time and so much energy on, like, we could just get them right, right away. And then move this technology and allow it to be used in the way that frankly, it's the best. Cross-border, it's the most amazing tool to be able to leverage. So now I feel like we're moving in the right direction with the policy here in the US.

• 27:11Speaker 02

  Frankly, policy outside the US has already been pretty strong. We still have a lot of work to do, though. And a lot of times, we're so focused on the West, we have a lot of work to do with like central banks and with governments in all of these countries that we just talked about. They're fearful because if you bring the dollar in, is it going to create dollar dominance for them and make it so that their currency fluctuates so tremendously? So part of it is like getting them comfortable with like, bring it in, they can then use the local, they can transfer it into local currency. Or frankly, it's not that different from them using Momo and all of these different like, the, the, the assets, yeah, the payment apps that they're using already.

• 27:47Anthony Pompliano?

  Yeah.

• 27:49Anthony Pompliano?

  Doge has been really looking at government spending. I remember a bill in, I think it was 2021, one of the spending bills. They originally talked about like, oh, if we could just like press a button and get the checks, you know, that would end up being physical checks, right? We could, we could just get it in people's hands. And there was a mention of a digital dollar. It didn't make it past like the first or second iteration. It got taken out, mainly probably because we didn't have one at the time.

• 28:14Anthony Pompliano?

  But at least it seems like they were thinking about that. How do you think about government spending and a lot of these technologies? Which, you know, there's a public aspect of like, there could be like auditing, I guess, by the public, but also just like an efficiency game.

• 28:25Speaker 02

  Yeah, I mean, it's so, wouldn't it be nice if you could push a button and have thousands of payments sent at once? It actually is really nice. We see it happening all the time. The technology just allows for that to happen right now. And so I really, I think that, you know, on Stellar, we've built this bulk dispersment platform that you can use for payments. Like, think about like companies who are already using it to pay gig workers globally. So they can like upload all of the transactions and push a button, and then it all goes through instantaneously to their accounts, to their wallets. This is being used all over. And so, and also, it's even being used if you don't actually have the receive side wallet yet, because you can just get a text message to say, hey, you have, we've paid you, and just download this wallet and you'll receive it. It's really simple.

• 29:07Speaker 02

  So I'm so excited about what we're focused on in terms of government efficiency. We just recently saw the other day that the president talked about USAID, maybe moving under the State Department, focusing on like really getting foreign aid out and using blockchain to do it. Well, I mean, we've been doing that already for the last three years. And so we would love to be able to use the technology for that. So I, I am really excited to see government focus on this. And just to make everything so much more efficient. I mean, if you get down to it, like, think about like taxes and like the payment of taxes, like the payment of tax refunds. How simple is that? I mean, it would, it takes a lot of skill to be able to get that put into a government office, even though the technology is there. It just takes time, but it's really exciting to me to see the future of that.

• 29:51Anthony Pompliano?

  What are you worried about? Like, you're a very optimistic person, you're very positive. That's, I think, why you and I get along. But, but what do you, what keeps you up at night? What are you worried about?

• 30:00Speaker 02

  I do worry about the fact that sometimes we all get ahead of ourselves. Like, there's a lot of shiny objects out there in the crypto and blockchain space. And I think that they're actually super useful because it demonstrates the flexibility of the technology. But sometimes too many people focus on the shiny objects and not on like the real tech and what's happening with the real tech. And I worry that as a result of that, maybe the technology takes another beating from... The regulators or from the just governments, not just even domestically, but internationally that we don't need to take. I also get worried that we don't actually understand the monetary policy implications on a global basis enough and we don't spend enough time thinking about

• 30:41Speaker 02

  that. And sometimes we're like, like, technology, here, make it work. And we need to, I think, really, you know, I've spent a lot of time with central bankers all over the world to understand what they care about. And then I've also like commissioned studies with universities to say like, hey, can you help? In Nigeria, part of the reason why the Nigerian government, like the SEC flipped the switch and said, no more crypto, you know, four years ago, or three and a half years ago, was because they were really concerned that that was actually, the crypto was fueling the rise against the government. And actually, we probably could have showed them that that's not what was happening if we used the tech stack to do that. But also, it made them fearful of using, having any crypto within the country. You know, all the, all the ramifications of things we've seen happen in Nigeria result

• 31:23Speaker 02

  from that fear. We got to eliminate the fear and really focus on the facts, and then the outcomes that they want to see for their internal constituencies. And so, I get worried that we don't spend enough time there as an industry. So, but, big picture, I'm super optimistic about what this tech can do.

• 31:39Anthony Pompliano?

  Let's end on a positive note. You have done a lot of work with the UN.

• 31:43Speaker 02

  Yeah.

• 31:43Anthony Pompliano?

  And I think there's a lot of funds that have been dispersed across some of these technologies. Describe a little bit as like what that work is and kind of what the technology's actually doing.

• 31:51Speaker 02

  Yeah, so that is the, the bulk disbursement tool that I mentioned. I think it's called the Stellar Disbursement Tool or something that we've, we're really good at, really creative at naming things.

• 32:01Anthony Pompliano?

  Don't worry, whoever created Bitcoin named the network and the asset the same day. So, future better than that.

• 32:07Speaker 02

  So, the, the technology allows for aid organizations like the UN High Commissioner on Refugees, like they, they used this to deliver aid into different countries. They've sent, I think, about $5 million worth of aid over the last couple of years. And that we, they kept the wallet on the receive side very simple, so that you can receive the, the value, and then you can send it to your bank account, or you can cash out at MoneyGram. No, nothing else in the wallet to do. Eventually, I'd love to see that grow. We can flip the switches back on for them to be able to do it. But why is this important? It makes it so that like that text message that the refugee receives to say, hey, you have received aid from the UNHCR. Download this wallet. They download the wallet. Their aid is in their hands in two and a half minutes because they have to fill out the KYC.

• 32:53Speaker 02

  That is what this technology does. That is what we've been doing for the last three years. Not only is it like efficiency and ease of use for the aid recipient and like all of those things. It's also like saves a ton of money. So like when I think about USAID doing this, it saves a ton of money for them to be able to leverage this technology. Just in like sending the $5 million, they were able to save $12 million in just like internal efficiencies, not having to take cash and to put it in these countries and to have all the security around it. They could actually do it digitally and it made so much more sense. And they can like now do it like on a, you know, they do it on a monthly basis to some folks, depending on the country and the work that they're doing. And they already have that contact and can do it so easily. So the efficiencies with using blockchain technology and especially all the tools that Stellar has built

• 33:37Speaker 02

  makes it so that it's a really great. So it makes me really excited. That is like the, I look at that and I don't look at it. It's a payment. That is what we have been focused on since Jed founded the Stellar Network, you know, and 11 years ago, we've been focused on payments and asset issuance. And this is using both. It's using the payments, but it's using those assets that are the dollar backed assets that are issued on the network. So it's exciting.

• 33:58Anthony Pompliano?

  It seems to be working.

• 33:59Speaker 02

  It's working. It's working super well. Like they love it. And I think that then, then in terms of like the immutability of the blockchain and having that transparent way to show, no, this aid was actually sent. And they can demonstrate that to their, any of the folks that are giving them aid. So the US government can do the same thing with USAID. That is like huge, right? That's the value of blockchain. Like everybody talks about like fraud and all those things happening. More fraud happening in the world outside the money in your pocket than it is on blockchain. So. Yeah.

• 34:27Anthony Pompliano?

  How do people help you? Like, what is it? You need talent? You need partners? You need what?

• 34:32Speaker 02

  Well, we need, always need talent. Talent is the most important thing, like keeping the the quirkiness, the sophistication and the passion for the work that we do at the SDF is really important. So we need talent. Partners are, we have lots of amazing partners that have done a tremendous amount of work to build up stellar. I'll be honest and tell you that I think historically, we haven't done the best at tooting our own horn, but others have done it for us. We're trying to get better at doing that ourselves. So yeah, both of those things are really important. And also just like, give it a go. Like, take a look at the tech stack and take a look at what's happening. We need developers to really embrace it. We see a lot of that right now and it's amazing. We can always use more.

• 35:10Anthony Pompliano?

  Amazing. Thank you so much for doing this. We'll definitely do it again in the future.

• 35:12Speaker 02

  Yeah, thanks so much.