Pod Insights Masters in Business Evolving Money: Stablecoins in Practice and Policy (Sponsored Content) About this episode Stablecoins are cryptocurrencies designed to maintain a stable value because they’re pegged to a fiat currency, such as the U. S. dollar. The result is a highly liquid currency with a fixed value. Stablecoins are transacted on crypto rails as opposed to legacy banking systems, meaning they are faster, cheaper, and easier to use.
Checkout.com, a leading global payments processor, is putting stablecoins into practice. They are upgrading their platform so that customers and merchants can use stablecoins in everyday transactions. Meanwhile, Coinbase is working with multiple levels of government to make sure that both legislation and regulations are in place to allow companies to use stablecoins with confidence.
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Transcript 0:00 Speaker 00 Since you're a subscriber to this Bloomberg podcast, we thought you'd be interested in a sponsored podcast called Evolving Money. Produced by Coinbase and Bloomberg Media Studios, it explains how institutional investors are adopting the world's newest asset class: crypto. Here's a recent episode.
0:22 Speaker 01 You had the government sending a message to innovators and developers that they should basically take any ideas that they may have and take them overseas or put them in a drawer somewhere and just abandon them.
0:35 Speaker 02 That's Fariah Shirazad, the chief policy officer of Coinbase, talking about the way things used to be with stable coins. But the message from Washington has changed in the last year.
0:46 Speaker 01 And so what you're seeing now with this sea-changing governmental attitude is it's actually a permission structure around developers and innovators who want to think creatively about different payment solutions that could be executed on with the use of stable coins.
1:01 Speaker 02 That unleashed creativity is powering a movement amongst major financial services companies who are now integrating crypto into their operations. In many cases, they're starting with stable coins. There are a number of reasons for that, including the ability to move money more cheaply and efficiently.
1:19 Speaker 01 By our count, there's about 250 different projects have been announced by any number of financial players and developers. So the biggest banks, the payment processors, the credit card companies, corporates and others to integrate. And I think we're just at the tip of the iceberg.
1:38 Speaker 02 I'll talk more with Fariah about policy trends in a couple of minutes. But first, I want to give you a peek into one of those 250 different projects he referred to: checkout.com. It's an example of a major financial player investing in stable coin infrastructure right now.
1:56 Speaker 02 They are a PSP, that's a payment service provider, an invisible intermediary working behind the scenes when you buy something online. Checkout.com started out processing credit cards, then moved into debit cards. And because they're global, they also facilitate currency exchange. Now they're deploying a major upgrade to their platform that will allow consumers to shop using stable coins and vendors to get paid in stable coins. That's what we're going to explore today: stable coins in practice and in policy.
2:31 Speaker 02 This is Evolving Money and I'm your host, Angie Lau. This show is co-produced by Coinbase, one of the largest cryptocurrency platforms in the world, and Bloomberg Media Studios. Now, in this series, we are exploring how crypto is being adopted by traditional financial institutions as the next logical evolution of the monetary system. And this episode is all about stable coins, which are cryptocurrencies designed to maintain a stable value because they're pegged to a fiat currency like the US dollar. So the price is fixed, but the currency is highly liquid. And because it can be moved on crypto rails, it's faster and cheaper to transact compared to legacy banking systems.
3:14 Speaker 02 According to a report in Forbes, "Stable coins were used in more than $30 trillion worth of transactions last year." To give you a sense of scale, that is more than Visa and MasterCard combined. Now, to be clear, the majority of those transactions were trading in cryptocurrencies, but other use cases are growing fast. Payroll, international purchasing, even retail shopping is all increasingly being done with stable coins.
3:44 Speaker 02 My first guest today is Checkout.com's Chief Product Officer, Moron Kilbachi. I started our conversation by asking him to walk me through the firm's five-year relationship with stable coins.
3:56 Speaker 03 Back in 2021, we were one of the first payment service providers to offer stablecoin settlement to our merchants. And so this is already a very long time ago in crypto world or in digital.
4:09 Speaker 02 Crypto years.
4:10 Speaker 03 In crypto years, exactly. We offered a service that unfortunately we had to wind down because the regulatory framework was just not there. And we were not able to find the right partners in banks and so forth in order to offer that service. But this is something that we are in the process of relaunching as we speak. And essentially, it's merchants that are acquiring funds with us want to get settled with with stablecoins. What does that mean? It means that they can they can settle, they can get settled 24 by seven, which is one of the big advantages. The settlement is immediate. You're not dependent
4:53 Speaker 03 on the bank hours and so on and so forth. And you're not dependent on the on the bank rails. And the merchant will be able to use to choose how they get settled, whether they get settled with with regular fiat, or whether they get settled directly into their wallet will be up to them.
5:08 Speaker 02 What are the markets that you're focusing on? And how is it all going to roll out?
5:13 Speaker 03 Yep.
5:13 Speaker 02 In your mind?
5:14 Speaker 03 We are an enterprise shop, right? Like, we support enterprise merchants that almost uniformly are international, like they they operate in multiple markets all time. And this is part of what we abstract away that complexity, you know, we give them the ability to accept payments with one global API that they can that they can just integrate and accept payments across the world. And so for sure, international is a big part of this. You know, in terms of rollout, we're going to start rolling out something which is pretty unique for us because we are a Europe based company, we're a UK based company. But we're going to start with the US and we're going to roll out from there.
5:58 Speaker 02 Is the marketplace? In the United States, already asking for this, demanding it?
6:04 Speaker 03 So it's a very good question. And the honest answer is that I don't know. You know, we believe in the ideology and the philosophy behind stable coins. We think that there's a future world where stable coins sit along other type of currency and enable cross-border, like borderless payments across the board. We look at this as an experiment, as something that is could potentially do good in the world. We want to put this out there. We want to see how people react to it. And the interesting bit is that some of the big merchants in the world are interested and curious because they have customers that are cross-border, that they have customers that have wallets with stable coins that they're currently not doing anything with, except for buying other forms of crypto.
6:49 Speaker 03 And so using it for retail is a logical next step for them as well. And so I think that it's a, it's kind of an experiment within the ecosystem where there's merchant making it available for the consumer and seeing what the consumer adopts and chooses at that point in time.
7:10 Speaker 02 Checkout.com is upgrading their platform to handle a payment system that currently handles, relatively speaking, little volume. But the word relatively is doing some pretty heavy lifting there. As I mentioned off the top, stable coins were used to settle more than 30 trillion US dollars in transactions in 2025. And 30 trillion is a number that has even the most traditional financial services companies asking themselves, hey, how can we get involved? Moron says they see this as a market with substantial growth potential around the world, especially in developing economies.
7:46 Speaker 03 If you're living in an economy that has a very high inflation rate and a very unstable currency, getting exposed to an equivalent of a US dollar is something that is good for you. When you want to buy cross-border and obviously not pay cross-border fees and FX fees and so on and so forth, then There is another benefit for you. And, you know, frankly, like in many countries, access to debit and credit card is not ubiquitous. And this is an alternative form of payment. And it has potentially a lower barrier of entry in multiple geographies.
8:27 Speaker 03 So I, I can definitely see a very good use case for cross-border payments, for cross-border retail and for developing markets.
8:38 Speaker 02 But what about larger, more established markets?
8:42 Speaker 03 For developed markets like the US and Europe, I think a lot of this is going to come down to preference and people sort of preferring stable coins. Because, you know, they've, they've traded to, for other crypto and they have liquidity in their, in their wallets. And, you know, rather than trading again to a, to a fiat currency, they just want to use it right there. And the convenience actually of paying with a stablecoin through this experience that we're building is actually, it's going to be pretty convenient, it's going to be pretty good. And so I, I think consumer preference is probably going to drive that usage and utility.
9:22 Speaker 03 And if I switch over to, to the, to the merchant side, it's all about liquidity and availability of funds. And the more the ecosystem builds itself out where vendor-to-vendor payments can happen on stablecoins, where cross-border payments can happen on stablecoin, then there becomes a flywheel where it starts making more and more sense for merchants to do this. And then down the line, I think that some treasury teams are, are starting to think about, you know, managing their own treasury completely on stablecoins and not having to deal with, you know, cross-entity settlement between multiple entities within one company. You can run it on a, on a ledger internally.
10:07 Speaker 03 And so that sort of plugs into this settlement and acceptance page, if you look at it down the line.
10:13 Speaker 02 When you are getting ready to roll out in the US, what is the biggest current constraint that you're experiencing right now? Is it regulation? Is it consumer wallet adoption? Merchant readiness? Operational complexity? Which is it?
10:29 Speaker 03 Despite the fact that stablecoins have been around for a number of years, for us as a fiat-based business, there are still a lot of stakeholders that you need to make sure that they're comfortable. And there are some operationalization hoops that you need to go through. It's about ensuring that our regulators know what we're doing and are happy with it and don't have concerns with it. It's getting the contracts in order and in place. So nothing is a blocker, but there are challenges, right? Like even in the US, there are different regimes, right? Like there's New York, which has its own license versus other states.
11:13 Speaker 03 There's complexity there and how you operate and where your entity is. And all of those things influence the timeline and the implementation path. The technological build is actually the easiest part, right? Everything around it is complexity.
11:33 Speaker 02 Complexity is the focus for my next guest, Farhdar Shiraz. Because if the technological build is the easy part and everything around it is complex, well, Farhdar's goal is to make sense out of the complexity. He is the chief policy officer at Coinbase, and his job is to work with governments and establish the regulatory framework that will let people like Meron launch their technical solutions.
12:01 Speaker 02 You're starting to see the enterprise and a lot more institutional players coming into the space. But where are we right now in terms of regulations? What is allowed right now? And where will we be allowed to go? What is the trajectory?
12:20 Speaker 01 It's a good question. It's also a very sophisticated question because you have two things happening simultaneously that are happening somewhat in parallel, but they will converge down the road. And that is you have the Genius Law, having been passed by Congress and signed into law by the president in July. And this, as you know well, is the federal framework for regulating stablecoin issuers. And so obviously, in a normal kind of calendar of regulatory action, you have legislation, and then the implementing regs, and then you go live. But interestingly, with stablecoins, particularly under this administration, you have rapid movement by the regulators to allow a use of stablecoins
13:03 Speaker 01 for some of the most complicated payment activities, even before Genius gets fully implemented. So you have Genius getting implemented, but then at the same time, you have the CFTC, for example, allowing stablecoins to be used for derivatives, trade settlement.
13:20 Speaker 02 Right.
13:20 Speaker 01 And that is enormously exciting. It's almost like a big sandbox, for example, that is, you know, what they call it in a regulatory perspective, where you've got market participants executing on and using the innovative technology with the blessing of the regulators.
13:35 Speaker 02 Yeah.
13:36 Speaker 01 Even as the actual regulations get, you know, bedded down. And that's really powerful.
13:42 Speaker 02 Right. And Moron Kalbetsi from checkout.com, I want to bring back what he said. He mentioned earlier that as they design their processes, they have to account for not just different countries' regulations, but even different states that have different rules.
13:57 Speaker 01 Well, you know, that's the big dilemma that I think the industry has at the moment. There are certain issues about how regulation takes place. So for example, for exchanges who intermediate crypto trades, spot market transactions, which are the bulk of the crypto trading that you see out there, at the moment, that is subject to state regulation. And it's not clear whether there's full federal preemptive authority over the states. And so that just creates a chaotic environment where you have 50 different regulators. Across fifty different states, consumers don't know what rules are applied to them depending on where they live. And developers have a hard time implementing.
14:39 Speaker 01 And managing the compliance burden of having fifty different rules, each different for each different state. And so there are issues like that. But generally speaking, you also have at the same time. A real willingness on the part of the regulators under the Trump administration to use every bit of the authority that they have. To provide the clarity that the industry is looking for. So there's, um, legislation's critical, it's our number one. Objective from a policy perspective. I'm confident we're going, going to get it done. But we are at the same time, working with the regulators to encourage them to. Provide clear rules. And what I mean by that is. For sure, every time you have a change in administration, new regulators come in and can change the rules.
15:24 Speaker 01 But it's very, it's, it's not as easy as, as it sounds for them to do a one eighty. If. The previous administration has finalized the rules and market practice has adapted. And adopted those rules because it becomes hard. The courts are careful not to allow regulators to engage in activities as. That creates sort of an unfair burden or chaos in the, in the markets. And so. There is a really interesting effort by the Trump administration to. Get right legislation done, but at the same time to race ahead with, with sound regulation. Uh, that they hope to bed down, have market practice evolve around. So even if legislation doesn't get done, it becomes very hard for. A future crypto hostile.
16:08 Speaker 01 Uh, administration to reverse things.
16:11 Speaker 02 If I were to ask you to look at the Doppler radar of crypto regulatory development. What's the temperature right now? What's the weather? What's in the forecast?
16:22 Speaker 01 It's a really, really interesting time because there was a lot of momentum, very fast momentum early in the in the Trump administration to make these changes that I was talking about. But what really has happened probably since Q three, Q four of last year, and it's even stronger, I would say now, is kind of the incumbent financial players have woken up and have launched some of the most furious attacks on these changes that we're talking about because of fears about what it'll do to the economic rents that come with, you know, their their incumbency. And so you're seeing all the traditional financial groups kind of jump up
17:04 Speaker 01 and say, wait a minute, we're not against this technology, but please not so fast. Do it more slowly, put more frictions on it, make it harder. And companies like ours are trying to, you know, be a be a counterbalance to that resistance.
17:26 Speaker 02 What do you think the stickiest issue is right now between incumbents and the crypto industry, the digital assets industry, the platforms?
17:36 Speaker 01 The rewards fight is the most obvious kind of visible example that you see written about in the press. But the other example is, is the fight that's occurring at the SEC. The SEC chairman wants to migrate capital markets on chain, T plus five, T plus six has gone down to T plus one, plus two or three. We can take that down to T plus zero, do instantaneous settlement. But a lot of folks who make their money off of that lag don't want that to happen. It's a big, big issue because it implicates a lot of financial intermediaries who are huge economic rents by sitting in the middle of transactions, but. Just like you don't need a mailman to send an email to someone, you don't need
18:21 Speaker 01 to have a necessarily have an intermediary to transfer value in the way you used to, or transfer a stock, or a, you know, or a dollar. And the question is, will public policy stop that or enable that?
18:34 Speaker 02 And we've talked a lot about what the US government is doing. What about internationally?
18:38 Speaker 01 Well, I think of it in two tracks, just to oversimplify it. One is the stablecoin track and the other is the market structure track. I think a lot of other jurisdictions moved well before the US established rules around crypto trading. Europe being a great example, MICA, the Market in Crypto Assets Regulation that they passed. But where the shoes are reversed is with regard to stablecoins or digital money, in that other jurisdictions have moved much more slowly than the United States. And some places like the European Union are, let's say, ambivalent about stablecoins. But what's happened is this Genius Act passed, you've had massive adoption, and all around the world now, there's enormous concern that
19:22 Speaker 01 because the US has gone ahead and adopted so vigorously tokenized dollars, and given the insatiable demand the world has for dollars as a, you know, as a sore value and as a transaction currency, that there will be enormous pressure on foreign currencies in terms of how relevant they can become if the dollar becomes more accessible in stablecoin form. And so one of the messages that we've delivered to other jurisdictions is, whatever you think about this technology, the decision's been made, the US has moved forward, dollar stablecoins are going to scale dramatically, the adoption's happening by
20:05 Speaker 01 Across the board by corporates, financials, everybody. And so if you want your currency to remain relevant, you have to have a tokenized version of your currency. And I think that's why you see more, more kind of rapid action in Canada, the UK to adopt stablecoin frameworks for their own currency. And we think that's actually a good thing. I think the more currencies are available in tokenized form, the healthier dynamic you have of, you know, foreign exchange transactions occurring or transactions occurring in, you know, and settled in different currencies. And so we, we hope that will happen.
20:45 Speaker 02 So do you think global players need one harmonized model? Or can the market function with multiple national regulatory regimes?
20:53 Speaker 01 You don't have to have harmonization, but I would say, I would say with stablecoins, you know, you'll have situations like right now in the UK where the Bank of England is proposing pretty tight caps on how much pound sterling stablecoin any individual can, can hold or use. And they're trying to do that because they want to be careful about the transition from the, the analog system to a tokenized system. We think that's a big mistake and that they need to do what the US has done, which is to adopt it rapidly and integrate it into a broad range of institutional and retail use cases. And that flywheel of adoption will be healthy for the development of the, of the pound sterling.
21:38 Speaker 01 So it's not an imperative that the rules be, you know, harmonized, but there is a common sense dimension to it that we've sort of support. On the market regulations, that is a place where having more consistent rules makes a lot of sense because if you're building a financial product. Or let's say you're building an update of a traditional app. You need to have some consistency so that that app can be, you know, accessed by users around the world under the same rules. There are also some kind of more esoteric sounding things like, for example, in Coinbase, I'll just give you kind of a more practical, very practical example. We want customers who want to use Coinbase to ultimately be able to
22:21 Speaker 01 source the liquidity for their trade. So if you wanted to buy Bitcoin or whatever, have all of that liquidity as centralized as possible. That's actually a good thing because it creates deeper, more robust markets. It creates more effective price discovery. Deeper, larger pools of liquidity are less susceptible to systemic events. But that requires some harmonization. But that's where you, you, you need a dialogue. And the US and UK happen to have a dialogue right now going on between the two treasuries, coordinating and collaborating on crypto and blockchain based and tokenization market regulation. This is one of those issues that we've urged them to look at, which is
23:05 Speaker 01 creating a system in which they recognize each other's regulatory system. And so, UK companies who want to operate in the US can provide US customers access to UK liquidity and vice versa. And that requires harmonization.
23:20 Speaker 02 That's Farah Shazad, the Chief Policy Officer for Coinbase.
23:27 Speaker 02 It's clear that things are trending in the right direction. The big questions focus on the pace of regulations and whether innovators feel there's enough certainty and stability to build products and push them into the market. Checkout.com certainly feels that way. It's going to be exciting to watch as they roll out their new platform. With that in mind, I want to go back to Moron Kelbachi and ask him, if their rollout goes as planned and stablecoins become more widely used as an easy to move, universal currency, how will it change the world?
23:59 Speaker 03 If this were to work, I think that seeing the ecosystem of money movement move towards rails that are digital and having payments that are borderless, that are free across borders, that don't suffer from the slowness that the existing system currently has, that don't suffer from the exchange fees that we're seeing, all of that makes for, I think, a better consumer experience and a better merchant experience. And that's what we as Checkout are trying to facilitate all the time and trying to find ways to enable. So it's maybe utopic to think about it now,
24:43 Speaker 03 but I think that there is a few years down the line, it could happen. So fingers crossed.
24:55 Speaker 02 I'm Angie Lau and this is Evolving Money, a co-production between Coinbase and Bloomberg Media Studios. Thanks for listening. There are more than a dozen other conversations in our feed for you to check out, so don't hesitate to scroll back in time and listen to some of those today.
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