How Stablecoins Are Eating Payments, with Chris Harmse, Co-founder & CBO of BVNK

0:00 What's really getting exciting now is, hey, if you embed a wallet, you can earn yield on top of that balance. You can spend using a stablecoin-linked card.

0:07 You can build entirely new financial products on top of this infrastructure. So you can la- launch a neobank exclusively on top of stablecoin rails and serve users in 200 markets, which was not possible before.

0:23 Welcome to another episode of 51 Insights. Today with Chris Harms, co-founder and CBO at BVNK. Chris, welcome to the show. Oh, great to be here with you today. Looking forward to it. Yeah, likewise.

0:38 Chris, it's a pleasure to have you on. BVNK is one of the leading stablecoin companies, and today we're gonna unpack everything stablecoins and everything BVNK.

0:48 First things first, on your website, you mention you want to accelerate global money movement. Can you unpack that a little bit? What is global money movement?

0:57 What are we speaking about when you speak about global money movement and stablecoins?

1:03 Yeah, I think, um, it's important to realize that I guess each market today has kind of a domestic payment scheme where, you know, money moves on top of.

1:13 And each of those markets are kind of innovating at a, at a different pace. You've got Pix in Brazil, which is an instant domestic scheme run out there by the central bank.

1:20 You've got Singapore's got FAST, which is instant. I'm originally from South Africa. We don't have an instant, you know, payment rail in domestically in South Africa.

1:29 And then if you think, how does money move cross-borders?

1:32 The only way to link all these systems up together today is through a system we know of as SWIFT, which is a messaging layer, and you add correspondent banks into that. So that's kind of how money moves today globally.

1:42 It's domestic, the way it moves domestically, and then there's a way it moves cross-border. But those systems are all at different scales.

1:48 They're all at different, um, you know, different journey on their innovation to get to the holy grail of payments, which is real-time instant payments.

1:56 So really for us, you know, accelerating global money movement is allowing value to move seamlessly across these fi- fragmented financial systems, making the entire, you know, payment, whether it's cross-border, domestic, from one side of the world to the other, instant, always on and global.

2:13 And, and that's really the mission we're on.

2:14 So when you look at what infrastructure can be used to make money move at the speed of the internet or make mo- money move faster than it does today, that's where blockchains and stablecoins step in because you can think about it as a new or a better way to, to link together all of those domestic payment schemes we just spoke about with a better system that's always on, that i- is instant and real time.

2:39 And therefore, if you connect real-time payment rails in each of these domestic markets, you now have a global always-on real-time payment system, which is arguably where we all should be striving within the payments industry, is to do payments instantly.

2:52 If data and messages can move instantly around the world, value should be able to do that as well. And, and that's really what, what we've been building, is to bring that future about.

3:01 Chris, you have a, a trading background. What sparked your interest in stablecoins a couple of years back, and what led you to eventually found BVNK?

3:11 Yeah, so I, um, I was actually a FX spot trader at, at BNP Paribas, the French bank, and I actually traded a lot of these, um, CEMEA currencies, so a lot of the exotic currencies you would think of if you're in Europe or, you know, traded a G7 desk or something.

3:24 Everything else is exotic. And, and there trading FX spot is basically payments. It's doing payments for corporates. It's doing payments for institutional.

3:31 So you would execute a trade in a millisecond using all these new trading tools and trading technology and quants that have built all these trading systems, and you'd execute these trades in a millisecond, and then you went to settlement, and it ground to a halt.

3:45 There was T plus two to settle that transaction and then sometimes T plus 10 to actually receive your money because of the, the fragmented systems we just spoke about.

3:53 And, um, I always found that very strange that trading technology had moved leaps and bounds forward in twenty years and s- you know, um, with the digitizing of, of trading, but the settlement infrastructure that settled those transactions hadn't moved forward.

4:06 So I, um, being on an FX desk, you know, Bitcoin used to pop up on the Bloomberg terminal, and, you know, we'd have strong debates on the desk about, like, what it is.

4:13 Half the guys thought it was, you know, absolutely nothing and bogus. And so it took me a while because to get into, go down the rabbit hole and kind of did that in 2016.

4:23 Very much got, um, impressed with Satoshi's vision for peer-to-peer electronic cash, i.e., a real system that could, could move value instantly, just like, uh, data moves instantly, and kind of left banking.

4:35 Started a small hedge fund in Cape Town, South Africa.

4:38 Started, was an early user of stablecoins 'cause we were actually doing cross-exchange arbitrage as one of the trading strategies and kind of had come off a bank trading desk where settlements and payments infrastructure didn't really work despite trading technology having moved forward.

4:50 And then coming into this world where, hey, there was actually an infrastructure that worked. I could send a million dollars on a beach on a Saturday, and it would land instantly, and was really cool to me.

4:58 So I kind of got a bit obsessed with blockchain as applied to payments, and obviously when you're applying blockchains to payments, despite all of us wanting, wanting Bitcoin to work, it was just too volatile for payments, so step in stablecoins.

5:09 So that's kind of my, how I kind of found my way into that. And actually, my ex-business partner introduced me to, uh, Jesse and Don, my co-founders, and they had the same idea.

5:18 They had built a, um, the early doors of a crypto exchange in Africa, so they had some good infrastructure that they had already, that they had already built, and I linked up with them, and we, we started building BVNK on this core, on this core kind of mission and thesis that you could use blockchains and stablecoins to move money instantly, and that kind of has developed over the last six years into what BVNK is today.

5:38 What was your pitch at the very beginning, and how does that pitch look today when you speak to enterprises and corporates and you talk with them about stablecoins? Yeah, I mean, uh, we actually do...

5:50 We just crossed- Yeah... twenty billion in TPV, and I think we've just crossed three hundred and twenty people in the business.

5:54 So yeah, it's grown significantly, and we, uh, the brand BVNK was born in 2021, but- Like I mentioned, we've been operating the business for maybe two or three years before that as well, so it's kind of been around for, for six or seven years in its current form, but the brand itself has been around, uh, since 2021.

6:09 And, um, yeah, I think i- in early, early days approaching enterprise customers, and at first you had to explain what crypto was, then you had to explain what a blockchain was, then you had to explain what a stablecoin was, and then you could get into telling them, "Hey, this is a better way to move money."

6:23 Obviously, that has long since passed in, given what we know about, you know,

6:28 stablecoin, you know, news cycle, a lot of exciting developments over the last, you know, 12 to 18 months, whether that's Reg clarity, that's Circle's IPO, all these sorts of things that have just contributed to a groundswell or massive tailwinds in the market for stablecoin payments.

6:42 So that, uh, that has at least shifted. But I think today you no longer need to explain what a stablecoin is, but you need to quickly get into understanding the enterprise customer's payment flows.

6:51 Like, how complex are they? Do they move cross-border? And then really help them architect a way to think about what use case that stablecoins... You know, what use case would best

7:03 apply to their business and their payment flows, and then can stablecoins actually play a role in those use case, in that use case.

7:08 So that's really where we spend a lot of our time today and, and that has shifted from two to three years ago where people were large PSPs and that sort of thing. We're thinking about pilots and that sort of thing.

7:18 That has shifted to today where they're going live and they're doing billions and, you know, billions of dollars of TPV, and we support many of those largest PSPs.

7:25 But those same conversations I was having 18 months ago with PSPs, I'm now having with some of the largest enterprise customers in the world, where they're starting to think through, "Listen, how do we do this?

7:35 What is the right use case to focus on?" And, and that's really our advice is like pick the use- pick one use case. There's a lot of stuff you could do with this infrastructure and this technology.

7:43 Pick one use case, pick one that's a specific pain point to you and your business, and then let's work on, you know, what that use case could look like, whether that's stablecoin payouts for a creator economy or a marketplace platform, whether that's stablecoin acceptance for, you know, a merchant who, who is selling in 80 markets around the world and actually doesn't wanna take the FX risk anymore and just wants to collect digital dollars at, at point of checkout.

8:05 So depends on the use case, but that's really how the conversation has shifted.

8:08 We just released a, a big report as well on stablecoins, and some of the use cases we looked at were international business payments, payroll, digital commerce, corporate treasury operations.

8:19 What are the major use cases that you see in the market? What's most prevalent among your clients? Where do you see the most potential? Yeah.

8:28 So we see, um, we like to think about the product stack that we're building across six economic primitives, call them payment primitives. The first one would be send. So this is payouts.

8:37 That could be a B2B or a B2C payout. It might be someone paying an invoice on a B2B side, or it might be a payroll payout, which is a B2C payout, or some sort of creator payout for a creator platform.

8:48 We then have receive, which is stablecoin acceptance.

8:50 "Hey, I today accept cards, I accept some forms of digital wallets like PayPal, but I actually wanna accept stablecoins at checkout and completely bypass the card networks and, and, and do these payments and accept these payments on blockchains."

9:02 So that's accept or receive. And then we see store, which is embedded stablecoin wallet. So this is platforms looking to issue dollar, digital dollar bank accounts to customers in 200 markets around the world.

9:12 And then we have earn, which is, you know, earn some yield on top of that stablecoin balance. Think your, your checking account becomes your savings account now. You can store your money in digital dollars.

9:22 You can earn yield on that. You can send and receive out of that wallet.

9:25 And then finally, we, you know, cards, which is a stablecoin-linked card linked to that wallet where you can now spend your, your balance wherever Visa and Mastercard are accepted.

9:33 So if you think about those primitives, there's a whole host of use cases underneath that, but effectively they're in one of those broad buckets.

9:39 But I think what we see in our business today, one of our fastest growing use cases has definitely been creator payouts, marketplace payouts.

9:47 Um, you know, we, we've got customers like Deel, which is a large gig economy, uh, payroll platform. You know, they're doing contractor payouts in stablecoins.

9:55 We see B2B payments as well where, you know, people are paying invoices cross-border in stablecoins.

10:02 On the receive side, we see large, um, retail trading platforms who are in Europe, and they've got customers in 80 markets.

10:09 Those customers are now topping up their stock trading accounts in stablecoins, which is seamless and instant. So we see that kind of funding use case for, for receive.

10:17 And we're starting to see the early signs, and probably one of the more exciting ones for me on the receive side, around eCom platforms, you know, eCom, you know, eCom, you know, really ac- starting to accept stablecoins at checkout, which I think is what you really need to get that use case to go vertical is we need people to be on their Amazon account paying with stablecoins.

10:35 I don't think we're there yet, but I think there's some early signs like the Shopify, Coinbase announcement where they're gonna start accepting stablecoins at the Shopify eCom, you know, at the, at the eCom store.

10:44 So I think those are quite exciting and, and, and ones we see a lot of. We see less of the treasury B2B type, um, treasury use cases.

10:51 What we do see is stablecoin settlements for PSPs, so a PSP will process a fiat transaction and are settling their merchants faster, seamless cross-border using stablecoins, and I think th- those are some of the larger ones, you know, across our 20 billion of TPV.

11:06 But I think the more, what's really getting exciting now is those are all kind of stablecoin payments use cases, but we're starting to see, "Hey, if you embed a wallet, you can earn yield on top of that balance.

11:17 You can spend using a stablecoin-linked card. You can build entirely new financial products on top of this infrastructure."

11:22 So you can lo- launch a neobank exclusively on top of stablecoin rails and serve users in 200 markets, which was not possible before. You know, a neobank would have had to launch in each market and this sort of thing.

11:33 So I think, um, you know, I'm quite excited about, like, that new bucket of use cases popping up with, hey, you can actually launch banking products on top of stablecoin infrastructure, not just do payments, pay-ins, payouts, that sort of thing.

11:45 Yeah, absolutely agree, and one of the companies we just had on the show is OpenTrade.

11:50 OpenTrade is a company that offers different yield products along the risk curve for payment providers, but also exchanges for users to then use their stablecoins and- Earn money on their, on their stablecoin amounts.

12:04 So a lot of exciting use cases, Chris. Let's unpack that a little bit more. What is the real advantage of using stablecoins? What makes them so appealing? So it goes back to the, the underlying infrastructure.

12:16 So if you think about stablecoins- Mm... as applied to payments, what is different, like, you know, today banks close on the weekend. So firstly, you don't have a 24/7 always on real time payments rail.

12:28 So, um, so when you think about payments, the, the three key pieces are, like, speed, cost, and reliability of that payment.

12:35 On speed, you're always gonna win 'cause these are in- this is, you know, real time instant infrastructure that's on 24/7, 365. The second piece of that is cost.

12:44 At the core infrastructure level, to process a blockchain transaction is really just costs the gas fee. You know, there's other fees on top of that for conversion, that sort of thing.

12:51 But if you compare that, so, you know, you're winning out a lot of pure infrastructure cost as well. And then the last one is, like, reliability of a, of a payment, and that includes, like, things like transparency.

13:02 Can I see where, you know, payment status is and that sort of thing. So I think

13:07 the reason stablecoins make sense, and they make sense specifically for cross-border, anytime money is moving cross-border, is because of those three things. You get, you know, instant settlement, so your speed is there.

13:16 You get a very low cost to process one, a $1 payment or a billion-dollar payment will cost the same on a blockchain.

13:23 Um, and then thirdly, you get that transparency, i.e., you can check where that payment is, the status of that payment through block explorers versus, um, if anyone's worked in payments, they would know what it feels like to chase down a MT103 SWIFT message where no one can find the money.

13:38 It's somewhere in the pipes. You're not really sure which bank it's at, so you get a lot more transparency.

13:42 So I think speed, cost and transparency or, you know, and reliability or transparency of the payment, you, you win. So that's where they really shine on the payment side.

13:50 But I think on the building, uh, why, why dollars, why digital dollars shine globally is people in the Global South or in emerging markets struggle to get access to dollars.

14:01 So by giving them away through a, you know, a easy, you know, crypto wallet that they can get on any smartphone. So it's that permissionless nature to get access to dollars versus a, a difficult...

14:11 It's difficult for someone even in South Africa, let's say, with exchange controls and how many dollars you can buy. Can you even get your hands on dollars?

14:17 This infrastructure and this technology allows you to get dollars global- globally, um, pretty, pretty easily with an Internet connection or a smartphone.

14:25 And, um, there's, you know, there's insatiable demand for, for dollars still. You know, it still is the world's reserve currency.

14:31 So I think that use case really drives a lot of the demand for digital dollars outside of large, uh, market, developed markets. Yeah. Uh, stablecoins have really exploded in 2025.

14:42 Not only the stablecoin narrative, uh, but also stablecoins as a, a tool and technology. Uh, stablecoin supply sits now at around 270 billion US dollar. Why do you think it's, it happened in 2025?

14:58 And what were, for you, the main catalysts that you looked at, uh, personally, but also with BVNK and you really thought, "Wow, this is amazing that it, that this is happening and this will be a breakthrough for stablecoins"?

15:13 Yeah, I think, um, there's three things really.

15:15 So like I said, we've been building in the space for, you know, over six years now, and, um, early on there were three things that weren't there, and arguably some of them were headwinds to the whole industry likes.

15:24 So the first one is, is, is really regulatory clarity. So, you know, MiCA coming in in Europe, you know, obviously the new administration pushing through the, the Genius Act in the US.

15:33 I can't underestimate, you know, the, the, the impact that that has had on just people willing to interact with stablecoins, enterprises now having a clear framework, being able to start building and transacting with stablecoins and that sort of thing.

15:46 So that regulatory clarity was one of the ingredients. The second one is you needed a critical mass of TPV, so payments volume, to really start serving enterprise level use cases because a, you know...

15:58 And I think it's taken some years to build that transaction volume up.

16:02 But you, you know, you can go look and however you wanna look at the data, total transactions for, in stablecoins is somewhere in the region of, like, 27 trillion annually, more than Visa and Mastercard, but a lot of that is still trading related.

16:12 So if you strip out just payments related, that's already got into 10 trillion, which is like three times the size of, of PayPal, almost rivaling Visa's kind of transaction volume.

16:19 So with those transaction volumes comes increased liquidity, comes decreased costs, as we spoke earlier. So I think you needed that to really get into the enterprise.

16:28 And then the last one was a critical mass of users who had stablecoin wallets and wanted to interact with stablecoins, and that's really where we've seen that, you know, the Global South lead, where there were high, you know, young populations, high adoption of, um, uh, you know, digitally native and lack of access to, you know, traditional financial products, but also lack of access to dollars, and stablecoins solved that problem.

16:49 So now you had regulatory clarity, you know, serious amounts of TPV, which, you know, you need to kind of do any sort of serious payment volume, and then a critical mass of users demanding this from their merchants, their, um, you know, whether they're the businesses or, or, or these local domestic platforms.

17:06 So those confluence of factors came together, I would say middle of last year.

17:10 And as things started getting clearer and clearer across those three and those vo- you know, those numbers went up and to the right and the, and the regs came through, you had this kind of explosion of, of, um, activity across the stablecoin market.

17:21 So yeah, I think it really has been an exciting year, but it seems to keep accelerating basically.

17:27 So we're really excited into that kind of last year and our, our growth is actually accelerating from, so which is, which is really good to see even, even at the 20 billion TPV mark, we, we're seeing faster growth than we have historically.

17:38 Agree. I feel it keeps accelerating, not only on the stablecoin payment provider side, but also on the issuer side. It feels like everyone is now racing to start issuing their own stablecoins.

17:50 One of the things we've been looking at is how do those stablecoin issuers behave in the long term, and how competitive will they be with the stablecoin issuing business model, which, which basically means issuing stablecoins, accepting money for that, and then deploying that money for a yield and making- Tons of profit on that.

18:12 And we feel that this might be a race to the bottom. How do you see that playing out? Do you think the stablecoin infrastructure play is a race to the bottom? Is it a margin business? Is it a scale business? Is it both?

18:27 How do you see that? Yeah, I think you've got to separate issuing stablecoins, as you mentioned, with Tether, you know, which is a very profitable business, as you said, in a high interest rate environment, obviously.

18:37 We, we saw rates- Mm-hmm... being cut on, on Wednesday and, um, and the distribution, which is really the payment providers.

18:43 And we are, we're a stablecoin-agnostic, blockchain-agnostic platform, so we support all the major stablecoins. We have, you know, great relationships with all the issuers.

18:50 Uh, and we're a large distributor of their stablecoin through our payment products and the payment flows that we enable and, you know, those primitives that we mentioned.

18:57 Um, and I think you can already see that issuance is a very profitable business, but a lot of any new stable...

19:03 So there was a first-mover advantage for Tether, but a lot of the new stablecoins being issued have to give away almost all of that yield to try get distribution. So arguably, you're seeing...

19:12 And then you're seeing Coinbase, Circle. Coinbase keeps the lion's share of Circle's yield because they're the distribution partner for USDC. So I think you're seeing that tension between distribution and issuance.

19:22 Long term, I think, and you've already seen USDG, Paxos's consortium stablecoin that they issued. I think issuers end, end up similar to money market funds, just on the blockchain, basically.

19:33 It's a wrapper to invest in Treasuries, and you'll take a small fee for providing that wrapper, which is more like a management fee like a money market fund would charge, and not be able to keep all of that yield.

19:42 And you'd actually have to pass all that yield onto the end user, which is really the promise here, is you wanna pass Treasury yield onto the user of, of that stablecoin or who's actually using or interacting with that stablecoin, whether that's the user in Argentina, South Africa, Nigeria, or that's the business in Hong Kong or whatever that's opted to use stablecoin.

19:57 So I think long term, I think most of the yield will be given through to the consumer, which how it should be. You shouldn't be keeping the yield at the issuer level.

20:05 And, um, the more stablecoins that there are, the more blockchains there are, the more fragmentation and complexity there is for the user and the end business. And that's really where we come in.

20:15 We solve all of that complexity. We make blockchain payments as easy as, as bank payments. You don't need to care what stablecoin you're using, what blockchain it's running on.

20:23 We abstract all of the complexity and take care of that for the enterprise customer and their end user. So I think there's a lot of value in, in, in providing

20:32 stablecoin payments infrastructure to use this new technology to do payments regardless of what stablecoin it runs on top of or what yield the issuer is passing back to the user.

20:41 You saw now players like Stripe launching their own blockchain, Tempe getting into the blockchain payments game. You saw Circle launching their own blockchain, getting into the payments game.

20:54 What went on in your head when you heard that announcement from, from Stripe? How do you see that, and how do you make sure that BVNK is competitive against VMs like Stripe entering the market now?

21:08 I think you, you know, issuing your own blockchain, I mean, if you think about the infrastructure to do a stablecoin payment, there's the blockchain, like let's say base layer.

21:16 There is the wallets you need that will live on top of that blockchain.

21:19 There's the orchestration to build payments, you know, payments workflows and that sort of thing, and then there's that connectivity back into the fiat world.

21:27 And actually, you can see Stripe are trying to do every, own every part of that stack. They already own the fiat stuff through, through their existing Stripe business. They acquired Bridge for the orchestration.

21:36 They acquired Privy for wallets, and now they're launching their own blockchain. There's value in owning that full stack. Let's see how it plays out.

21:41 I think more blockchains fragments liquidity and creates more complexity for the end user. And so again, that probably plays nicely.

21:49 The more blockchains there are, the more complexity, the more fragmentation, and therefore the more businesses like ours can work with enterprise customers to, you know, not worry about what blockchain it runs on and just be able to make a payment seamlessly.

22:00 And yeah, I think because we also own our own full stack, we're not dependent on any other kind of wallet infrastructure platform. We have all of that in-house. Um, our stack is called Layer1.

22:12 So through that we own our own destiny in terms of wallet infrastructure, how we interact with all these blockchains and that sort of thing.

22:18 So I think we are really well positioned to, you know, as more stablecoins come to market, more blockchains come to market, more complexity gets injected, more fragmentation happens to really, you know, make it easy for customers to use this technology, because ultimately that's what you need.

22:31 It needs to solve a real problem, and making it simple and easy to use is kind of where, where those two, two things meet.

22:37 So we're quite confident in our, you know, in our product roadmap, what we're building, the infrastructure that we have, the customers that we're winning.

22:43 Um, yeah, and I think, um, as we know with payments, um, there is, it's a massive market in terms of TPV potential.

22:51 So we think there's, uh, you know, enough space for, for all of us 'cause the comp- the com- the competitors aren't, are not each other. It's really fiat payments and the correspondent banking system.

23:00 So that's kind of where we take in market share. Yeah. So you basically offer your clients the whole range of blockchains available, and depending on their needs, you give them the, the most performant chain.

23:13 And my question back would be, do your clients even have a preference for what blockchain they are gonna use? No, I don't. Similar to like, does anyone care how like the underlying Visa network works?

23:25 They just wanna tap their card and it works basically. Yeah.

23:27 So I think whatever's obviously gonna make a payment instant and give that like user experience that they're used to in the fiat world, we need to recreate that user experience on the blockchain side, and I think the way to do that is with high-performant, fast TPS-type blockchains.

23:43 So you're seeing, you know. But at the enterprise merchant level or customer level, no, the, you know, there's no preference for a blockchain.

23:49 They just want, they want those payments to be instant because that really is the promise of, of the tech, you know? Yeah. One of the biggest announcement you had this year was your partnership with Worldpay.

23:59 Can you unpack that a little bit for our listeners? What was this all about and, and why was this so huge for BVNK? Yeah, I think it's really about the, the scale that, that Worldpay has.

24:09 I mean, I think it was the, you know, Worldpay doing, you know, 2.5 trillion in TPV, a million plus customers processing 50 billion transactions a year. So we're the, we're the one of the world's largest PSPs.

24:20 Which process a range of, you know, card payments, alternative payment methods, all this sort of thing.

24:25 Stepping in and adding stablecoins, you know, stablecoin payouts to their, to their stack was a real, you know, it was a real, uh, I guess, large dis- largest scale deployment of stablecoins into a merchant base, you know, a TPV base and that sort of thing.

24:38 So that was, it was really exciting, and that has really allowed Worldpay's merchants to pay out in stablecoins in dollars, basically, in digital dollars into 180-plus countries around the world.

24:49 Uh, creates powerful network effects as adoption spreads and more people are getting stablecoins paid out to them and then we said that user then can use the stablecoin, he can store it, he can earn yield.

24:58 So the more stablecoins you can distribute into the market through partnerships like the one with Worldpay, the more you drive adoption at that user level, and then you get that nice flywheel, more users, more TPV, drives more adoption and, and that's really how you get the network effect going.

25:11 So it, um, yeah, really is an exciting partnership. Chris, I also wanna look a little bit into the future in the next one, two, three years. First, what do you expect in terms of re- regulatory developments?

25:22 You mentioned the MiCA in Europe, the Genius Act, the Clarity Act is coming here in the US. Um, what are for you key catalysts that, that you have on your map?

25:34 Yeah, I think the, um, regulatory clarity or the regulations come into place now have gone from being a, a headwind for the industry to a tailwind, and I think that tailwind will continue because now that the US has got the Genius Act out, you know, Clarity is slightly different, not stablecoin specific, but more crypto, crypto market related, sets a precedent for other countries to put really pragmatic stablecoin frameworks in place, obviously with Europe and the US already having that in place now.

25:59 So I think that continues and that's a broader tailwind for the market. I think we're seeing, um, you know, enterprises, PSPs coming into the market accepting that this could be, you know, is a new payments technology.

26:11 It should sit alongside cards, alternative payment methods, stablecoins, and they should be integrating it into their stack.

26:16 So we're seeing more and more of that, even with some of the older PSPs in the market that you would expect would take some time are starting to think through this.

26:23 And then I think, so that's on the PSP side, which is obviously a... And then there's also the, the merchants themselves, so the large enterprise customers who have these complicated payment workflows.

26:32 These businesses are global. They're accepting payments in 200 countries around the world. Think marketplaces, think, you know, think, um, big tech and all this sort of thing.

26:40 And I think what we're really watching is, again, that flywheel of more users, more TPV, continued regula- regulatory clarity drives more enterprise adoption.

26:50 So I think we're still at the early stage of really enterprise adoption.

26:53 When we see the S&P 500 all interacting with stablecoins, not just, you know, 15 or 20 of them, that's really where, where I think it can get to over the next couple years.

27:01 And so it's really just, just about, you know, continuing to serve our customers, making these use cases easy for them and their end users.

27:08 Uh, and again, abstracting all the complexity as, as all these new blockchains and stablecoins and stuff come to market, how do we make sure that the UX meets their, their, their tough standards, which is very, very high and like, um, you know, in fiat and consumer payments.

27:21 Are there any regions outside the US or Europe that you are very excited about when it comes to stablecoins?

27:30 I think, I mean, LATAM, Africa, APAC are where you're seeing most of that user adoption, which are driving merchants, which are generally in the US and the EU serving those, you know, serving those.

27:40 So it's actually user adoption at the grassroots level in LATAM, Africa, Southeast Asia, that are driving merchants that are global but generally domiciled in, in the US and Europe.

27:49 So it's this, this great kind of ecosystem developing of users driving merchants, merchants driving their PSPs to all adopt this technology. So yeah, I think...

27:58 But yeah, a lot of the rapid growth is coming out of the emerging markets and super exciting and, and, um, yeah, we see that continuing and we're seeing more and more large enterprise customers which are domiciled in the US and Europe starting to lean in and understanding why this makes sense for the emerging market consumer.

28:13 Last question, Chris.

28:14 One of the big differences with stablecoins compared to financial infrastructure that has been built in the previous decades is that stablecoins run on blockchains, and blockchains are decentralized.

28:24 And a lot of people are saying that the value accrual for that money movement that happens on blockchains goes back to the infrastructure layer, in this case, layer ones, who facilitate those transactions, who facilitate that infrastructure.

28:42 If you look at the whole payment stack and you have that layer one, you have the payment providers, you have a lot of, um, technology layers, layers in between, where do you see the most value accrual happening if this is gonna play out like we all hope and expect stablecoins will proliferate, blockchains will proliferate?

29:02 I mean, I think it's still an open question. I think value accrues to all, all parts of the stack today.

29:07 I mean, I think ultimately at the pure infrastructure layer, there you want not just payments to live on your chain, you want a whole bunch of other use cases and, yes, you pay fees to the network through gas fees to process those transactions.

29:18 Um, and I think that will proliferate, but I, um, yeah, I don't think like out of a, every dollar of, of, you know, let's say it's $100 payment and the fees are whatever, $1, I don't think most of that value is going to the blockchain at all.

29:31 I think the ch- blockchains are trying to become the cheapest chain they can use to get more volume on top of them. But then there's a whole host of other things. There's that orchestration in the stack.

29:39 There's how do you issue wallets on top of those blockchains.

29:42 Um, and then you also have to, which we haven't really spoken about, is like how do you do KYC, KYB transaction monitoring in this world of on-chain blockchain payments?

29:50 So obviously we're a heavily regulated and licensed financial institution in the UK, EU, soon, soon to be Singapore and, and the US, and we are the regula- have the regulatory responsibility for travel compliance, screening all these transactions.

30:04 So there's an im- there's a compliance cost to having this open permissionless, you know, always on infrastructure, but you still need to make sure that you are doing payments in a regulatory compliant way, and there's a cost to doing that.

30:15 So I think payments are not a, a, you know, they're a multi-layered beast, I would say, and all of those layers are there for a reason, like the compliance layer is there to prevent financial crime and, you know, that orchestration layer and, and i- is there to actually process the payments and, and this sort of thing.

30:31 So I think, you know, I don't think it's like where it gets into the layer.

30:34 I think all of those layers are important to actually deliver ultimately- A customer experience or a, you know, or a use case that actually solves a problem for a customer in real life.

30:44 Um, and I think everyone's gonna, you know, have, has a part to play in the stack to bring that, to bring that to, uh, fruition.

30:50 And then just following up on that KYC part that you mentioned because I think it's, it's very important.

30:56 Crypto and blockchain is much more transparent than traditional payments because everything is on chain and everything is transparent and visible and openly accessible.

31:07 Uh, at the same time, it's s- super challenging because you, you have participants in the system who have, uh, their own wallets that are not tied to an iden- identity often.

31:17 Um, but still, you need to, uh, somehow facilitate that KYC. And how do you solve that? And what, what is your, your biggest challenge or is, or maybe the biggest unlock, uh, now with blockchain when it comes to KYC?

31:32 Yeah. I think you've got to think through KYC.

31:34 So Travel Rule is really, has been implemented in blockchain, and well, Travel Rule has been around in the fiat world for a long time and to, exactly to your point, like, you need to know who's making the payment.

31:43 Like attach, you know, the ultimate sender or the ultimate beneficiary needs to be known in the payment chain, and that, that data needs to move with the payment effectively.

31:52 And this is how you fight financial crime and, you know, do transaction monitoring. So that rule has been implemented in blockchain.

31:58 And exactly to your point, blockchains by definition, you know, are pseudonymous addresses. You can't really tie it back. But I think you have to split it into two things.

32:07 There's custodial platforms, think Coinbase, think Kraken, you know, think BVNK, where we do have to KYC our customers. We regulate it.

32:14 You KYC them, and their names are attached to a specific wallet, and we provide that data with the payment payload because of Travel Rule compliance.

32:22 Where it gets just a little bit more tricky, and, and that's everywhere in the market now, everyone who's regulated needs to be Travel Rule compliant depending on what region you're in.

32:29 It's been rolled out in most regions. So you've got this network of everyone that's in custodial.

32:34 We kind of know who the ultimate sender and the ultimate beneficiary is, and there were a little bit of UX tweaks and stuff we had to make, um, to stay ahead of that and make sure it was a smooth experience for our end users.

32:44 But when you're dealing with a non-custodial wallet or s- self-custodial wallet, as some people call them, that is a lot more difficult. There's no way to kind of verify. But what you have in blockchain is...

32:54 So that's a, an infrastructure. You know, it's designed. This is how blockchains are designed. And the way you solve for that is you actually have way more,

33:04 let's call it, like, data points for every payment that moves on the blockchain.

33:07 So you've got better tools to detect financial crime in the blockchain because you as an investigator in our fin crime team can use tools like Chainalysis or Elliptic to look at every single wallet that that specific $1 of stablecoin has interacted with, and then you can risk score that.

33:24 And then that gives you way better information than you would in a fiat, in the fiat world where you'd only see the last hop of the payment, basically.

33:30 And then if there was anything wrong with that payment, you would need to request further information to understand where it came from down the chain.

33:37 Blockchains give you more this, more information, so you can't explicitly solve the KYC with self-custodial wallets, at least not today.

33:44 And there's, you know, certain people working on infrastructure-level, blockchain-level solutions and this sort of thing.

33:49 But you can get quite comfortable that the payment you are making, even though you don't 100% know, you can get users to opt in and confirm that.

33:56 But then you also get this rich data set provided by tools like Chainalysis, where you can almost be sure that this payment is 99% not the proceeds of crime or something like that.

34:07 And therefore, you can let the payment go despite not having a specific name attached to that self-custodial wallet. But let's see where it plays out.

34:13 It's, as you say, it's a big, a burning topic in stablecoin payments and blockchain infrastructure more broadly.

34:19 And, you know, I think there's gonna be some innovate- innovative solutions that come to market over the next couple years.

34:24 In 2018, when this Travel Rule came along, everyone in the more libertarian crypto community shouted, "No, this is, this is gonna be the end of crypto. It's against everything we, we stood for.

34:37 This is gonna become like a normal banking system." And I feel like the truth is always somewhere in the middle.

34:44 This is playing out now, and we see there are a lot of benefits to using blockchain and stablecoins, but there are also, uh, benefits of making this, um, compliant and, and regulated.

34:55 So excited to see how this plays out. Chris, last thing before we end this show is a lightning round. Short questions, short answers, very casual. [upbeat music] The first cryptocurrency you ever bought? Bitcoin.

35:08 USDC or USDT, which one do you trust more? Tough one. Probably at this stage, I trust them, trust them equally, I would say. If you asked me that question five years ago, I probably would've given you a different answer.

35:18 But I think there's enough, uh, there's enough points in the market today that say they're probably, they're probably on, on equal footing. Yeah. Agree on that. Same for me.

35:27 Third, what's harder, raising venture capital or getting regulatory approval? And I know, I know you did both with BVNK. Uh, definitely getting licenses are tougher than raising money. Yeah.

35:39 And last one: One country where stablecoins will change everything first. I would say markets like my home market, like South Africa and, and other markets in Africa and Latin, Nigeria.

35:50 I think Argentina, it's already having a massive impact on the, the lives of Argentinian citizens today. Yeah. All right. Chris, thanks so much for coming on the show. Uh, this was great.

36:01 Where can people find more about you and BVNK? Uh, you can find us at bvnk.com, and you can find me at LinkedIn under Chris Harms. Um, I'm mostly active there. And, um, yeah. It's been great, Marc. Thanks for having me.

36:13 [upbeat music]