March 11, 2026
QED Panel: Will stablecoins disrupt global finance?
Transcript
00:02:07 Bill Cilluffo
Thank you to all of you for joining.
00:02:09 Bill Cilluffo
I’m sure more will continue to join as we go.
00:02:12 Bill Cilluffo
I’m Bill Cilluffo, a partner and head of early-stage investments at QED.
00:02:17 Bill Cilluffo
QED Investors is the leading global fintech investment firm, investing for about seventeen years in all aspects of fintech around the world.
00:02:26 Bill Cilluffo
And this is the Fintech Investor Series, where we talk to industry experts to break down the most important topics in global fintech.
00:02:34 Bill Cilluffo
And today, we’re going to be talking about stablecoins.
00:02:39 Bill Cilluffo
There are lots of different aspects of stablecoins.
00:02:41 Bill Cilluffo
As we were planning out today’s session, we realized there was no way we could cover everything we wanted to cover in just one session.
00:02:48 Bill Cilluffo
So consider this the kind of survey course, if you will.
00:02:52 Bill Cilluffo
We will touch on a couple of high-level topics and then almost certainly tee up subsequent pieces on stablecoins.
00:03:00 Bill Cilluffo
So I would love to introduce probably our two most prominent in-house experts on the topic.
00:03:06 Bill Cilluffo
I wonder if you guys could introduce yourselves to the audience.
00:03:09 Bill Cilluffo
Adams, why don’t we start with you?
00:03:12 Adams Conrad
It’s a pleasure to be here. Thank you, Bill.
00:03:14 Adams Conrad
I am a principal focused on all things stablecoins.
00:03:18 Adams Conrad
Could not be more excited to talk about this topic.
00:03:22 Adams Conrad
Gbenga and I spend just about every waking moment thinking, working on, and exploring companies being built in this space.
00:03:30 Adams Conrad
I’ve been with QED for about five years, and prior to that was with Quovo, and then joined Plaid as a part of that acquisition.
00:03:38 Adams Conrad
So coming at this from the infrastructure perspective first and foremost, which I think is a really interesting place to sit and a place to view this space.
00:03:47 Adams Conrad
Venkat?
00:03:49 Gbenga Ajayi
Nice to meet everyone. My name is Gbenga Ajayi.
00:03:51 Gbenga Ajayi
I’m a partner here at QED, and I lead our Middle East and Africa part of the business, which I think is very essential to this stablecoin story, as a lot of the adoption we’re seeing is happening in emerging markets.
00:04:04 Gbenga Ajayi
I’ve been at QED for, I think, just over four years now.
00:04:09 Gbenga Ajayi
Before that, I was at TransferWise, now called Wise and at Revolut.
00:04:13 Gbenga Ajayi
So, you know, I’ve kind of been part of what I call “Cross-border 2.0,” and then we’re now at “3.0.”
00:04:20 Gbenga Ajayi
And before that, I spent quite a long time at Google building consumer products.
00:04:25 Gbenga Ajayi
Great to be here and looking forward to talking about it.
00:04:28 Bill Cilluffo
That’s great. Thanks, guys.
00:04:30 Bill Cilluffo
As we get started, just a couple quick housekeeping topics.
00:04:34 Bill Cilluffo
Rachel posted a link into the chat, so if you’re not on our mailing list and you’d like to be, please go ahead and click that link and add your email address to it.
00:04:42 Bill Cilluffo
Also, we have this chat going. So if you have any questions for us, feel free to enter them into the chat.
00:04:49 Bill Cilluffo
We think we’ll be pretty limited on questions. We got a number ahead of time, and we’ll kind of look through and see if there’s the opportunity to answer as we go.
00:04:57 Bill Cilluffo
But if not, we can probably follow up afterwards and answer some of the questions that you guys have.
00:05:03 Bill Cilluffo
So, look, we chose stablecoins because we think that’s one of the biggest opportunities for fintech innovation today.
00:05:11 Bill Cilluffo
There are clearly several uses for stablecoins. We’ll touch on several of them.
00:05:15 Bill Cilluffo
The most prominent of which so far is enabling cross-border money movement in a much cheaper, faster, more effective way—particularly when one half of the trade involves emerging markets.
00:05:28 Bill Cilluffo
But that’s one of many potential use cases that we’ll start to dive into—just the one that’s been probably most ready for prime time so far.
00:05:37 Bill Cilluffo
So again, and as I said, this probably will be the first of several sessions that we wind up doing, given how deep the topic is and how quickly it’s evolving.
00:05:48 Bill Cilluffo
So let’s start off, Adams, with you. What are stablecoins?
00:05:53 Bill Cilluffo
We’ll start sort of with the high level and then drill in from there.
00:05:57 Adams Conrad
Yeah. So stablecoins mean a lot of different things and can do a lot of different things across a lot of different use cases.
00:06:05 Adams Conrad
I might start us off with a bit of a landscape map and sketch out how we think about the opportunity here at QED.
00:06:14 Adams Conrad
And really, it’s a multi-layer cake.
00:06:16 Adams Conrad
So if we start at the very top, we’ve got the application layer.
00:06:19 Adams Conrad
These are folks that are enabling consumers and businesses to interact with stablecoins and use them to do things—be that save, earn, spend, send.
00:06:33 Adams Conrad
And we’re seeing lots of opportunities up and down the stack in every region of the world at the application layer.
00:06:41 Adams Conrad
Earlier this week, we announced an investment in Cast that we’re quite excited about.
00:06:46 Adams Conrad
Felix Pago is another one that we’re quite excited about that sits at that application layer and really enables people to use stablecoins.
00:06:53 Adams Conrad
And then sometimes, excitingly, consumers don’t even realize they’re necessarily using stablecoins.
00:06:58 Adams Conrad
We can touch more on that later.
00:07:01 Adams Conrad
When we go down this stack, we get to the orchestration layer.
00:07:04 Adams Conrad
These are the folks that make this all possible. They connect the dots.
00:07:09 Adams Conrad
Working with blockchain technology is hard and complex from a technological perspective.
00:07:14 Adams Conrad
It’s also complex from a regulatory perspective.
00:07:16 Adams Conrad
That orchestration layer is often the part of the stack that connects the dots from the technical side, from the regulatory side, and makes this all possible.
00:07:27 Adams Conrad
We’re investors in Cedar and Caliza, both doing great work here.
00:07:33 Adams Conrad
Now, one layer further down the stack, we’ve got a couple of different true building blocks when we talk about the infrastructure piece of this.
00:07:43 Adams Conrad
So we’ve got our wallets. These are the folks that custody assets on consumers’and businesses’ behalf.
00:07:52 Adams Conrad
We’ve got our liquidity layer. These are the folks that make moving on and off chain possible.
00:07:58 Adams Conrad
There are also those that make it possible to move between various currencieswhile on chain.
00:08:04 Adams Conrad
And then we have our issuers. These are the folks that are issuing stablecoins.
00:08:11 Adams Conrad
Notably, this is USDC and USDT—Circle having USDC and Tether having USDT.
00:08:18 Adams Conrad
Those are the predominant stablecoins that we see being used today—both US dollar denominated.
00:08:22 Adams Conrad
Both using some combination of currency and short-duration products to build what is effectively a narrow bank, and use the stablecoin technology and blockchain technology to digitize US dollars.
00:08:43 Adams Conrad
And then finally, underpinning all of this—making all of this possible—are theL1s, or the blockchain layer.
00:08:51 Adams Conrad
In this area, you see folks like Ethereum, Solana, Tron—all of which are critical and foundational components of making stablecoins possible.
00:09:03 Adams Conrad
One quick note that sometimes is a bit confusing: ETH is the currency and thenative currency used to pay to use the Ethereum blockchain.
00:09:14 Adams Conrad
There are many stablecoins on all of these various blockchains.
00:09:19 Adams Conrad
So you can have USDC on Ethereum, in which you would use ETH to move the USDCon that blockchain.
00:09:27 Adams Conrad
You could have USDT on Ethereum, or you could have USDT on Solana.
00:09:32 Adams Conrad
And in the instance of Solana, of course, you’d use SOL to move the USDT back and forth.
00:09:38 Adams Conrad
So hopefully that sketches out how we see the world, and also creates some segmentation and differentiation across what all these things are.
00:09:51 Adams Conrad
I know some of us look at this world and say, “Wait—what’s Bitcoin? Where does that fall into this world?”
00:09:59 Adams Conrad
And the short answer is: it kind of doesn’t.
00:10:01 Adams Conrad
These are various systems all using blockchain technology, but in very different ways.
00:10:07 Adams Conrad
And really what we’re excited about is where the rubber meets the road.
00:10:12 Adams Conrad
And that’s what we’re starting to see in stablecoins—built, to your point, specifically when it comes to international money movement, specifically in emerging markets, across exotic currency pairs.
00:10:24 Bill Cilluffo
Cool. Thanks, Adams.
00:10:25 Bill Cilluffo
And just to comment on one place you started: in today’s session, we are specifically going to be discussing US dollar-denominated stablecoins.
00:10:34 Bill Cilluffo
And safe to say that’s probably 95%+ of the use cases out there.
00:10:39 Bill Cilluffo
Maybe 99%+ are US dollar denominated.
00:10:43 Bill Cilluffo
There are starting to be other currency-denominated stablecoins that do have interesting use cases in smaller niche areas and may grow over time.
00:10:51 Bill Cilluffo
We’re probably not going to cover those today—maybe a future session.
00:10:54 Bill Cilluffo
But everything we’re talking about today is basically USDC and USDT-related—things denominated in US dollars.
00:11:04 Bill Cilluffo
So, Gbenga—thanks, Adams, for the overview.
00:11:08 Bill Cilluffo
Gbenga, I wonder if you can talk about the adoption rate—what’s the scale of this, where is it going, what’s happening right now?
00:11:18 Gbenga Ajayi
Yeah. Thanks, Bill.
00:11:19 Gbenga Ajayi
I think a good place to start is I’ll talk about three different numbers to give listeners an idea of what the scale is.
00:11:27 Gbenga Ajayi
The first number is $10,000,000,000,000.
00:11:31 Gbenga Ajayi
That sounds like a very big number, because it is.
00:11:34 Gbenga Ajayi
What is $10,000,000,000,000?
00:11:36 Gbenga Ajayi
$10,000,000,000,000 is the monthly volume of US dollar stablecoins, as you said, Bill, that we’ll see across the networks.
00:11:46 Gbenga Ajayi
It has to be said—because the data is very messy around exactly the adoption numbers here—that $10,000,000,000,000 is not necessarily all the real-world value of transactions that’s happening.
00:12:00 Gbenga Ajayi
A lot of that data is going to be skewed toward bots, activity, and on-chain transfers, and a bunch of other things.
00:12:08 Gbenga Ajayi
But just the volume of that is $10,000,000,000,000.
00:12:10 Gbenga Ajayi
Depending on who you ask, the real-world transaction volume of that is fifteen, twenty, thirty percent.
00:12:18 Gbenga Ajayi
But let that sink in: we have a technology here that is supporting $10,000,000,000,000 of volume already today.
00:12:27 Gbenga Ajayi
And if that doesn’t represent mostly real-world activity, it will in the near future.
00:12:33 Gbenga Ajayi
To give people context, I think Visa processes about $16,000,000,000,000 a year.
00:12:40 Gbenga Ajayi
So this is something that is rivaling that—actually bigger than that.
00:12:44 Gbenga Ajayi
So that’s the first number, to give you a sense of how big this is.
00:12:48 Gbenga Ajayi
The second number that I find particularly interesting is 250,000,000.
00:12:54 Gbenga Ajayi
Again, depending on who you ask, that number could be 300,000,000; it could be 312; it could be something else.
00:13:00 Gbenga Ajayi
But that is the number of unique sending addresses that we had on the network last year.
00:13:07 Gbenga Ajayi
What does that mean?
00:13:08 Gbenga Ajayi
If you think of stablecoins—I'm oversimplifying here—as some sort of money that moves around, the addresses are like bank accounts.
00:13:17 Gbenga Ajayi
Essentially, the different wallets on the network that were sending stablecoins.
00:13:27 Gbenga Ajayi
Again, this doesn’t mean 250,000,000 people, because, as we very well know, one person might have two accounts.
00:13:34 Gbenga Ajayi
In every country where I have a bank account, I have at least two bank accounts.
00:13:38 Gbenga Ajayi
So that could be 100,000,000 people, or it could be 80,000,000 people, but it’s 250,000,000 unique sending addresses.
00:13:46 Gbenga Ajayi
That is more than the population of any country in Europe—certainly more than the UK, where I live.
00:13:51 Gbenga Ajayi
It is more than the population of Brazil.
00:13:54 Gbenga Ajayi
I think there may be only a few countries in the world that have a higher population than the unique sending addresses we have on stablecoins.
00:13:59 Gbenga Ajayi
So that’s another view.
00:14:02 Gbenga Ajayi
And then I think the last number that is very interesting to me here is 150,000,000,000.
00:14:07 Gbenga Ajayi
That is the combined amount of US treasuries that USDC and USDT actually own.
00:14:16 Gbenga Ajayi
If you look at how much treasuries they actually own, that’s $150,000,000,000.
00:14:22 Gbenga Ajayi
Now that is US treasuries that is demanded by consumers in Nigeria, in Turkey, in Argentina, in Mexico, and—
00:14:33 Gbenga Ajayi
That’s volume. That’s not demand coming from a central bank.
00:14:38 Gbenga Ajayi
Indeed, that is more than the central bank of Germany or South Korea owns of U.S. Treasuries.
00:14:43 Gbenga Ajayi
This is distributed across millions of users across these markets.
00:14:48 Gbenga Ajayi
That’s to give you a sense of how distributed and how wide-scale the adoption is.
00:14:54 Bill Cilluffo
That’s fascinating.
00:14:57 Bill Cilluffo
So it’s clear that these uses are accelerating. Those are pretty eye-poppingnumbers.
00:15:01 Bill Cilluffo
I don’t think I’d heard that $10,000,000,000,000 number. That’s pretty staggering.
00:15:07 Bill Cilluffo
So clearly, the adoption’s accelerating—but who is really adopting this technology?
00:15:12 Bill Cilluffo
What are a handful of the everyday use cases that we’re seeing being super-prominent in the market today?
00:15:19 Gbenga Ajayi
Yeah. So there are two different use cases—or types.
00:15:25 Gbenga Ajayi
There are consumers, and then there are businesses.
00:15:29 Gbenga Ajayi
On the consumer front: what are people using this for?
00:15:33 Gbenga Ajayi
They’re using this to store, spend, and hopefully earn. We’ll talk about the earn part later.
00:15:40 Gbenga Ajayi
What is the use case?
00:15:42 Gbenga Ajayi
If you are somebody in Nigeria or Argentina, where you have a local economy that has high inflation and depreciation against the US dollar, you find yourself losing value by holding money.
00:15:57 Gbenga Ajayi
So what a lot of consumers started to do—and are doing—is either:
A) converting the local money they have…
00:16:05 Gbenga Ajayi
So I’ve got 10,000 naira. I’m going to convert that into stablecoins, and it remains the same six months from now, rather than losing 10%.
00:16:14 Gbenga Ajayi
And the same thing can be said for consumers in different parts of the world.
00:16:17 Gbenga Ajayi
Or: I need to earn, or I need to receive money.
00:16:20 Gbenga Ajayi
So rather than get Adam to send me the money back for the coffee you owe me from Starbucks a few weeks ago—rather than getting him to send me that money in US dollars to my account—he could just send me stablecoins so that I can use that money to pay somebody else, and then that stays in the chain.
00:16:36 Gbenga Ajayi
So that is the first use case we’re seeing on the adoption side.
00:16:40 Gbenga Ajayi
And what that’s leading to is this simultaneous on-ramp/off-ramp, high velocity of money.
00:16:48 Gbenga Ajayi
So you have consumers in different parts of the world—in China, in Nigeria, in Turkey—buying these stablecoins and selling these stablecoins.
00:16:58 Gbenga Ajayi
And this creates a velocity of money, which then leads to the second prominent use case, which you alluded to, Bill, which is cross-border.
00:17:06 Gbenga Ajayi
Basically, the use case that’s emerged—and it’s very exciting—is that we now have a lot of businesses that are able to help people move money across all these markets instantly on-chain and for a fraction of the price.
00:17:20 Gbenga Ajayi
I think people are saving up to 20–30% of transaction fees.
00:17:25 Gbenga Ajayi
To break that down: if I was in Nigeria today and I wanted to buy something in China as a business, how would I do it without stablecoins?
00:17:33 Gbenga Ajayi
I would go to my local bank. I would take in my 100,000 naira (and thereabouts)and say, “I need to get this money to China.”
00:17:40 Gbenga Ajayi
Then there will be five banks involved in that transaction, Bill.
00:17:43 Gbenga Ajayi
There’ll be two banks on the way. The money goes to New York, and then the NewYork guys would have to ping banks in China.
00:17:51 Gbenga Ajayi
This whole thing is done via SWIFT. We have five correspondent banks.
00:17:56 Gbenga Ajayi
That takes, at best, five days. It takes maybe seven days.
00:18:01 Gbenga Ajayi
Along the line, you have to pay fees on that transaction.
00:18:04 Gbenga Ajayi
Now stablecoins enter. You can take all of that out.
00:18:08 Gbenga Ajayi
You can abstract it, and you could basically get your money onto the network.
00:18:13 Gbenga Ajayi
And because of the velocity I spoke about before, that money is able to move relatively instantly.
00:18:19 Gbenga Ajayi
The impact on real businesses is that rather than wait seven days for your payment to clear—and have to pay another 12–15% of fees—you can save on your fees and get your payment done instantly.
00:18:35 Gbenga Ajayi
And that frees up working capital for businesses and allows them to start to grow.
00:18:39 Gbenga Ajayi
So this is a real-world impact that we are seeing.
00:18:42 Gbenga Ajayi
I spent time in Nigeria a month and a half ago, and I met a 26-year-old graphic designer who does work for companies around the world.
00:18:54 Gbenga Ajayi
We have a company in our portfolio called Raenest, which enables this.
00:18:59 Gbenga Ajayi
He gets paid in US dollars. Normally, you’d have to wait for the money to get to him in Nigeria.
00:19:06 Gbenga Ajayi
He would lose 7% in fees, but with stablecoins, all of that is instant.
00:19:10 Gbenga Ajayi
He can get paid into a wallet, and he can choose whether or not he wants to take that money into local currency.
00:19:16 Gbenga Ajayi
Or he can use it to pay for his Canva subscription the next day.
00:19:24 Adams Conrad
Gbenga, to your point, I think it’s worth underscoring how profound the implications are—especially when we think about the consumers.
00:19:32 Adams Conrad
If you’re used to the value of the money in your bank account or in your pocket going down day over day, and suddenly it doesn’t go down anymore…
00:19:57 Adams Conrad
Even just breaking that can have really big implications in how people believe money works.
00:20:05 Adams Conrad
If you fast forward ten years from now and tell someone, “Hey, for you to move money from Brazil to Nigeria, it’s going to take three days and cost you $30,”they’re going to look at you like you’re telling them the sky is green.
00:20:17 Adams Conrad
It’s going to break how they believe money works.
00:20:23 Adams Conrad
And I think that underscores one of the core primitives we’ve had looking at the space: the belief that every time we’ve had a new ledger, it changes how money works.
00:20:35 Adams Conrad
This time is no different. We have a new ledger here, and it will change how money works—which will change how people think about money.
00:20:42 Gbenga Ajayi
Correct. And there’s a bifurcation there as well, Adams.
00:20:45 Gbenga Ajayi
The cross-border part of this is really important because you’ve got PIX in Brazil, you’ve got the UK and India, and people can pay local merchants in those markets.
00:21:01 Gbenga Ajayi
Where it’s broken is more about when people want to pay international merchants, or send and receive money out of their local market.
00:21:07 Gbenga Ajayi
And it’s this orchestration of different real-time payments around the world.
00:21:14 Gbenga Ajayi
That’s where we’re starting to see a lot of interest and activity.
00:21:17 Gbenga Ajayi
In an increasingly global world, we share the view that a lot of people will potentially have money on-chain, and that on-chain will be how they do a lot of transactions.
00:21:29 Gbenga Ajayi
That is happening as merchant acceptance increases.
00:21:33 Gbenga Ajayi
You mentioned Cast, which we just invested in, which allows you to not necessarily switch your money from stablecoins but spend it on a Visa card if you wanted to.
00:21:41 Gbenga Ajayi
So I think the new era we’re entering here, Bill—and this is where we’re really getting excited—is that we’re starting to see the explosion of people having abifurcation: if I want to do anything outside of my local real-time payments, Ineed to have a wallet—a stablecoin wallet—to make that happen.
00:22:02 Gbenga Ajayi
And that’s a closed-loop/open-loop system that is emerging as an alternative to what we have today.
00:22:10 Gbenga Ajayi
It changes how you move money.
00:22:12 Bill Cilluffo
Hey, guys. Both of you have referenced the earn side of this equation, and there are a couple of questions popping in that relate to the earn side.
00:22:20 Bill Cilluffo
Adams, I wonder if you can chime in a little bit on how earn is working today and what some thoughts are on how this may evolve over time.
00:22:29 Adams Conrad
Yeah. So naturally, our expertise at QED is rooted in lending, so we couldn’t be more excited about where we believe we’re headed here.
00:22:39 Adams Conrad
The opportunity to see lending and stablecoins interact—and the other side of lending naturally is earning yield.
00:22:47 Adams Conrad
Today, most of the yield across the ecosystem is being captured by Tether and Circle.
00:22:54 Adams Conrad
They’re the owners of USDC and USDT.
00:22:58 Adams Conrad
For various reasons—some regulatory, some business-model and infrastructure-wise—that’s mostly how this ecosystem works today.
00:23:08 Adams Conrad
But we don’t necessarily believe that’s the end state.
00:23:11 Adams Conrad
The opportunity to start to earn yield on your deposits is core to financial ecosystems.
00:23:19 Adams Conrad
It’s one of the core beliefs of how both banking and, more broadly, capitalism works.
00:23:26 Adams Conrad
Lending is an equally important part of that.
00:23:30 Adams Conrad
One of the reasons we’re so excited about stablecoins—and maybe tokenization more broadly when we think about lending—is you can do things that you couldn’t do before.
00:23:42 Adams Conrad
Maybe let’s talk about a specific example here around factoring.
00:23:48 Adams Conrad
I can have perfect security by reaching into your wallet, cryptographically securing those assets—while keeping them in your wallet.
00:23:57 Adams Conrad
You continue to earn the yield and everything on that.
00:24:01 Adams Conrad
And then there’s a smart contract that governs the dynamics in the day that those cryptographically secured assets move from your wallet to mine.
00:24:11 Adams Conrad
That’s really what factoring is, but today we have to rely on trust.
00:24:16 Adams Conrad
We have to rely on intermediaries and various parties to facilitate those transactions.
00:24:23 Adams Conrad
Removing those intermediaries—as Gbenga alluded to earlier as we think about remittances—can have profound implications on the cost of factoring and, more importantly, the availability of factoring.
00:24:35 Adams Conrad
It’s such a powerful tool to bring revenue in for folks—and to bring what we often take for granted here in the US, which is a robust, very liquid, and active capital markets infrastructure—and see that exported and distributed globally.
00:24:53 Adams Conrad
I think there’s probably a similar example here when we think about EWA—a theme that’s near and dear to our hearts here at QED—earned wage access.
00:25:02 Adams Conrad
That’s kind of the consumer version of factoring, if you will.
00:25:06 Adams Conrad
You’re able to receive and get paid for the time you have worked—almost a human right at this point.
00:25:16 Adams Conrad
And stablecoins and smart contracts can allow us to do that in a much more seamless, much more elegant, and much cheaper way.
00:25:23 Adams Conrad
You can imagine someone—instead of getting paid for the day they worked—getting paid for the hour or the minute, and truly streaming income, because the cost of moving that money and the cost of securing that capital is so, so, so much lower.
00:25:41 Bill Cilluffo
Oh, that’s cool.
00:25:42 Bill Cilluffo
So, guys, we’re probably coming toward the end of the time we had blocked off.
00:25:48 Bill Cilluffo
But I wonder if we can have a last major topic around where this is going.
00:25:52 Bill Cilluffo
We’ve certainly seen some problems get pretty well solved so far in the industry.
00:25:57 Bill Cilluffo
Who knows if we’re at the end state or not?
00:25:59 Bill Cilluffo
There are probably problems no one even thought about yet that could be solved by this.
00:26:04 Bill Cilluffo
There’s plenty in between—problems that people are working on that haven’t quite been solved yet.
00:26:09 Bill Cilluffo
I wonder if you guys can each comment on things that excite you about what we’re seeing as well, down the path of solving, versus some things the industry hasn’t really started yet.
00:26:22 Gbenga Ajayi
Yeah, I can jump in here very quickly and also answer two questions that people are asking on the stream about disintermediating payment networks.
00:26:32 Gbenga Ajayi
One thing has become very evident over the last year to eighteen months: I don’t think it’s a question of either/or.
00:26:40 Gbenga Ajayi
Adams and I always joke that we’re going to live in a hybrid world where this lives alongside what we already have.
00:26:49 Gbenga Ajayi
And what we’re already seeing—in the case of payment networks or merchant acquirers—is that this is complementary to what they have.
00:26:56 Gbenga Ajayi
We have a merchant acquirer company called Stax Africa, for example, which now offers this as part of how they actually get money back to their clients.
00:27:05 Gbenga Ajayi
So this is becoming something that people will have in addition to existing rails.
00:27:10 Gbenga Ajayi
So I think that’s exciting—that’s already getting solved.
00:27:14 Gbenga Ajayi
I think one big area is where Adams talked about yield.
00:27:18 Gbenga Ajayi
Today, a lot of consumers don’t earn yield on stablecoins because most of that goes to the issuers, who hold the treasuries and have the yield.
00:27:32 Gbenga Ajayi
I think that’s going to be a battleground in the future: how people actually get yield on stablecoins, but also build additional real-world solutions.
00:27:46 Gbenga Ajayi
Maybe it’s lending, maybe it’s smart contracts, maybe it’s mortgages—whatever.
00:27:50 Gbenga Ajayi
There are all these other things we do in our everyday life that I think—getting those applications to include stablecoins—will be very interesting going forward.
00:28:01 Gbenga Ajayi
So think of everything else that we have to do: this is now going to be a part of it.
00:28:06 Gbenga Ajayi
So it’s not an either/or.
00:28:08 Gbenga Ajayi
I think it’s a question of how this becomes part of what we have to do across our finances.
00:28:13 Gbenga Ajayi
And I think those use cases are starting to emerge, and that’s where there’s a lot of excitement.
00:28:20 Gbenga Ajayi
Cool.
00:28:21 Adams Conrad
Yeah. To build on that, Gbenga: you touched on the acquiring side of the equation.
00:28:28 Adams Conrad
We’ve seen a lot of folks building on the issuing side—Raenest and Reap, notably.
00:28:35 Adams Conrad
And we’re seeing more and more folks building on the acquiring side.
00:28:38 Adams Conrad
We’ve got several portfolio companies stacked on this.
00:28:40 Adams Conrad
Blackbird here in the US is one of them—building a merchant acquiring business for restaurants that enables stablecoin acceptance.
00:28:50 Adams Conrad
So very excited about all things where the rubber meets the road.
00:28:57 Adams Conrad
As you touched on, Gbenga, lending is a big piece of this.
00:29:01 Adams Conrad
And then maybe the final note that I’ll bring up is how banks—and the roles that banks play—interact with stablecoins.
00:29:09 Adams Conrad
Bill, I think at the last Money 2020, you and I were chatting about how often that topic was coming up.
00:29:15 Adams Conrad
It is very much top of mind for banks as they think about their deposits and their own lending.
00:29:21 Adams Conrad
And I have no doubt that banks will play an important role in the future of stablecoins and in the future of money—just as they do today.
00:29:33 Adams Conrad
Now, that role will look a lot different than it does today—but that’s probably a topic for a future conversation.
00:29:40 Bill Cilluffo
Yeah. And I know there’s a question that came in around disintermediation as you’re able to get yield on your stablecoins.
00:29:45 Bill Cilluffo
If I was a bank, I’d be quite worried about that.
00:29:48 Bill Cilluffo
Again, banks have deposits that are orders of magnitude larger than the total stock of stablecoins today.
00:29:54 Bill Cilluffo
So it’s not going to blow up banks’ deposits overnight.
00:29:57 Bill Cilluffo
But over time, it can certainly chip away.
00:30:00 Bill Cilluffo
I would imagine it’ll hurt their ability to get stores of international currency as people can just keep it in this and use it over time.
00:30:08 Bill Cilluffo
I wonder if we can spend two minutes on one final topic, which I think is both fascinating and was one of the questions that came in—and maybe a teaser for a future session, because there’s no way we could cover all of it.
00:30:19 Bill Cilluffo
The question is: what are stablecoins’ advantages as it relates to agentic payments?
00:30:25 Bill Cilluffo
In the world of what founders could be building toward, there are probably 28 aspects of agentic payments founders could be building toward.
00:30:33 Bill Cilluffo
But I know one of the things that could be in the mix is the use of blockchains more broadly—maybe stablecoins more narrowly.
00:30:42 Bill Cilluffo
Adam, a minute or two on that—and maybe it’s more of a teaser for a future episode.
00:30:48 Adams Conrad
I think this would be a fun topic to dig into in the future.
00:30:55 Adams Conrad
And while we do our best at QED to avoid playing buzzword bingo, there really is an interesting convergence here.
00:31:02 Adams Conrad
Smart contracts are a series of rules that govern how money can work.
00:31:09 Adams Conrad
Those rules are actually pretty complicated for humans to read and understand, but they’re very easy for agents to read and understand.
00:31:17 Adams Conrad
One of the most fascinating dynamics here is you can imagine a world where your agent plays the game of commerce just as your agent might play the game of Go, which is very different from how a consumer might play the game.
00:31:33 Adams Conrad
Having an agent that can hallucinate becomes a feature rather than a flaw.
00:31:38 Adams Conrad
Having an agent that can dream and be creative and come up with different ways of doing things is kind of the whole reason to have agents.
00:31:46 Adams Conrad
I’m perfectly capable of buying things on Amazon myself, but maybe there’s a creative way of buying that thing.
00:31:54 Adams Conrad
Maybe there’s a sale somewhere else on the internet that I just wasn’t aware of.
00:31:58 Adams Conrad
Having an agent comb through every website to see if those shoes are on sale anywhere is pretty powerful—and it’s not something I’m going to do myself.
00:32:07 Adams Conrad
But having an agent that is creative enough is a good thing.
00:32:12 Adams Conrad
However, to mirror that hallucination, we need deterministic systems.
00:32:17 Adams Conrad
We need systems that have strict guardrails, and that’s exactly what smart contracts provide.
00:32:22 Adams Conrad
Very strict governance, very strict rules that determine how and when money can be spent.
00:32:28 Adams Conrad
And those rules are enforceable, verifiable, and understood by computers even better than they are by humans.
00:32:38 Adams Conrad
And that combination creates a really interesting yin and yang of hallucination and deterministic systems.
00:32:45 Gbenga Ajayi
And if I can jump in there, Bill: one of the exciting talks in AI/agente-commerce land is about—at least in the near term—authorization.
00:32:58 Gbenga Ajayi
When agents are able to make purchases on your behalf, there needs to be authorization.
00:33:03 Gbenga Ajayi
How do you authorize the agent to make that payment?
00:33:07 Gbenga Ajayi
How can the agent make that payment?
00:33:08 Gbenga Ajayi
Does it have access to all of your bank account?
00:33:10 Gbenga Ajayi
Does it have access to just a small pool of capital?
00:33:12 Gbenga Ajayi
Is that a card? Is that a wallet?
00:33:15 Gbenga Ajayi
What happens when an agent receives money on the other side?
00:33:18 Gbenga Ajayi
What happens when there’s a dispute?
00:33:20 Gbenga Ajayi
How do you know where the money has gone?
00:33:22 Gbenga Ajayi
Is it real time?
00:33:23 Gbenga Ajayi
There are all of these very exciting questions being asked in agent e-commerceland.
00:33:29 Gbenga Ajayi
And whichever way you go—whether you go the UPI route or—
00:33:35 Gbenga Ajayi
It becomes very clear that stablecoins are a better way to potentially get agents to spend money than fiat money sitting in bank accounts that has to go through credit cards or debit cards or different things.
00:33:47 Gbenga Ajayi
It becomes very clear that all of these questions I’m asking—and that people are asking—stablecoins could actually solve without trying.
00:33:55 Gbenga Ajayi
Now, there are some things that still need to happen, because we like our credit cards.
00:33:59 Gbenga Ajayi
We like our rewards. What happens in terms of those?
00:34:02 Gbenga Ajayi
So again, we might need to mimic some of the non-stablecoin-type things.
00:34:08 Gbenga Ajayi
But if I had to make a prediction, stablecoins are probably a much better native way for agents—especially when it comes to cross-border transactions—than fiat.
00:34:21 Bill Cilluffo
Cool. Well, look—we will leave it there.
00:34:24 Bill Cilluffo
Gbenga, your last speech is probably why agentic commerce hasn’t really taken off yet—because of the list three times as long as what you just mentioned of the things that need to be sorted out to make it happen.
00:34:35 Bill Cilluffo
But it’s clearly a matter of when, not if, and a matter of what the various technologies are—certainly the stablecoin space could be one.
00:34:45 Bill Cilluffo
So look, we really appreciate all of you joining in. Thanks for all the questions.
00:34:49 Bill Cilluffo
We tried to answer some of them. We’ve got a long list of ones we didn’t get to.
00:34:54 Bill Cilluffo
If you’d like to join the mailing list for future episodes, there’s a link in the chat posted by Rachel.
00:35:01 Bill Cilluffo
Please click on the link and give us your emails.
00:35:03 Bill Cilluffo
Otherwise, keep following our LinkedIn channel. We’ll be posting them there.
00:35:06 Bill Cilluffo
And I would imagine we’ll be having several more sessions on stablecoins—probably many more on various aspects of AI as it relates to fintech, and other topics.
00:35:18 Bill Cilluffo
So thanks so much for joining, and have a great afternoon.
00:35:22 Gbenga Ajayi
Thank you, everyone.
00:35:23 Gbenga Ajayi
Thank you.
Transcript
00:02:07 Bill Cilluffo
Thank you to all of you for joining.
00:02:09 Bill Cilluffo
I’m sure more will continue to join as we go.
00:02:12 Bill Cilluffo
I’m Bill Cilluffo, a partner and head of early-stage investments at QED.
00:02:17 Bill Cilluffo
QED Investors is the leading global fintech investment firm, investing for about seventeen years in all aspects of fintech around the world.
00:02:26 Bill Cilluffo
And this is the Fintech Investor Series, where we talk to industry experts to break down the most important topics in global fintech.
00:02:34 Bill Cilluffo
And today, we’re going to be talking about stablecoins.
00:02:39 Bill Cilluffo
There are lots of different aspects of stablecoins.
00:02:41 Bill Cilluffo
As we were planning out today’s session, we realized there was no way we could cover everything we wanted to cover in just one session.
00:02:48 Bill Cilluffo
So consider this the kind of survey course, if you will.
00:02:52 Bill Cilluffo
We will touch on a couple of high-level topics and then almost certainly tee up subsequent pieces on stablecoins.
00:03:00 Bill Cilluffo
So I would love to introduce probably our two most prominent in-house experts on the topic.
00:03:06 Bill Cilluffo
I wonder if you guys could introduce yourselves to the audience.
00:03:09 Bill Cilluffo
Adams, why don’t we start with you?
00:03:12 Adams Conrad
It’s a pleasure to be here. Thank you, Bill.
00:03:14 Adams Conrad
I am a principal focused on all things stablecoins.
00:03:18 Adams Conrad
Could not be more excited to talk about this topic.
00:03:22 Adams Conrad
Gbenga and I spend just about every waking moment thinking, working on, and exploring companies being built in this space.
00:03:30 Adams Conrad
I’ve been with QED for about five years, and prior to that was with Quovo, and then joined Plaid as a part of that acquisition.
00:03:38 Adams Conrad
So coming at this from the infrastructure perspective first and foremost, which I think is a really interesting place to sit and a place to view this space.
00:03:47 Adams Conrad
Venkat?
00:03:49 Gbenga Ajayi
Nice to meet everyone. My name is Gbenga Ajayi.
00:03:51 Gbenga Ajayi
I’m a partner here at QED, and I lead our Middle East and Africa part of the business, which I think is very essential to this stablecoin story, as a lot of the adoption we’re seeing is happening in emerging markets.
00:04:04 Gbenga Ajayi
I’ve been at QED for, I think, just over four years now.
00:04:09 Gbenga Ajayi
Before that, I was at TransferWise, now called Wise and at Revolut.
00:04:13 Gbenga Ajayi
So, you know, I’ve kind of been part of what I call “Cross-border 2.0,” and then we’re now at “3.0.”
00:04:20 Gbenga Ajayi
And before that, I spent quite a long time at Google building consumer products.
00:04:25 Gbenga Ajayi
Great to be here and looking forward to talking about it.
00:04:28 Bill Cilluffo
That’s great. Thanks, guys.
00:04:30 Bill Cilluffo
As we get started, just a couple quick housekeeping topics.
00:04:34 Bill Cilluffo
Rachel posted a link into the chat, so if you’re not on our mailing list and you’d like to be, please go ahead and click that link and add your email address to it.
00:04:42 Bill Cilluffo
Also, we have this chat going. So if you have any questions for us, feel free to enter them into the chat.
00:04:49 Bill Cilluffo
We think we’ll be pretty limited on questions. We got a number ahead of time, and we’ll kind of look through and see if there’s the opportunity to answer as we go.
00:04:57 Bill Cilluffo
But if not, we can probably follow up afterwards and answer some of the questions that you guys have.
00:05:03 Bill Cilluffo
So, look, we chose stablecoins because we think that’s one of the biggest opportunities for fintech innovation today.
00:05:11 Bill Cilluffo
There are clearly several uses for stablecoins. We’ll touch on several of them.
00:05:15 Bill Cilluffo
The most prominent of which so far is enabling cross-border money movement in a much cheaper, faster, more effective way—particularly when one half of the trade involves emerging markets.
00:05:28 Bill Cilluffo
But that’s one of many potential use cases that we’ll start to dive into—just the one that’s been probably most ready for prime time so far.
00:05:37 Bill Cilluffo
So again, and as I said, this probably will be the first of several sessions that we wind up doing, given how deep the topic is and how quickly it’s evolving.
00:05:48 Bill Cilluffo
So let’s start off, Adams, with you. What are stablecoins?
00:05:53 Bill Cilluffo
We’ll start sort of with the high level and then drill in from there.
00:05:57 Adams Conrad
Yeah. So stablecoins mean a lot of different things and can do a lot of different things across a lot of different use cases.
00:06:05 Adams Conrad
I might start us off with a bit of a landscape map and sketch out how we think about the opportunity here at QED.
00:06:14 Adams Conrad
And really, it’s a multi-layer cake.
00:06:16 Adams Conrad
So if we start at the very top, we’ve got the application layer.
00:06:19 Adams Conrad
These are folks that are enabling consumers and businesses to interact with stablecoins and use them to do things—be that save, earn, spend, send.
00:06:33 Adams Conrad
And we’re seeing lots of opportunities up and down the stack in every region of the world at the application layer.
00:06:41 Adams Conrad
Earlier this week, we announced an investment in Cast that we’re quite excited about.
00:06:46 Adams Conrad
Felix Pago is another one that we’re quite excited about that sits at that application layer and really enables people to use stablecoins.
00:06:53 Adams Conrad
And then sometimes, excitingly, consumers don’t even realize they’re necessarily using stablecoins.
00:06:58 Adams Conrad
We can touch more on that later.
00:07:01 Adams Conrad
When we go down this stack, we get to the orchestration layer.
00:07:04 Adams Conrad
These are the folks that make this all possible. They connect the dots.
00:07:09 Adams Conrad
Working with blockchain technology is hard and complex from a technological perspective.
00:07:14 Adams Conrad
It’s also complex from a regulatory perspective.
00:07:16 Adams Conrad
That orchestration layer is often the part of the stack that connects the dots from the technical side, from the regulatory side, and makes this all possible.
00:07:27 Adams Conrad
We’re investors in Cedar and Caliza, both doing great work here.
00:07:33 Adams Conrad
Now, one layer further down the stack, we’ve got a couple of different true building blocks when we talk about the infrastructure piece of this.
00:07:43 Adams Conrad
So we’ve got our wallets. These are the folks that custody assets on consumers’and businesses’ behalf.
00:07:52 Adams Conrad
We’ve got our liquidity layer. These are the folks that make moving on and off chain possible.
00:07:58 Adams Conrad
There are also those that make it possible to move between various currencieswhile on chain.
00:08:04 Adams Conrad
And then we have our issuers. These are the folks that are issuing stablecoins.
00:08:11 Adams Conrad
Notably, this is USDC and USDT—Circle having USDC and Tether having USDT.
00:08:18 Adams Conrad
Those are the predominant stablecoins that we see being used today—both US dollar denominated.
00:08:22 Adams Conrad
Both using some combination of currency and short-duration products to build what is effectively a narrow bank, and use the stablecoin technology and blockchain technology to digitize US dollars.
00:08:43 Adams Conrad
And then finally, underpinning all of this—making all of this possible—are theL1s, or the blockchain layer.
00:08:51 Adams Conrad
In this area, you see folks like Ethereum, Solana, Tron—all of which are critical and foundational components of making stablecoins possible.
00:09:03 Adams Conrad
One quick note that sometimes is a bit confusing: ETH is the currency and thenative currency used to pay to use the Ethereum blockchain.
00:09:14 Adams Conrad
There are many stablecoins on all of these various blockchains.
00:09:19 Adams Conrad
So you can have USDC on Ethereum, in which you would use ETH to move the USDCon that blockchain.
00:09:27 Adams Conrad
You could have USDT on Ethereum, or you could have USDT on Solana.
00:09:32 Adams Conrad
And in the instance of Solana, of course, you’d use SOL to move the USDT back and forth.
00:09:38 Adams Conrad
So hopefully that sketches out how we see the world, and also creates some segmentation and differentiation across what all these things are.
00:09:51 Adams Conrad
I know some of us look at this world and say, “Wait—what’s Bitcoin? Where does that fall into this world?”
00:09:59 Adams Conrad
And the short answer is: it kind of doesn’t.
00:10:01 Adams Conrad
These are various systems all using blockchain technology, but in very different ways.
00:10:07 Adams Conrad
And really what we’re excited about is where the rubber meets the road.
00:10:12 Adams Conrad
And that’s what we’re starting to see in stablecoins—built, to your point, specifically when it comes to international money movement, specifically in emerging markets, across exotic currency pairs.
00:10:24 Bill Cilluffo
Cool. Thanks, Adams.
00:10:25 Bill Cilluffo
And just to comment on one place you started: in today’s session, we are specifically going to be discussing US dollar-denominated stablecoins.
00:10:34 Bill Cilluffo
And safe to say that’s probably 95%+ of the use cases out there.
00:10:39 Bill Cilluffo
Maybe 99%+ are US dollar denominated.
00:10:43 Bill Cilluffo
There are starting to be other currency-denominated stablecoins that do have interesting use cases in smaller niche areas and may grow over time.
00:10:51 Bill Cilluffo
We’re probably not going to cover those today—maybe a future session.
00:10:54 Bill Cilluffo
But everything we’re talking about today is basically USDC and USDT-related—things denominated in US dollars.
00:11:04 Bill Cilluffo
So, Gbenga—thanks, Adams, for the overview.
00:11:08 Bill Cilluffo
Gbenga, I wonder if you can talk about the adoption rate—what’s the scale of this, where is it going, what’s happening right now?
00:11:18 Gbenga Ajayi
Yeah. Thanks, Bill.
00:11:19 Gbenga Ajayi
I think a good place to start is I’ll talk about three different numbers to give listeners an idea of what the scale is.
00:11:27 Gbenga Ajayi
The first number is $10,000,000,000,000.
00:11:31 Gbenga Ajayi
That sounds like a very big number, because it is.
00:11:34 Gbenga Ajayi
What is $10,000,000,000,000?
00:11:36 Gbenga Ajayi
$10,000,000,000,000 is the monthly volume of US dollar stablecoins, as you said, Bill, that we’ll see across the networks.
00:11:46 Gbenga Ajayi
It has to be said—because the data is very messy around exactly the adoption numbers here—that $10,000,000,000,000 is not necessarily all the real-world value of transactions that’s happening.
00:12:00 Gbenga Ajayi
A lot of that data is going to be skewed toward bots, activity, and on-chain transfers, and a bunch of other things.
00:12:08 Gbenga Ajayi
But just the volume of that is $10,000,000,000,000.
00:12:10 Gbenga Ajayi
Depending on who you ask, the real-world transaction volume of that is fifteen, twenty, thirty percent.
00:12:18 Gbenga Ajayi
But let that sink in: we have a technology here that is supporting $10,000,000,000,000 of volume already today.
00:12:27 Gbenga Ajayi
And if that doesn’t represent mostly real-world activity, it will in the near future.
00:12:33 Gbenga Ajayi
To give people context, I think Visa processes about $16,000,000,000,000 a year.
00:12:40 Gbenga Ajayi
So this is something that is rivaling that—actually bigger than that.
00:12:44 Gbenga Ajayi
So that’s the first number, to give you a sense of how big this is.
00:12:48 Gbenga Ajayi
The second number that I find particularly interesting is 250,000,000.
00:12:54 Gbenga Ajayi
Again, depending on who you ask, that number could be 300,000,000; it could be 312; it could be something else.
00:13:00 Gbenga Ajayi
But that is the number of unique sending addresses that we had on the network last year.
00:13:07 Gbenga Ajayi
What does that mean?
00:13:08 Gbenga Ajayi
If you think of stablecoins—I'm oversimplifying here—as some sort of money that moves around, the addresses are like bank accounts.
00:13:17 Gbenga Ajayi
Essentially, the different wallets on the network that were sending stablecoins.
00:13:27 Gbenga Ajayi
Again, this doesn’t mean 250,000,000 people, because, as we very well know, one person might have two accounts.
00:13:34 Gbenga Ajayi
In every country where I have a bank account, I have at least two bank accounts.
00:13:38 Gbenga Ajayi
So that could be 100,000,000 people, or it could be 80,000,000 people, but it’s 250,000,000 unique sending addresses.
00:13:46 Gbenga Ajayi
That is more than the population of any country in Europe—certainly more than the UK, where I live.
00:13:51 Gbenga Ajayi
It is more than the population of Brazil.
00:13:54 Gbenga Ajayi
I think there may be only a few countries in the world that have a higher population than the unique sending addresses we have on stablecoins.
00:13:59 Gbenga Ajayi
So that’s another view.
00:14:02 Gbenga Ajayi
And then I think the last number that is very interesting to me here is 150,000,000,000.
00:14:07 Gbenga Ajayi
That is the combined amount of US treasuries that USDC and USDT actually own.
00:14:16 Gbenga Ajayi
If you look at how much treasuries they actually own, that’s $150,000,000,000.
00:14:22 Gbenga Ajayi
Now that is US treasuries that is demanded by consumers in Nigeria, in Turkey, in Argentina, in Mexico, and—
00:14:33 Gbenga Ajayi
That’s volume. That’s not demand coming from a central bank.
00:14:38 Gbenga Ajayi
Indeed, that is more than the central bank of Germany or South Korea owns of U.S. Treasuries.
00:14:43 Gbenga Ajayi
This is distributed across millions of users across these markets.
00:14:48 Gbenga Ajayi
That’s to give you a sense of how distributed and how wide-scale the adoption is.
00:14:54 Bill Cilluffo
That’s fascinating.
00:14:57 Bill Cilluffo
So it’s clear that these uses are accelerating. Those are pretty eye-poppingnumbers.
00:15:01 Bill Cilluffo
I don’t think I’d heard that $10,000,000,000,000 number. That’s pretty staggering.
00:15:07 Bill Cilluffo
So clearly, the adoption’s accelerating—but who is really adopting this technology?
00:15:12 Bill Cilluffo
What are a handful of the everyday use cases that we’re seeing being super-prominent in the market today?
00:15:19 Gbenga Ajayi
Yeah. So there are two different use cases—or types.
00:15:25 Gbenga Ajayi
There are consumers, and then there are businesses.
00:15:29 Gbenga Ajayi
On the consumer front: what are people using this for?
00:15:33 Gbenga Ajayi
They’re using this to store, spend, and hopefully earn. We’ll talk about the earn part later.
00:15:40 Gbenga Ajayi
What is the use case?
00:15:42 Gbenga Ajayi
If you are somebody in Nigeria or Argentina, where you have a local economy that has high inflation and depreciation against the US dollar, you find yourself losing value by holding money.
00:15:57 Gbenga Ajayi
So what a lot of consumers started to do—and are doing—is either:
A) converting the local money they have…
00:16:05 Gbenga Ajayi
So I’ve got 10,000 naira. I’m going to convert that into stablecoins, and it remains the same six months from now, rather than losing 10%.
00:16:14 Gbenga Ajayi
And the same thing can be said for consumers in different parts of the world.
00:16:17 Gbenga Ajayi
Or: I need to earn, or I need to receive money.
00:16:20 Gbenga Ajayi
So rather than get Adam to send me the money back for the coffee you owe me from Starbucks a few weeks ago—rather than getting him to send me that money in US dollars to my account—he could just send me stablecoins so that I can use that money to pay somebody else, and then that stays in the chain.
00:16:36 Gbenga Ajayi
So that is the first use case we’re seeing on the adoption side.
00:16:40 Gbenga Ajayi
And what that’s leading to is this simultaneous on-ramp/off-ramp, high velocity of money.
00:16:48 Gbenga Ajayi
So you have consumers in different parts of the world—in China, in Nigeria, in Turkey—buying these stablecoins and selling these stablecoins.
00:16:58 Gbenga Ajayi
And this creates a velocity of money, which then leads to the second prominent use case, which you alluded to, Bill, which is cross-border.
00:17:06 Gbenga Ajayi
Basically, the use case that’s emerged—and it’s very exciting—is that we now have a lot of businesses that are able to help people move money across all these markets instantly on-chain and for a fraction of the price.
00:17:20 Gbenga Ajayi
I think people are saving up to 20–30% of transaction fees.
00:17:25 Gbenga Ajayi
To break that down: if I was in Nigeria today and I wanted to buy something in China as a business, how would I do it without stablecoins?
00:17:33 Gbenga Ajayi
I would go to my local bank. I would take in my 100,000 naira (and thereabouts)and say, “I need to get this money to China.”
00:17:40 Gbenga Ajayi
Then there will be five banks involved in that transaction, Bill.
00:17:43 Gbenga Ajayi
There’ll be two banks on the way. The money goes to New York, and then the NewYork guys would have to ping banks in China.
00:17:51 Gbenga Ajayi
This whole thing is done via SWIFT. We have five correspondent banks.
00:17:56 Gbenga Ajayi
That takes, at best, five days. It takes maybe seven days.
00:18:01 Gbenga Ajayi
Along the line, you have to pay fees on that transaction.
00:18:04 Gbenga Ajayi
Now stablecoins enter. You can take all of that out.
00:18:08 Gbenga Ajayi
You can abstract it, and you could basically get your money onto the network.
00:18:13 Gbenga Ajayi
And because of the velocity I spoke about before, that money is able to move relatively instantly.
00:18:19 Gbenga Ajayi
The impact on real businesses is that rather than wait seven days for your payment to clear—and have to pay another 12–15% of fees—you can save on your fees and get your payment done instantly.
00:18:35 Gbenga Ajayi
And that frees up working capital for businesses and allows them to start to grow.
00:18:39 Gbenga Ajayi
So this is a real-world impact that we are seeing.
00:18:42 Gbenga Ajayi
I spent time in Nigeria a month and a half ago, and I met a 26-year-old graphic designer who does work for companies around the world.
00:18:54 Gbenga Ajayi
We have a company in our portfolio called Raenest, which enables this.
00:18:59 Gbenga Ajayi
He gets paid in US dollars. Normally, you’d have to wait for the money to get to him in Nigeria.
00:19:06 Gbenga Ajayi
He would lose 7% in fees, but with stablecoins, all of that is instant.
00:19:10 Gbenga Ajayi
He can get paid into a wallet, and he can choose whether or not he wants to take that money into local currency.
00:19:16 Gbenga Ajayi
Or he can use it to pay for his Canva subscription the next day.
00:19:24 Adams Conrad
Gbenga, to your point, I think it’s worth underscoring how profound the implications are—especially when we think about the consumers.
00:19:32 Adams Conrad
If you’re used to the value of the money in your bank account or in your pocket going down day over day, and suddenly it doesn’t go down anymore…
00:19:57 Adams Conrad
Even just breaking that can have really big implications in how people believe money works.
00:20:05 Adams Conrad
If you fast forward ten years from now and tell someone, “Hey, for you to move money from Brazil to Nigeria, it’s going to take three days and cost you $30,”they’re going to look at you like you’re telling them the sky is green.
00:20:17 Adams Conrad
It’s going to break how they believe money works.
00:20:23 Adams Conrad
And I think that underscores one of the core primitives we’ve had looking at the space: the belief that every time we’ve had a new ledger, it changes how money works.
00:20:35 Adams Conrad
This time is no different. We have a new ledger here, and it will change how money works—which will change how people think about money.
00:20:42 Gbenga Ajayi
Correct. And there’s a bifurcation there as well, Adams.
00:20:45 Gbenga Ajayi
The cross-border part of this is really important because you’ve got PIX in Brazil, you’ve got the UK and India, and people can pay local merchants in those markets.
00:21:01 Gbenga Ajayi
Where it’s broken is more about when people want to pay international merchants, or send and receive money out of their local market.
00:21:07 Gbenga Ajayi
And it’s this orchestration of different real-time payments around the world.
00:21:14 Gbenga Ajayi
That’s where we’re starting to see a lot of interest and activity.
00:21:17 Gbenga Ajayi
In an increasingly global world, we share the view that a lot of people will potentially have money on-chain, and that on-chain will be how they do a lot of transactions.
00:21:29 Gbenga Ajayi
That is happening as merchant acceptance increases.
00:21:33 Gbenga Ajayi
You mentioned Cast, which we just invested in, which allows you to not necessarily switch your money from stablecoins but spend it on a Visa card if you wanted to.
00:21:41 Gbenga Ajayi
So I think the new era we’re entering here, Bill—and this is where we’re really getting excited—is that we’re starting to see the explosion of people having abifurcation: if I want to do anything outside of my local real-time payments, Ineed to have a wallet—a stablecoin wallet—to make that happen.
00:22:02 Gbenga Ajayi
And that’s a closed-loop/open-loop system that is emerging as an alternative to what we have today.
00:22:10 Gbenga Ajayi
It changes how you move money.
00:22:12 Bill Cilluffo
Hey, guys. Both of you have referenced the earn side of this equation, and there are a couple of questions popping in that relate to the earn side.
00:22:20 Bill Cilluffo
Adams, I wonder if you can chime in a little bit on how earn is working today and what some thoughts are on how this may evolve over time.
00:22:29 Adams Conrad
Yeah. So naturally, our expertise at QED is rooted in lending, so we couldn’t be more excited about where we believe we’re headed here.
00:22:39 Adams Conrad
The opportunity to see lending and stablecoins interact—and the other side of lending naturally is earning yield.
00:22:47 Adams Conrad
Today, most of the yield across the ecosystem is being captured by Tether and Circle.
00:22:54 Adams Conrad
They’re the owners of USDC and USDT.
00:22:58 Adams Conrad
For various reasons—some regulatory, some business-model and infrastructure-wise—that’s mostly how this ecosystem works today.
00:23:08 Adams Conrad
But we don’t necessarily believe that’s the end state.
00:23:11 Adams Conrad
The opportunity to start to earn yield on your deposits is core to financial ecosystems.
00:23:19 Adams Conrad
It’s one of the core beliefs of how both banking and, more broadly, capitalism works.
00:23:26 Adams Conrad
Lending is an equally important part of that.
00:23:30 Adams Conrad
One of the reasons we’re so excited about stablecoins—and maybe tokenization more broadly when we think about lending—is you can do things that you couldn’t do before.
00:23:42 Adams Conrad
Maybe let’s talk about a specific example here around factoring.
00:23:48 Adams Conrad
I can have perfect security by reaching into your wallet, cryptographically securing those assets—while keeping them in your wallet.
00:23:57 Adams Conrad
You continue to earn the yield and everything on that.
00:24:01 Adams Conrad
And then there’s a smart contract that governs the dynamics in the day that those cryptographically secured assets move from your wallet to mine.
00:24:11 Adams Conrad
That’s really what factoring is, but today we have to rely on trust.
00:24:16 Adams Conrad
We have to rely on intermediaries and various parties to facilitate those transactions.
00:24:23 Adams Conrad
Removing those intermediaries—as Gbenga alluded to earlier as we think about remittances—can have profound implications on the cost of factoring and, more importantly, the availability of factoring.
00:24:35 Adams Conrad
It’s such a powerful tool to bring revenue in for folks—and to bring what we often take for granted here in the US, which is a robust, very liquid, and active capital markets infrastructure—and see that exported and distributed globally.
00:24:53 Adams Conrad
I think there’s probably a similar example here when we think about EWA—a theme that’s near and dear to our hearts here at QED—earned wage access.
00:25:02 Adams Conrad
That’s kind of the consumer version of factoring, if you will.
00:25:06 Adams Conrad
You’re able to receive and get paid for the time you have worked—almost a human right at this point.
00:25:16 Adams Conrad
And stablecoins and smart contracts can allow us to do that in a much more seamless, much more elegant, and much cheaper way.
00:25:23 Adams Conrad
You can imagine someone—instead of getting paid for the day they worked—getting paid for the hour or the minute, and truly streaming income, because the cost of moving that money and the cost of securing that capital is so, so, so much lower.
00:25:41 Bill Cilluffo
Oh, that’s cool.
00:25:42 Bill Cilluffo
So, guys, we’re probably coming toward the end of the time we had blocked off.
00:25:48 Bill Cilluffo
But I wonder if we can have a last major topic around where this is going.
00:25:52 Bill Cilluffo
We’ve certainly seen some problems get pretty well solved so far in the industry.
00:25:57 Bill Cilluffo
Who knows if we’re at the end state or not?
00:25:59 Bill Cilluffo
There are probably problems no one even thought about yet that could be solved by this.
00:26:04 Bill Cilluffo
There’s plenty in between—problems that people are working on that haven’t quite been solved yet.
00:26:09 Bill Cilluffo
I wonder if you guys can each comment on things that excite you about what we’re seeing as well, down the path of solving, versus some things the industry hasn’t really started yet.
00:26:22 Gbenga Ajayi
Yeah, I can jump in here very quickly and also answer two questions that people are asking on the stream about disintermediating payment networks.
00:26:32 Gbenga Ajayi
One thing has become very evident over the last year to eighteen months: I don’t think it’s a question of either/or.
00:26:40 Gbenga Ajayi
Adams and I always joke that we’re going to live in a hybrid world where this lives alongside what we already have.
00:26:49 Gbenga Ajayi
And what we’re already seeing—in the case of payment networks or merchant acquirers—is that this is complementary to what they have.
00:26:56 Gbenga Ajayi
We have a merchant acquirer company called Stax Africa, for example, which now offers this as part of how they actually get money back to their clients.
00:27:05 Gbenga Ajayi
So this is becoming something that people will have in addition to existing rails.
00:27:10 Gbenga Ajayi
So I think that’s exciting—that’s already getting solved.
00:27:14 Gbenga Ajayi
I think one big area is where Adams talked about yield.
00:27:18 Gbenga Ajayi
Today, a lot of consumers don’t earn yield on stablecoins because most of that goes to the issuers, who hold the treasuries and have the yield.
00:27:32 Gbenga Ajayi
I think that’s going to be a battleground in the future: how people actually get yield on stablecoins, but also build additional real-world solutions.
00:27:46 Gbenga Ajayi
Maybe it’s lending, maybe it’s smart contracts, maybe it’s mortgages—whatever.
00:27:50 Gbenga Ajayi
There are all these other things we do in our everyday life that I think—getting those applications to include stablecoins—will be very interesting going forward.
00:28:01 Gbenga Ajayi
So think of everything else that we have to do: this is now going to be a part of it.
00:28:06 Gbenga Ajayi
So it’s not an either/or.
00:28:08 Gbenga Ajayi
I think it’s a question of how this becomes part of what we have to do across our finances.
00:28:13 Gbenga Ajayi
And I think those use cases are starting to emerge, and that’s where there’s a lot of excitement.
00:28:20 Gbenga Ajayi
Cool.
00:28:21 Adams Conrad
Yeah. To build on that, Gbenga: you touched on the acquiring side of the equation.
00:28:28 Adams Conrad
We’ve seen a lot of folks building on the issuing side—Raenest and Reap, notably.
00:28:35 Adams Conrad
And we’re seeing more and more folks building on the acquiring side.
00:28:38 Adams Conrad
We’ve got several portfolio companies stacked on this.
00:28:40 Adams Conrad
Blackbird here in the US is one of them—building a merchant acquiring business for restaurants that enables stablecoin acceptance.
00:28:50 Adams Conrad
So very excited about all things where the rubber meets the road.
00:28:57 Adams Conrad
As you touched on, Gbenga, lending is a big piece of this.
00:29:01 Adams Conrad
And then maybe the final note that I’ll bring up is how banks—and the roles that banks play—interact with stablecoins.
00:29:09 Adams Conrad
Bill, I think at the last Money 2020, you and I were chatting about how often that topic was coming up.
00:29:15 Adams Conrad
It is very much top of mind for banks as they think about their deposits and their own lending.
00:29:21 Adams Conrad
And I have no doubt that banks will play an important role in the future of stablecoins and in the future of money—just as they do today.
00:29:33 Adams Conrad
Now, that role will look a lot different than it does today—but that’s probably a topic for a future conversation.
00:29:40 Bill Cilluffo
Yeah. And I know there’s a question that came in around disintermediation as you’re able to get yield on your stablecoins.
00:29:45 Bill Cilluffo
If I was a bank, I’d be quite worried about that.
00:29:48 Bill Cilluffo
Again, banks have deposits that are orders of magnitude larger than the total stock of stablecoins today.
00:29:54 Bill Cilluffo
So it’s not going to blow up banks’ deposits overnight.
00:29:57 Bill Cilluffo
But over time, it can certainly chip away.
00:30:00 Bill Cilluffo
I would imagine it’ll hurt their ability to get stores of international currency as people can just keep it in this and use it over time.
00:30:08 Bill Cilluffo
I wonder if we can spend two minutes on one final topic, which I think is both fascinating and was one of the questions that came in—and maybe a teaser for a future session, because there’s no way we could cover all of it.
00:30:19 Bill Cilluffo
The question is: what are stablecoins’ advantages as it relates to agentic payments?
00:30:25 Bill Cilluffo
In the world of what founders could be building toward, there are probably 28 aspects of agentic payments founders could be building toward.
00:30:33 Bill Cilluffo
But I know one of the things that could be in the mix is the use of blockchains more broadly—maybe stablecoins more narrowly.
00:30:42 Bill Cilluffo
Adam, a minute or two on that—and maybe it’s more of a teaser for a future episode.
00:30:48 Adams Conrad
I think this would be a fun topic to dig into in the future.
00:30:55 Adams Conrad
And while we do our best at QED to avoid playing buzzword bingo, there really is an interesting convergence here.
00:31:02 Adams Conrad
Smart contracts are a series of rules that govern how money can work.
00:31:09 Adams Conrad
Those rules are actually pretty complicated for humans to read and understand, but they’re very easy for agents to read and understand.
00:31:17 Adams Conrad
One of the most fascinating dynamics here is you can imagine a world where your agent plays the game of commerce just as your agent might play the game of Go, which is very different from how a consumer might play the game.
00:31:33 Adams Conrad
Having an agent that can hallucinate becomes a feature rather than a flaw.
00:31:38 Adams Conrad
Having an agent that can dream and be creative and come up with different ways of doing things is kind of the whole reason to have agents.
00:31:46 Adams Conrad
I’m perfectly capable of buying things on Amazon myself, but maybe there’s a creative way of buying that thing.
00:31:54 Adams Conrad
Maybe there’s a sale somewhere else on the internet that I just wasn’t aware of.
00:31:58 Adams Conrad
Having an agent comb through every website to see if those shoes are on sale anywhere is pretty powerful—and it’s not something I’m going to do myself.
00:32:07 Adams Conrad
But having an agent that is creative enough is a good thing.
00:32:12 Adams Conrad
However, to mirror that hallucination, we need deterministic systems.
00:32:17 Adams Conrad
We need systems that have strict guardrails, and that’s exactly what smart contracts provide.
00:32:22 Adams Conrad
Very strict governance, very strict rules that determine how and when money can be spent.
00:32:28 Adams Conrad
And those rules are enforceable, verifiable, and understood by computers even better than they are by humans.
00:32:38 Adams Conrad
And that combination creates a really interesting yin and yang of hallucination and deterministic systems.
00:32:45 Gbenga Ajayi
And if I can jump in there, Bill: one of the exciting talks in AI/agente-commerce land is about—at least in the near term—authorization.
00:32:58 Gbenga Ajayi
When agents are able to make purchases on your behalf, there needs to be authorization.
00:33:03 Gbenga Ajayi
How do you authorize the agent to make that payment?
00:33:07 Gbenga Ajayi
How can the agent make that payment?
00:33:08 Gbenga Ajayi
Does it have access to all of your bank account?
00:33:10 Gbenga Ajayi
Does it have access to just a small pool of capital?
00:33:12 Gbenga Ajayi
Is that a card? Is that a wallet?
00:33:15 Gbenga Ajayi
What happens when an agent receives money on the other side?
00:33:18 Gbenga Ajayi
What happens when there’s a dispute?
00:33:20 Gbenga Ajayi
How do you know where the money has gone?
00:33:22 Gbenga Ajayi
Is it real time?
00:33:23 Gbenga Ajayi
There are all of these very exciting questions being asked in agent e-commerceland.
00:33:29 Gbenga Ajayi
And whichever way you go—whether you go the UPI route or—
00:33:35 Gbenga Ajayi
It becomes very clear that stablecoins are a better way to potentially get agents to spend money than fiat money sitting in bank accounts that has to go through credit cards or debit cards or different things.
00:33:47 Gbenga Ajayi
It becomes very clear that all of these questions I’m asking—and that people are asking—stablecoins could actually solve without trying.
00:33:55 Gbenga Ajayi
Now, there are some things that still need to happen, because we like our credit cards.
00:33:59 Gbenga Ajayi
We like our rewards. What happens in terms of those?
00:34:02 Gbenga Ajayi
So again, we might need to mimic some of the non-stablecoin-type things.
00:34:08 Gbenga Ajayi
But if I had to make a prediction, stablecoins are probably a much better native way for agents—especially when it comes to cross-border transactions—than fiat.
00:34:21 Bill Cilluffo
Cool. Well, look—we will leave it there.
00:34:24 Bill Cilluffo
Gbenga, your last speech is probably why agentic commerce hasn’t really taken off yet—because of the list three times as long as what you just mentioned of the things that need to be sorted out to make it happen.
00:34:35 Bill Cilluffo
But it’s clearly a matter of when, not if, and a matter of what the various technologies are—certainly the stablecoin space could be one.
00:34:45 Bill Cilluffo
So look, we really appreciate all of you joining in. Thanks for all the questions.
00:34:49 Bill Cilluffo
We tried to answer some of them. We’ve got a long list of ones we didn’t get to.
00:34:54 Bill Cilluffo
If you’d like to join the mailing list for future episodes, there’s a link in the chat posted by Rachel.
00:35:01 Bill Cilluffo
Please click on the link and give us your emails.
00:35:03 Bill Cilluffo
Otherwise, keep following our LinkedIn channel. We’ll be posting them there.
00:35:06 Bill Cilluffo
And I would imagine we’ll be having several more sessions on stablecoins—probably many more on various aspects of AI as it relates to fintech, and other topics.
00:35:18 Bill Cilluffo
So thanks so much for joining, and have a great afternoon.
00:35:22 Gbenga Ajayi
Thank you, everyone.
00:35:23 Gbenga Ajayi
Thank you.