Quadrillions: How to Win the World | Chris Maurice

You cannot get remote enough in the country to not be able to find a guy with an M-Pesa stall that will take cash or give you cash for your M-Pesa, right? I mean, it is everywhere in the country, and, you know, they have built a lot of that real last mile infrastructure. And so for us, you know, we would much rather help provide the digital asset infrastructure to modernize a system like mobile money to modernize the banking system, modernize, you know, corporate treasury management, then we would try to go, you know, solve this for, you know, 4 billion people at the, at the last mile, right? So that's, I mean, that's a big part of the reason that we focus so much on businesses is these guys have already connected with the users, right? It's, they, they are already, I mean, they're serving, you know, people every day across these regions. And so, you know, we would much rather help them modernize their infrastructure, help them provide a much better service to their customers.

Quadrillions is a miniseries produced by Blockworks and is sponsored by Canton Network. Nothing on this show is a recommendation to buy or sell securities or tokens. It's for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in companies, funds, or projects discussed, including those related to Canton Network. All right, everyone, welcome back to Quadrillions. Very excited about this. This is part— this is part 2 of a really interesting episode we're doing on kind of crypto's adoption in the world. We just had Yuval and Chairman Pham obviously talking about the US. Now we have probably the best person out there to talk about this, which is Chris He's the CEO and co-founder of Yellowcard and obviously joined again by Yuval's better half, Eric Serenecki. So yeah, Eric, Chris, welcome.

Thank you, sir. Good to be here.

Thank you. Yeah, Chris, we should start with your journey because I think most of the folks listening to this will be very, very, very familiar with what I'd call like crypto State of the Union in the US and very not familiar with crypto state of adoption everywhere else. Maybe there's a little bit of familiarity with like Asia and we do our conferences in Singapore and things like that, but very little awareness of what's happening, happening in Africa. I would love to just hear like state of the union of crypto in Africa and probably actually the best place to start would be a little bit of context on Yellowcard.

Yes. Yeah, happy to. So I think, I mean, high level, right? What we do at Yellowcard, we are the largest licensed stablecoin payments infrastructure provider for emerging markets. So we work across Africa, parts of Southeast Asia, South America, Middle East, basically anywhere in the world my mom doesn't want me going. And, uh, what we do is we provide the full infrastructure for companies to be able to enter the space, right? So digital asset infrastructure, everything from, you know, wallets and sending, receiving across, you know, various different chains to fiat payments, Uh, you know, being able to make US dollar payments on and off ramping against 50 currencies, mostly emerging market currencies, and then compliance infrastructure, right? Keeping, keeping everybody safe. Um, so we do that for companies like Visa, PayPal, uh, Western Union, a number of, uh, number of large remittance companies, uh, and then large corporates, uh, large corporates, airlines, uh, companies like that. And so, yeah, very much, I mean, very much focused on real-world use cases and applications of the technology. Right? All of our customers are using us for payments, right? Payments to individuals, payments from individuals, uh, payments to businesses, invoice settlement, treasury management, right? How do you move corporate funds around the world, uh, when SWIFT and the banking system, you know, aren't built for your country? Uh, and so, yeah, very, I mean, very practical. We're, you know, we're the practical side of, uh, of the industry, right? Not the dog and cat coin side of the industry.

Yeah, yeah. What— how many countries do you guys operate in, Chris? Because there's what, there's what, 50-some-odd countries in Africa. So, you know, you can't just blanket say that we're like a stablecoin provider in Africa. Like, what countries do you actually participate in?

Yeah, so we, we support just over 50 currencies, which accounts to about 42 countries.

Nice. Okay. What is the problem if you had to boil it down to like one or two problems that you guys are solving, how do you think about that?

Treasury management would be the big one, right? So if you are, if you are a large company operating in emerging markets, right, operating in, you know, Argentina and Nigeria and, and, you know, Kenya and any of these, any of these markets, how do you, how do you reliably move money around within your organization? And access dollars, pay invoices, right? Keep, I mean, you know, keep flows going, right? I'll give you a great example. We work with, uh, one of the largest food producers on the, on the African continent. Um, and, you know, look, some people consider food essential, right? I'm not going to opine on how dollars get divvied up, but these guys don't get enough dollars through the normal banking system to be able to import food and, and, you know, feed the country and keep the cycle going, right? They import, which requires dollars. They sell locally, which is all in local currency. They need dollars back from that local currency to keep the cycle going, right? And so they're only able to get about 25% of the dollars they need through the traditional banking system, right? And that's, I mean, any number of issues, right? It's liquidity, it's, it's access to the dollar, it's the ability to move the dollar on time, right? I mean, they can get more dollars, but it will take 30+ days in some cases for those dollars to actually settle. So there's any number of reasons they need to go to the market writ large to find dollars elsewhere. And so stablecoins are the first technology that helps these companies to be able to make these types of international payments, invoice payments, things like that, without having to go to, you know, the black market, right? Without having to go like on the street to some guy's uncle to make the payment for you.

Hmm. This is, um, yeah, it brings up an interesting topic, which is basically like the US dollar as the hottest commodity in the world. And in the US, it's just, you know, it's like a fish in water, right? We don't realize that. But you go everywhere else in the world and they want the US dollar. What is the process for, I guess, pre-stablecoins, pre-crypto? What is the blocker for getting dollars? Right. Because free market, you should have— if there's, if there's all this demand for dollars, why doesn't— why isn't there the supply? What's the— is it regulatory blockers or tech, like technological blockers, or what is the blocker there?

Yeah, so it really depends on the country. In most cases, it's like, it really boils down to information asymmetry in most cases, right? And in most, most parts of the world. And when you think about emerging markets, one of the biggest reasons that there is inefficiency in a lot of these markets is just information asymmetry, right? Like maybe I know you and, you know, you have, you know, access to dollars and you can help me make those payments. But Eric doesn't know you, and I'm not going to tell Eric about you. I'm going to tell Eric that I can do it, and I'm going to, you know, make my cut in the middle, and, and, you know, I'm going to serve a bunch of other— and, you know, and so like, there's, you know, sort of all these inefficiencies that can come up when just information is not sort of freely available. Um, it's also, it's also just the system itself, right? Uh, when you think about You know, SWIFT and the correspondent banking system, it was never built for emerging markets, right? It was built for the US. It was built for maybe Europe, but it was not built for the rest of the world. And, you know, the analogy that I always like to use is when it comes to money movement, right? You have sort of this interstate or, you know, these superhighways that connect the US and Europe and Japan and, you know, other major economies. And I mean, you know, look, these, you know, I mean, they might not be the Autobahn, right? But I mean, you can still, you can move pretty quickly. If I need to send money from the US to Europe through the traditional banking system, it works, right? I know that sometimes, I mean, look, that gets people in this industry fired up when I say that moving money's not that hard to Europe. The patriots really get fired up at that one. But, you know, it's not actually that hard to move money from the US to Europe. When you need to connect to emerging markets, right? When you need to connect to certain parts of South America, of Africa, of Southeast Asia, it's no longer an interstate system, right? You got to take an exit onto a dirt road littered with potholes that haven't been touched since 1985, and your car only gets 3 tires and half a tank of gas to get there, right? That's, I mean, that's essentially what the system looks like today for most of, most parts of the world and for most of markets. And so, you know, you're dealing with a system that just was never set up for emerging markets, right? Uh, and trying to be a company working in these countries, making these international payments on a system that just wasn't built for you.

Yeah. Eric, how do you guys think about— well, I guess I'll preface this question with, like, in, in my mind, Canton is very, very much an institutional platform. Right? You guys have done a real— I mean, we've done a couple episodes on this already, done a great job onboarding institutional folks onto the platform. How do you think about what I'd call like emerging market adoption? And like, is that a place you guys want to focus? Maybe potentially, but not right now? How do you think about that?

Oh, it's definitely an area of focus. The way I, the way I try to frame this is, if we can build a better capital markets core system, that the core of B2B, that that makes B2B2C or B2B2B2C a much smoother experience. So today, to be able to access treasuries or, you know, convert a treasury into a stablecoin or move fiat to get this or to access the FX markets, that's— I won't put words in Chris's mouth, but that's part of the friction that he's dealing with. Part of it is a last-mile problem locally, but part of it is also then the conversion into the products that they need access to and that would benefit them. And it's not just access to the dollar. Access to the dollar is the first step, but then Once I have access to the dollar, what do I do with that? Can I hold treasuries? Can I participate in money market fund ecosystem? So it's bringing this core capital markets world to a broader audience. And I think I've said this on your show before, but I think we've fallen in love as an industry with this false narrative that crypto is peer-to-peer. And there was a time when that was true, way back in the day when I was kicking around this thing using Bitcoin Core. Yeah, this was a primarily peer-to-peer ecosystem. But today things are heavily facilitated by my wallet or my custodian or my exchange that I'm accessing these networks through. And really they look a lot more like B2B2C markets. And I think it's a misconception to believe that ETH has the users. I think it makes more sense that it's Yellowcard has these users or Aave has these users and they are facilitating access to these networks. And that they, that they are helping design these experiences and solving problems for them. And that's where there's really user connectivity and loyalty. So for us, the motion is just make capital markets a lot more efficient, a lot more accessible, a lot more fluid, work the way that they should. Let the Yellow Cards of the world figure out how to express that in the regions where they're solving specific problems. And together you have a better joint solution. And you have to think about, you know, I think I've said this also, I'm going to show the backend and the frontend of your product. The frontend of the product might be the stablecoin, might be the wallet, but on the backend, I'm managing cash in a bank account. I'm managing treasuries at a broker-dealer account. I'm participating in the repo market. I'm participating in the money market fund market. If those things don't move at the pace of the frontend of your product, then you're just eating those frictions on behalf of your users. And you're a little bit hand-tied in terms of what problems you can truly solve. So we want to give the Yellow Cards of the world as many tools as possible to build differentiated products and solve those problems in the markets that they operate.

Nice. Chris, what can you tell us about the infrastructure challenges kind of required to build a company like Yellow Card?

Um, that is a, that's a broad question. There are a lot of challenges, uh, from an infrastructure standpoint, uh, depending on where you are. I mean, I think, you know, look, uh, this is, this is a big part. And I mean, you know, look, to Eric's point about, you know, the industry looking a lot more B2B2C, this is a big part of a reason that we focus on B2B2C and, and B2B is, you know, when it comes to infrastructure solving, solving the last mile, you have banks, you have, you know, telcos, you have financial institutions across these regions that have done a phenomenal job of managing that, right? That can go all the way to that last user, right? I like M-Pesa is always, you know, a great example that most people are familiar with now. You know, you have M-Pesa in Kenya where, I mean, it, it, you cannot get remote enough in the country to not be able to find a guy with an M-Pesa stall that will take cash or give you cash for your M-Pesa. Right. I mean, it is everywhere in the country and, you know, they have built a lot of that real last mile infrastructure. And so for us, you know, we would much rather help provide the digital asset infrastructure to modernize a system like mobile money, to modernize the banking system, modernize, you know, corporate treasury management than we would try to go, you know, solve this for, you 4 billion people at the last mile, right? So that's, I mean, that's a big part of the reason that we focus so much on businesses is these guys have already connected with the users, right? It's, they are already, I mean, they're serving, you know, people every day across these regions. And so, you know, we would much rather help them modernize their infrastructure, help them provide a much better service to their customers. And, you know, that's what we've been able to do, right? I think when you look at like remittance, for example, I mean, you know, look, we work with remittance companies where we've been able to, in some cases, double the amount of money that families on the ground were receiving simply by using better infrastructure to send that money. Right. I mean, that's, that's to give you an idea of how broken it is in some systems, right? Uh, using stablecoins to transfer that money to certain countries can more than double the amount of money that the family receives. Right. Which is, I mean, which is, which seems insane, right? That's a unbelievable statistic. So yeah, it's— and like, it's, it's, you know, again, you modernize— when you modernize that infrastructure, these guys, these big remittance companies already have these, you know, hundreds of millions of customers, right? You modernize that infrastructure for 5 remittance companies, you've just reached, you know, more people than we could possibly reach on our own.

Yeah. So you won't compete with the Western Unions of the world, you will modernize Western Union, is that right?

Correct. Yeah, we work with Western Union, we work with— I mean, we— if you can name a remittance company, we probably work with them.

Hmm. How much— talk to me about like the role that stablecoins have played here. I'm curious because you guys started the business. I mean, I don't know the exact year, but I followed your journey a little bit like several years ago, 7, 8, 9 years ago before stablecoins really becoming this big mainstream thing. Has it always been a business built on stablecoins, or was there this kind of parabolic rise in the last year or two because of stablecoins?

No. So yeah, we started out, uh, we started out on Bitcoin fully, right? So I mean, I moved to— what, we moved to Nigeria in 2018, launched in 2019. It was fully Bitcoin, right? And I mean, when we launched, we were— I mean, you know, full B2C, right? It was, hey, you know, we're gonna, you know, go do Coinbase and other parts of the world. Great. Um, and so we started out doing that. Um, We did that until what, the end of, was it the end of 2019 or end of 2020 when we added USDT? And when we added USDT, we went overnight from 100% Bitcoin to about 70% Bitcoin, 30% USDT. And within 4 months it was 99% USDT. I mean, it was just a rapid movement over to stablecoins. And so, you know, that, I mean, just had us rethink everything, right? We started talking to, you know, talking to customers more, trying to understand better, you know, the use cases and, you know, why is nobody buying Bitcoin anymore, right? I mean, look, Ethereum, I mean, we would have like one transaction a month on Ethereum, right? I mean, so it was just, there was just no interest. It was all stablecoins. And the more that we started, you know, talking to people, the more that we realized, you know, this is, it's a, it's a payments use case, right? People are not using, people were not buying Bitcoin. Like, I don't know, look, you and I probably buy Bitcoin because we want the price to go up, right? Or, you know, for some speculative reason or hedging against the dollar, you know, some reason like that. People were not buying the Bitcoin because they wanted the price to go up. People were buying the Bitcoin because they needed to send it and they needed a better payment rail, and Bitcoin was the best available option, right? With the advent of stablecoins, it's, you know, it helped so many of these businesses adapt to this technology because now you have all the, you know, the infrastructure, the ability to send this money, and none of the fluctuations, right? They don't have to worry about, you know, my payment is, you know, 0.00847 BTC, and, you know, worry about the fluctuation of that, right? Now it's just on the dollar. Everybody understands the dollar. Everybody knows the dollar. Move dollars around the world.

Uh, you mentioned USDT, Chris. What about USDC?

Uh, USDC is also popular in some markets. Uh, USDT, especially outside of— like, it, it, it really depends on who you're dealing with. I find it typically that, like, in the past, it was typically American corporates wanted USDC, sort of the rest of the world wanted USDT. Um, we've seen both sort of make traction like across each other, i.e., like USDC has become more popular in some parts of the world and USDT has become a lot more popular with American corporates ever since the election and, and all of that. And so, yeah, I mean, they're both, I mean, they're both growing rapidly. USDT historically is I mean, the dominant one and still today is the dominant one. Yeah, sort of in a market.

What about, what about on the L1 side of things? Like what chains are these transactions happening, actually happening on?

It's all on Canton, baby. Every single thing. In fact, we've never seen another payment on a different chain. It's soon.

Soon.

No, I think historically Historically, it's all— it's almost all been Tron.

Uh, why is that? I was kind of like guiding you towards that because, yeah, you know, I see the— I see the charts and I see the data, but I've— I don't know people who use Tether on Tron because I'm not in, you know, Africa like you are. What— why is— how did Tron— how did this become the case? Tether on Tron, very widely adopted.

Yes, insanely widely adopted. I think more— I think it passed up Ethereum a while ago. I'm sure it's still more market share or market cap than Ethereum. Um, simple reason, right? And I think like everybody for— I think for a long time people in the industry have been racking their brains about like, why is Tron popular in these regions? It's, it's quite simple reason actually. Um, USDT on Tron was the low-cost liquid alternative available for stablecoins when nothing else was available. Everything else was on Ethereum. USDT and USDC only had liquidity on Ethereum. USDT only had liquidity on Ethereum and a little bit on Tron. And when Ethereum was, you know, $50 to send 5, everybody just started using that one and it just took off. And I mean, as I'm sure you guys know, you know, consumer behavior is not the easiest thing in the world to change, right? And so people adopted Tron, people built the infrastructure for it, people got wallets for it, people, you know, did all the stuff that you need to do. To handle it because they didn't want to pay $50 on Ethereum and that was it. And now Tuan started charging more.

And where do they store that? Where is it? What's the— are they doing it in like self-custody wallets or in like, you know, the Coinbase of Africa or what? Where are they actually storing that, that Tether?

So that varies pretty widely. I will say we do see a lot more self-custody in like, I mean, Africa, South America, parts of the world like that than we do typically in the US. Um, yeah, I think part of it is probably the lack of trust in institutions writ large, right? Uh, whereas I generally trust that like Coinbase or my bank is not gonna screw me over, harder to trust, you know, institutions in some of these countries because people have a lot of, I mean, you know, There's a lot of trauma from, you know, a lot of different, uh, examples and issues. Um, so we do see more self-custody, uh, but I think, you know, overall people use whatever is available. A lot of people use Binance. Um, yeah. And then just other wallets. Right. But I mean, we see a healthy mix, I would say, of self-custody versus like custodial offerings.

Nice. Eric, how do you think about, um, I guess this idea of like kingmaking versus just doing whatever the market wants you to have. Like in the US, there's a lot of— I've seen a lot of chains make the decision of like, we're just going to focus on USDC in year 1 or something like that. But maybe really the market wants USDT, or that's maybe too specific of an example. You could use the same example with applications and, you know, integrations and all that kind of stuff. How do you think about that dynamic?

Yeah, I think there's a really tricky trade-off between the importance of the neutrality of an ecosystem, you know, especially a general-purpose L1, with trying to make sure that you get the outcomes that you want. So in general, our attempt to try to find that balance is that anybody that comes into our ecosystem, we try to support as much as we can in connecting them to everything in the ecosystem. And trying to build the tech and tools that make those things really easy for people to integrate and use. So an example of that is we have a general token standard. This is not any different than any other network. And so if a wallet integrates the token standard and the asset that you issue supports that token standard, then you can work in every wallet in the network or every DEX or every DeFi protocol. It's not really revolutionary, but that's, you know, the sort of stuff that we spend a lot of time trying to make a better experience for anybody that would come into the ecosystem. You know, in terms of where we try to put our focus, it's really more around the experience. So we would sit down with a yellow card and say, you know, walk me through exactly through how your customer uses this. What are the friction points you're running into and facilitating that? And what would make facilitating that easier, lower friction, lower cost, better, you know, value differentiated? And then We'll go try to find the right partner or wallet or integration or build the tool or whatever it might be. It's different in every context and it's usually more than one thing. It's usually kind of a combination of things and try to make sure that we can help facilitate that at an ecosystem level. So we're increasingly trying to define the exact experience that we're trying to make sure happens in the network and then work with all the right participants to slot them into that process. Rather than thinking about it more vertically. Then you might think in something else that's more like application-specific as an L1, they might be thinking a lot more vertically oriented. We're constantly trying to make sure that the partners that are there and the horizontals that are there are broadly applicable and work in very similar ways.

How do you guys think about the FX challenges to a business like this? Because yeah, yeah, just the FX challenge. And Eric, I know you have maybe some experience here from the Cumberland side and Chris obviously as the— on the operator seat.

But I mean, actually, Cumberland was so long ago, I couldn't even get a bank account outside of the dollar, even before we get bank accounts in the US region. So yeah, we didn't deal with too much FX in my days there. But you know what I'm witnessing in our ecosystem is that there is a real opportunity in those markets where you can get both a stablecoin and the local government bond and get high quality fungibility between those two things, that you can create really interesting FX markets. Because if I can swap bonds globally in different contexts, 24 by 7, and then I can convert them on demand into stables or cash out into fiat, then that helps a lot with those corridors of— it's not the last mile like an M-Pesa, like Chris was talking about before, But at the wholesale level, you know, they're constantly rebalancing what they have on their balance sheet at any given time. And that rebalancing, the opportunity is we're seeing increasingly in the fungibility between stables and bonds and then a bond market or a repo market. And that's kind of what I was talking about before is that's a solidly B2B ecosystem. You know, you don't find a lot of retail bond traders at any size. But there's a very healthy, you know, bond and international bond market. And so being able to bring elements of that on-chain that are additive to remittances or payments or stablecoins in FX context is how we're thinking that we might be able to start to improve this experience for everybody. Actually, I don't know if Chris thinks that that carries any water, but—

Yes, 100%. And this is all I think about all day. I don't even have hobbies. I just think about stablecoins and FX all day. Uh, and so, yeah, I mean, I think, uh, you know, look, I think that is, that is key. Um, and, but I think that people oversimplify the concept of bringing FX on-chain. And there have been a number of companies, even now there's a number of companies that are trying to bring FX on-chain. Which sounds great, right? And you know, you can raise a bunch of money and, you know, everybody loves the idea of bringing FX on chain, but the actual process of doing that involves working with a ton of institutions in a ton of countries that are not going to do this on public blockchains, and they're not going to do it, you know, with assets that they don't have some semblance of control over. Right. And I think, you know, this is where a lot of what I mean, you know, Eric and, and, you know, Canton, you know, really helps with. And, and a lot of where this comes in is as you think about, you know, institutions in these countries that need to be on-chain for on-chain FX to truly happen, right? The banks, the telcos, the large corporates, et cetera. You know, I mean, look, we had a, we had a call with the, you know, the, the C-suite of a bank. One of the largest banks in emerging markets today. These guys are not going to use a chain that they don't have control over the consensus. They don't have control over the ledger. They don't have control over any of it. Why would they, right? They're a massive bank. Why would they give up that control? And so I think, you know, you need a system where all of these banks have interoperability, but also have control, right? And that's, I mean, to me, that's really the magic of what, you know, Canton has built and why, you know, why I think that like the, the solution that these guys are working on is really the only way to bring FX on-chain, right? I, I just, I don't think you can actually just issue stablecoins for all these different currencies the way that, you know, Tether and Circle have. I think the US dollar is a very unique currency in global trade. These other currencies are going to be controlled by banks. These stablecoins are going to be controlled by banks. They're going to be controlled by, you know, the the financial institutions in each of these countries. And they're going to want, you know, they're going to want a certain level of control to feel comfortable actually putting this stuff on chain and making this stuff available. And so I think, you know, as you think about, as you think about FX on chain, uh, there is still a long way to go because there are a lot of institutions that you need to bring on chain. And I think, I mean, frankly, Canton is, you know, one of the only ways that we've seen of actually being able to convince these guys that it's safe to move on chain.

There's, there's a very different last mile problem in capital markets than the one we were talking about before, which is to the end user, right? The last mile in this capital markets context is the 24/7 creation redemption of the stablecoin and being able to do that at scale. And, you know, we love it or hate it, we used to have this in the US in pieces of infrastructure like Signet. And people really don't appreciate what an enabler that was for the stablecoin ecosystem when it was growing, being able to move fiat 24/7, create this, this stablecoin 24/7. We've lost that in the US. We don't really have that capacity anymore and we need to create that capacity in every locality. And that's, that's what I'm saying about the bond market, right? That, that's the scalable on/off ramp is to be able to take a digital bond Give it to the stablecoin issuer in some shape or form, mint the stablecoin on demand, or vice versa, and create that 24/7 market for the creation and redemption of this vehicle, right? If you think of a stablecoin as a vehicle in this context, right? So it's not about just access and storage of dollar and that sort of stuff. If you're thinking about international remittance and FX, you're talking about a capital markets last mile market. And for us, that's very much the interaction between a local government bond with short duration, maturity, SAFE, et cetera, same sort of Genius-like compliance stuff that you find in the US, but you have to go create that in every locality. And that is very much a capital markets controlled construct. And there's absolutely no way that those entities are going to onboard into some ecosystem where They are going to make their entire capital markets business public information. It's just, you know, the control element is a big one that Chris was talking about, of course. But I think that there are a lot of ways to help people get comfortable with that in different elements. I really think the threshold issue here is the, is the privacy element, because you're, you're going to now start to make the entire bank's operations public information, their biggest customers. Public information, the source of liquidity public information, the volumes, you start leaking an incredible amount of information that is highly sensitive and could be subject to market manipulating tendencies if they became public information. So it's not that this stuff doesn't work, right? If you mint a stablecoin in Turkey and you create a Turkish lira versus, you know, USDC or USDT market, it can work.

Work.

It's a scaling problem. I could get up into the low single-digit billions. I can't get up into the hundreds of billions or trillions of regular rotational volume and velocity. And that's why the thing that's really killing it right now is the dollar one, because Axis is winning. But on the back end of that product, we don't have the on and off ramps figured out, not just for, for US stablecoins, but also the international ones to make that stablecoin sandwich or FX sandwich work reliably. And I think the strongest proof of that is how expensive in BIPs terms those on and off ramps are at the different locations. I'd actually be really interested to hear Chris's take on that. But when I look at, hey, 50 BIPs in and then 50 BIPs out and I'm sandwiching a stablecoin in the middle, are are these things really saving 100? But in some instances, yes. So, you know, there are, there are many of these cases where that might be enough. But again, how big is the total market at that sort of expense?

Yes. Fortunately, yellow cards on and off-ramp fees are so low that we're practically giving it away.

Chris, anything else on the FX problem?

No. I mean, I think, I think, you know, Eric, I think Eric largely covered it, right? I think I think that is like getting, getting those banks, getting banks and getting, you know, large financial institutions involved is the only way to scale it. And, you know, I mean, he, he hit the nail on the head. When you think about control, the most important thing that these guys have to control is the information, right? Is, you know, who's doing these transactions? When are these transactions coming in? When are transactions going out? Right? You can't, you know, you can't run a, you know, financial institution with everything public and expect there not to be, you know, bad actors doing things with that data, right? If I know every time that money is moving in and out of a bank, if I know exactly how much cash a bank has at any given time, you know, there's, there's, there's a lot that you can do with that data. If you see a bunch of dollars coming into a bank You know, all of a sudden I know, well, great, they're about to, you know, convert all of that, right? Let me front run the peso, right? Let me do this, let me do that. I mean, you know, even look, I mean, I was talking to, uh, you know, a friend that's running another company. I mean, quite similar to ours in, uh, you know, different parts of the world. And he was saying that like, even they have this problem where when people see large deposits come into their wallets, they will front run, you know, the local currency and, and run it up because they know that there's about to be a conversion. Of, you know, X million dollars. And in some countries, it doesn't take that much money to, to manipulate the market, right? This isn't, you know, this isn't USD to euro where you need billions of dollars to, you know, to actually make a sizable impact on the market, right? I mean, in some of these countries, a couple million bucks, you can, you know, manipulate exchange rates, you can manipulate the market. And so that protecting that information is, is critical if you want to reach any sort of— I don't— I frankly, I mean, look, I don't know if they can get to single-digit billions with, you know, on a fully, on a fully public system, right? Just, I, you know, when you look at like the lira, again, lira you can manipulate with, you know, I mean, a decent amount of money. And so, I mean, protecting that information is critical, and having trusted, you know, counterparties and sources and everything for, you know, for that information is going to be critical to actually scale FX.

And those, those markets, I mean, especially in the, you know, the the zones where you have difficulty getting cash in and out, those are ones where the government is particularly careful and sensitive about how those rates are moving at any given time. So you could see a real backlash to creating something that's outside of their control that would be pushing the market around. You could see a really reactive sort of response. And again, that, that, that to me is the risk of just doing this regulatory arbitrage approach that you find in the maximally decentralized public networks first is that, you know, one of the biggest risks is you could just get these really overreactive responses that would close a market down for a significant amount of time and make it very, very difficult to provide the benefits to the, to the local inhabitants. So it just— I don't know, people need to take, I think, a more thoughtful approach to how to enable these things in the, in the local markets and make sure that you're not doing something that is so disruptive that you're going to get thrown out and just kind of ruin the opportunity for everybody.

Hmm. Chris, we just— folks just heard from Commissioner Pham talking about kind of U.S. regulation. I'd love to hear what regulation in the, you know, in Africa looks like across these countries. I was reading right before this episode about some North African countries. Yeah, North African countries that just banned crypto. There's a some like sub-Saharan countries where I think you guys operate that issued warnings. There's— I think it was Nigeria last summer, maybe tried to seize funds or this summer. So would love to just hear like kind of the— I mean, I feel like in the US a lot of that has been solved and fixed. How does it look in Africa right now?

Yes.

Well, you know, look, in the US now you have, you know, great people like Commissioner Pham and, you know, everybody else that's that's working on this that has been pushing this industry forward. Um, obviously, you know, all of us remember what it was like, you know, going back just, you know, what, 13 months or so, um, and what it used to be. And I think, you know, look, what I tell people is, you know, obviously the last 12 months excluded, where it is, you know, remarkably better to, uh, you know, to operate in the US and, and, you know, operate in these markets. Um, before that, uh, Africa, but emerging markets writ large, were the best places to actually start and run a company in this space. You had far more regulatory clarity in far more places. At the same time, well, you know, the SEC in the U.S. was, you know, going after companies that they let go public, right? And so, uh, I think, you know, when you look Broadly, uh, you know, just to— like, you reference North Africa, right? So when you look broadly at like the African continent, um, there's only 4 countries that have actually banned crypto, and they're all in North Africa. It's Morocco, Egypt, Tunisia, and Algeria. Uh, Morocco, we've done a lot of work with the central bank there. Uh, they have a full VASP license and, and, you know, crypto licensing regime that is coming into law you know, knock on wood, uh, you know, hopefully within Q1, right, you'll have a totally different outlook in Morocco in terms of legality and, and everything there. Um, when you look across Sub-Saharan Africa, uh, countries have made various different— in various different degrees have made moves in the right direction. We don't really see anybody in Sub-Saharan Africa right now that's heading in the wrong direction. In all of the major economies you have licensing or the semblance of licensing, like some sort of licensing regime that exists, whether they've started issuing it or not. You have that across Nigeria, across South Africa, across Kenya. Now, uh, after, you know, the, the recent legislation there, you have, you know, countries like Ghana where the central bank has moved this industry forward and, and, you know, there's a registration process and, and there's draft bills. You have a license that exists now in, in CEMAC, which covers 6 countries. You have a license in, uh, you know, West African Francophone and Waymo that's coming. And they've, you know, started, you know, started the process of, you know, putting forward draft legislation. You've seen draft legislation at a number of countries. And I think, you know, it's one of those parts of the world where, you know, when you look at adoption trends, right, when you look at, you know, the Chainalysis data over the last 4 years, there have been 7 countries from Africa that at any point— and I mean, at one point there were 6 in the top 20. At once, right? But you've had 7 countries from Africa that have been in the top 20 over the past, you know, 4 years, right? So these are, these are places where, you know, this technology has taken off. It is being utilized actively, right? It's being used to do things that people can't do through, you know, through the traditional system, right? And so it's, it's something that regulators had to adapt to earlier. and had to come to terms with quicker. It's also just a much different use case. You didn't have, you know, the FTX debacle impact as many people as you did in the US because again, it's just a much different use case, right? It's less speculative, more, uh, transactional.

Yeah. Yeah, guys, as we think about wrapping up, I would love to just hear kind of vision for the emerging markets in crypto over the next couple of years and, and maybe, um, if there's, you know, Chris, you're, you're so on the ground. I'd love to hear like if there's anything that's starting to feel very obvious to you about what that will look like that maybe isn't obvious to, you know, folks like Eric and I sitting in New York right now. And then also Eric would love your thoughts on this as well.

Yeah, I mean, look, the, the big thing, the big thing that I would say that I'm excited about and we're seeing this across emerging markets is right now our biggest growth factor right now as a company and then into 2026 you know, where we're expecting most of our growth to come from is from banks and large financial institutions. I think the rate at which banks in these regions are adopting this technology is far outpacing what you're seeing in the US. I think you're seeing it in the US, you're seeing it in Europe— in the US more so than Europe, right? But you're, you're seeing it, uh, but it's, it's been slow, right? And it's one of those things that, I mean, you know, JP Morgan is is, I mean, actually pretty far ahead on, um, but, you know, even they are not doing as much as we've seen from, you know, institutions in other parts of the world, right, where they are already using it for treasury, they're already using it to, you know, to help customers be able to make payments that they otherwise couldn't make, to use it as an alternative to U.S. correspondent banking, things like that. And, you know, look, I mean, if I had to pick one sort of thing over the next 5 years that, you know, I'm excited about, and that, I mean, frankly, look, I'm not a paid Canton spokesperson, Jason Yanowitz. I've been asking, they, they keep telling me no. Val and Eric said no, no money. Uh, I just got to keep saying nice things. I don't, I don't get paid to do it though. Um, but you know, one of the, one of the things that gets me excited about like emerging markets, the trends and, and Canton is the ability to actually replace correspondent banking and, and SWIFT and, and sort of this intermediary system that so many, you know, parts of the world struggle with. Um, I think that, you know, look, if you're a European bank that has easy access to JP Morgan or to Citibank, then this isn't a problem for you. But if you are a bank anywhere in emerging markets, you typically don't have that direct access. There are countries in Africa and South America where there are no banks in the country that have direct US correspondent banking access. Which means they have to go through another country, usually a neighboring country, at great cost to get access to US dollars to be able to move. So you end up, you know, 2, 3 layers deep in emerging markets trying to move dollars. And the ability— this technology obviously cuts all that out. It cuts out all these middlemen. It cuts out all of this. Um, and the ability for, you know, Canton and, you know, technology— this, this type of technology to make these institutions feel safe moving money, right? To feel, you know, secure, to feel like they still have that control, they still have that, you know, the, the privacy that they need. All of that is critical as we think about how does this technology actually replace correspondent banking, because it's not going to happen on a public chain. It's going to have to happen on individual banking sort of networks.

Eric, any closing thoughts?

Yeah, I've got one kind of disruptive thought that I think will happen in the next couple of years and then one that I think is a little bit more constructive. And it's going to be interesting to see how they balance off of each other in some of these emerging markets. So the first is, I think over the course of the next year, maybe as quickly as over the next 6 months, you'll start to see access to like global dollar-denominated bank accounts. Through really friendly regulatory regimes in certain jurisdictions that are actually quite attractive. So to be someone almost anywhere in the world that could create a dollar-denominated bank account, and that's the experience that will be exposed to them. You know, what it actually is on the back end may be some interesting virtual account connectivity and ultimately a stablecoin holding and a, and, you know, US Treasury or money market fund. But the way it'll be presented is a globally accessible US dollar bank account. And I think that that's going to be quite, quite disruptive in a bunch of jurisdictions and markets. I think you'll see a reaction to that to try to curtail that in some respects. And I think the ones that will be successful will be the ones that lean forward and into it, and they create their own digital bond and stablecoin ecosystem that makes it attractive and fluid to stay in the local currency or use it locally so that you don't have something so, from a utility perspective, directly competitive. And those things can be complementary as well. But I think you'll see both of them play out at decent scale over the next 2 years. And, you know, just to talk my book for a minute, that sort of experience of direct deposit to my wallet, I think, is an absolute nonstarter with without privacy, especially when you're talking about effectively a bearer instrument like a stablecoin. The wrench attacks are very real. Maybe not so much in the US or Europe like Chris is talking about, but especially in emerging economies, wrench attacks are very real. The concept of anyone being able to find out how much money you have, and it's pretty easy to do association attacks. You know, we've actually seen that play out in other markets where there were real-time payment systems that came to market This was a pretty big problem in Brazil when they rolled out their retail-facing real-time payment system. So I think it's not to be underestimated how important this privacy element is to unlocking that user experience.

Yeah, yeah. It'll be very interesting to see, Eric, the geopolitical impacts of global US dollar bank accounts around the world. Yeah, yeah. Erik, thank you. Chris, thank you. Chris, this was long overdue. I've been following Yellowcard's work for many, many, many years. We started Blockworks December of 2017, which is, I think, roughly around when you guys got into— started doing Yellowcard. And just, yeah, I've been an admirer of your journey. And Erik, yeah, thanks again, as always, for the time.

Anytime.

Big fan of you too, man.

Cheers.