Quadrillions: Stablecoins: We’ve Only Just Begun | Mohamed Afifi

A lot of the difficulty is building on stablecoins, which today is super expensive, it's super fragmented. So some of these cool platforms that are out there today working with some unique chains and other unique companies are really building sort of unique solutions for different segments of the market. So I think we're just starting, honestly, in terms of like scratching the surface of where we're heading.

Quadrillions is a miniseries is 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 to the Canton Network. Alright, everyone, welcome back to Quadrillions. This is episode 5 of our series with Canton. Very excited to have Eric Sernicki, co-founder of Canton, back on the show. We've also got Mo, who's one of the co-founders of HiFi. HiFi is a financial infrastructure platform. They provide software, the software layer for programmable money, and they are sitting at the backbone of a lot of stuff happening in stablecoins, which is what I want to make episode 5 all about. I think stablecoins have gone from basically zero to $300 billion in assets over the last, you know, really like 5 years. Um, but I think the message of this episode should be we really only just begun with stablecoins. So we want to basically spend an hour exploring stablecoins. So Eric, welcome back, obviously good to have you. And Mo, welcome to the show, man.

Thank you, thank you for having me. Um, really excited to be here. Um, close friends with, with Eric and the Canton family, so Very, very grateful to be a part of this episode. Thank you.

Eric, you have any nice words that you want to say about the show, about me right now? I'm kidding. I'm kidding. Let's have Eric. I will throw it to you maybe for, you know, you've been in the industry for so long. I think you've seen, you've seen pre-stablecoins to now, you know, you saw the early beginnings of stablecoins where it was really just like Tether being used to trade crypto as like a pair asset. To, you know, moving into emerging markets. And now it's kind of becoming not just this thing that crypto funds used to trade with, but it's becoming like a big B2B infrastructure play. Maybe give me like almost the state of the state of the union for stablecoins as you see them today and like really talk about the evolution of where they've gone and where you see them going.

Yeah, I mean, I'm going to rehash a little bit of your summary, but yeah, I mean, way, way back in the day, early, early crypto trading Cumberland days, it was very difficult to get a bank account at all. So to hold your cash holdings anywhere and then in particular to move it across the exchanges, the exchanges were in all sorts of pretty difficult to reach jurisdictions as well. So it just kind of further exacerbated the problem. So moving money around, rebalancing, participating in different ecosystems, that was a major early driver of the adoption of the stablecoin. And with DeFi, that amplified even further, right? So being able to do those types of activities on-chain and, and to be able to interact with those, you know, use cases directly using a stablecoin that opened up a whole new ecosystem of use cases. It's great to see this evolution. It's great to see that maturation, right? So from that early kernel and seed of immediate utility and demonstrating what, you know, an on-chain money vehicle would look like and then growing into this ever-expanding B2B ecosystem all the way up into the recent CFTC announcement about exploring stablecoins for variation margin in trad fi context. So it's, it's really demonstrating what a 24/7 programmable money vehicle can do. And, you know, from humble beginnings in a very discrete use case up to a very broad and generally useful mechanism.

What do you guys think? I remember, I remember May 2020 when Paul Tudor Jones called Bitcoin the fastest horse in the race, and then that kind of like took the career risk down for hedge fund managers to own Bitcoin. I feel like there was some moment in time in the last year or two where that happened for stablecoins. Um, and it just feels like, I don't know, it's at some point in the last year or two, stablecoins have just have seen this parabolic growth. What do you guys, maybe Mo, I'd be curious, like, where do you think, what was that Paul Tudor Jones moment for stablecoins?

Yeah, I think, I think from our perspective, it's really seeing, um, how it's removed the friction from the payment systems today. So it's no longer just involved in crypto and DeFi. There's actually real utility with regards to cross-border payments, and that's sort of where we're seeing a lot of the inflection today in the adoption. I think the experimental technology was experimented with a few years back. Even when we first started this company 4, 4 and a half years ago, no one really wanted to listen to us as it was relating to stablecoins, and now it's sort of the hottest thesis out right now. But in terms of what we're seeing, you know, they're no longer experimental technologies. They're in production today. They're moving immense value around the world, processing large volumes on a daily basis for some massive players in space. And we see it sort of as an enabler and helping sort of the bank infrastructure out. I think there's this context and a notion of, where people might have heard the term stablecoin sandwich before, and we'll dive into that deeper in terms of what that actually means. But I think as more infrastructure companies are providing services that are sort of abstracting the complexities of building on top of stablecoins, we'll start to see more of that adoption happening. But initial use cases really are trending towards cross-border payments and a lot of corporate treasuries as well that are starting to get involved.

Yeah. What was the moment? What was the reason that like kicked off this fervor of stablecoin interest? Was it, was it just the understanding that like, you know, regulation and clarity, like, you know, Genius was actually happening and we just needed good regulation? Or was there like a use case problem or a tech problem that got solved? What do you think kicked it off?

I think a couple of things baked into sort of your question. I think the first, the first step is obviously getting clarity. From a regulatory perspective, no more are the days operating in sort of a gray landscape. With Genius now here, you know, there's no turning the pages back. We're not going backwards. So stablecoins are here. And I think that sort of gave the confidence and the trust to the rest of the world to start interacting with stablecoins for those that weren't already sort of exploring how they can deploy them into their workflows. But I think some of the early adopters are those that really understood the value of what a stablecoin is, right? And sort of that non-volatility risk, having it issued by a trusted partner with reserves. So once a lot of issuers also started coming into the market and sort of giving that trust to the community is where we saw sort of that hyper adoption inflation happening. And then as other participants are popping up in the ecosystem, other infra players, other liquidity partners, you start to see sort of this interoperability layer, which sort of takes and abstracts away a lot of the difficulties building on stablecoins, which today is super expensive, it's super fragmented. So some of these cool platforms that are out there today working with some unique chains and other unique companies are really building sort of unique solutions for different segments of the market. So I think we're just starting, honestly, in terms of like scratching the surface of where we're heading. But in terms of the early days, I think definitely regulatory clarity was something that helped catapult the adoption.

But can I ask you, Mo, I mean, you guys were building before that, right? So like—

That's right, yeah.

What kind of, what was the early genesis that the idea for HiFi, like even before you had that clarity, you must have had an inkling for this. So what kind of gave you that sense?

Yeah, it really, it just goes back to like some core fundamental issues with the financial system today, right? So like, slower settlement times, right? The high cost, the fragmentation of the networks. And we saw that, you know, a lot of these problems were solved by the inherent technology in blockchains today. And we really wanted to like pull that value out and give real-world utility and real-world value to the world. And that's sort of what we spent the first like 3, 2 and a half years of the company trying to figure out. But it was really a lot of these issues that you see in traditional finance in the financial world today.

Moe, how did you think about if that's the problem, what should the business model be like? You know, probably one idea is like, let's go compete with Circle and Tether. Another is let's become an infrastructure provider. Like, you know, Eric mentioned the stablecoin sandwich. There's this whole stack of stablecoin infra that's getting built out. Like, how did you think about what is the right place to play in that stack? And actually, I'd love to just hear your take of like what that stack looks like today.

Yeah, for sure. So we saw like in the beginning, in the early days, like I mentioned, we didn't really know how to extract that value, but we saw that stablecoins, like, real utility was within payments. So I think for us, we wanted to envision a world where anyone can dream or want to deploy stablecoins into existing workflows in a really simplistic manner. And how do they do that today, right? It's going through different providers, working with issuers, going through wallet infrastructure providers, working with corresponding bank relationships, and building out your own compliance stack. And again, like having all these pieces that you sort of need to build out to have these like production-grade enterprise-level compliant flows ready to deploy that sit sort of adjacent to traditional financial rails today. And the way we thought about it was like, okay, we know that, you know, it's difficult to build, you know, on on, on say a stablecoin issuer today, right? You can't go directly to them. And how do you bring fiat on-chain? And how do you solve for the compliance risks and adhering to BSA and AML regulation? So we thought, let's try to bring a lot of these components in-house and sort of piece together all these fragmented areas where we can provide sort of this API solution where customers can come in and sort of think about like, hey, I want to build a remittance application to send money back home to Nigeria. How can we do that? Again, like you would need multiple correspondent relationships. You might need interoperability and bridging and swapping between coins and different blockchains. But again, like where can we provide the most value to our customers? And it took time, like meeting with customers, listening to them, hearing their problems and sort of building out this interoperable system where you can come to us with USDT on Tron and we can swap it into USDC or USDCX on, on Canton and then liquidate that out to another local market. So we really wanted to like bring this connective tissue to allow developers and other corporations to build and deploy stablecoins onto their workflows in the most seamless manner.

I'm sure you guys had an idea of like who the customer set would be for this. Like, no, maybe, you know, you create this, you think it's going to be remittance apps, sending money back to Nigeria, like you said. What has it actually been in practice? Like, who are the developers and the founders who who actually build on HiFi?

Yeah, it's really a broad range. So we service two cohorts mainly. So the first one, think, you know, financial institutions, traditional cross-border payments companies, remittance applications. And then on the second hand, think of a corporation, a large Fortune 100 or Fortune 500 looking to enhance their cash management system or their treasury management operations to earn yield on idle cash, right? To be more efficient in remittances across subsidiaries around the world or have the opportunity to go in and out of tokenized treasuries more efficiently, right? Like for example, there's a number of projects and programs that we're working on with some clients in Japan that are looking to have the ability to go in and out of tokenized treasuries more efficiently. So we're able to work on a really cool project with Eric and the team in terms of tokenizing treasuries and leveraging HiFi rails and stablecoins to go in and out of these treasuries. So they're able to earn that yield on that idle cash and have more efficient money movement flows around the world. So it's a really broad spectrum of clients. We even have like 2-person developer teams at OYC that are building some like really cool things that we couldn't even imagine, you know, just 2 years ago. So I think like what I'm most excited about is seeing some of these unique use cases start to pop up. And I think the future is bright.

What do you think in terms of— let's dig into cross-border payments a little bit more. It's a use case that everybody talks about, right? But maybe you can actually tell me like what specific parts of the supply chain of like a cross-border payment stablecoins actually help with. And then there's a second question that I would have later on, which is related to that, which is You know, you've got these companies like TransferWise and Western Union and Remitly. Are those people just going to use stablecoins to keep market share and to drive their cost down? Or are there going to be new competitors to Western Union who pop up who end up doing better than them? So maybe, yeah, two-part question there.

Sure. So for the first part regarding like cross-border payments, like we're really seeing this pop up obviously is in emerging markets where it's hard to access US dollars. But with that being said, leveraging blockchain stablecoins for cross-border transactions really gives you the opportunity to do two core things. And that's number one is to increase your velocity on transaction time. So a lot more efficient in terms of moving money globally by essentially being able to bypass the SWIFT network completely. Number two is reduction in cost, right? Without intermediaries, and with gas fees near zero, it's extremely cost efficient for companies to leverage stablecoins today to move money, you know, from the US to Singapore or wherever their use cases may demand. In terms of the second part of your question, some of these large cross-border payments companies today, I think, are just scratching the surface, like I mentioned, in terms of deploying stablecoins. Into their workflows. And I think it's not a matter of do they need to do this? It's a matter of like, when will they do this? Because if not, they will be left behind. There will be new technologies that evolve and that will capture that market share from them. So unless they start to innovate leveraging stablecoin benefits, then it's going to be really hard for them to compete with the next wave of fintech companies that are popping up. Because I think over the next like 5 to 7 years, every company will be powered by stablecoins.

Yeah, I mean, I was going to say something along the lines of like, in general, when you find these disruptive techs, it's always both, right? You get some new entrants that come in and carve out really differentiated businesses within that new capability. And there are those that find ways to leverage it to be just more efficient over their existing edge. And some of those, you know, some of those existing incumbents in this motion, you know, where they have a tremendous amount of edge is like last mile connectivity and even a physical footprint, you know, and, and, uh, existing customer relationships and processes. And those things are, those are a lot easier to imagine going away than in practice they really are. You know, those are very durable sorts of relationships that people have grown accustomed to and have used over, you know, a long period of time in their, in their own life. So it generally tends to be both, is my understanding.

Eric, how do you see the market for stablecoin? So right now the market— I should have looked this up before this, but the market share for stablecoins is roughly what USDC and Tether own, like, I don't know, 80% market share right now, maybe 80, 85. But it's been falling. How do you think about like the market share of these? And, you know, if MOE is successful and HiFi builds and thousands of people using it, you're going to actually have this proliferation of stablecoins. You're kind of seeing that already, like Klarna is launching their own stablecoin. Cloudflare is launching their own stablecoin. So maybe we get millions of stablecoins. What is the market share of these stablecoins? Look like in like 5 years?

I think I said it with Belsheeb when we were on.

Yeah, yeah.

She and Justin's like this tweet that I can't unsee, which is, you know, congratulations, we've invented hyper-fragmented money. And so I'm sorry for repeating myself a little bit, but I— it's clear that we will have more before we have less. Yeah. I don't know what the consolidation path looks like, but generally speaking, there is going to be some either aggregation or consolidation because people don't really want to be aware of these distinctions. So where there might be implementation details under the hood and it's abstracted from the user, I could see how that could be durable. When it's something that is exposed to the user and is, you know, fragmenting liquidity because you would list Bitcoin versus C versus T versus and other things, and I could see that being, you know, counterproductive. So I'm, I'm not really sure what the endgame is, but at least an abstracted experience over a single currency, I think, is probably where we land at some point. Whether that's aggregation or consolidation, I have— I don't know. I lack the crystal ball to say clearly.

Hmm.

Well, what do you think?

I couldn't agree more. I think there's going to be a world where every country will have their own stablecoin. And that's when we'll really have like global interoperability. And at this stage, I see stablecoins popping up every other day. And they each have sort of a unique purpose or unique use case. So they claim, but I think, you know, in the long run, I think there will be some sort of consolidation where only dominant stablecoins within each country are sort of going to be the winning ones.

I mean, we kind of like have synthetically many stablecoins today. Yeah, this is not, you know, apples to apples are exactly the same. But, you know, when I'm inside Venmo, I'm in their ecosystem, you know, for all intents and purposes, I'm moving—

technically sitting in their stable, right?

That's right. I mean, you know, I'm sitting in their bank balances. I'm moving money across their customers. You know, I'm in this— I'm in this like loop that is very much a Venmo loop. And then when I hop across that into, into Cash App, that's a different loop, right? So like, we already have this today when you think about commercial bank money to an extent. But again, as it's abstracted to the user, it's dollars, right? It's not Venmo dollars or Cash App dollars.

So should Venmo launch— well, I guess they do. They've done it, PYUSD. Like, what is the— why should PY— what is the benefit for PayPal to have PYUSD?

I mean, I think that what it allows them to do is, is to experiment with, well, what are the ways to think about the incentives that we build around this ecosystem? And they're in control of that. It allows them to think about, okay, well, should there be some feature of this thing that would make it more advantageous to integrate with our system for some reason? It allows them to have the agency to make those changes instead of having to rely upon somebody else. But at the end of the day, it might turn out that it's like, actually, as long as this, you know, general stable supported these things, it would be fine. That might be a finding, or it might be, no, we have sufficient edge here in doing this ourselves and our ecosystem that will maintain this and keep it going. But I, I think that if, if everyone goes into it with open eyes, saying, I'm, I'm doing this to figure out everything that I need to know to make a, a long-term strategic decision about are we doing our own? Are we doing others? Are we doing both? How do we make that work? If it's understood under that context, then I think it could be a really powerful motion for them.

Mo, do you think every tech company should get a stablecoin?

Uh, no, I do not. I think every tech company should work on ensuring that stablecoins are invisible in their end application to their users. I think that's where we're going to see real mass adoption happening. Like Eric mentioned, you know, if we can eliminate and abstract the complexities of interacting with some of these applications that involve blockchain and stablecoins today and sort of have it be invisible on the backend and have the frontend experience be something that consumers are used to, then I think that's just going to help as well in terms of mass adoption. And I'm not sure if having your own stablecoin will sort of help solve that.

Should fintechs have their own stablecoins? Like, should Revolut and Robinhood?

They could, for the reasons Eric mentioned, just to have more control over, like, testing and seeing what could work instead of having, you know, limitations by some issuers. Then having your own stablecoin obviously gives you more flexibility to work your own programs. But if that stablecoin is wrapping another stablecoin, then, like, what do we really solve?

I think what people don't know the answer to yet. So like the only part of your question that I kind of reject or like I'm reacting negatively to is the should. Like, I don't really know that I know whether or not it makes sense for them or not to do it because what's evolving, I think what these networks are doing a really good job of doing is kind of breaking down vertical silos into more horizontal services. Like even if you look at the prediction markets that are on-chain, they're getting integrated more through like on-chain smart contract interfaces. So it's even becoming more horizontal the way you would interact with it, as opposed to going to the thing, logging into the thing, depositing your money with that thing. These are increasingly becoming more like, from my wallet where I have my assets, I interact with this marketplace. And so in that evolution, it's not clear to me yet what the horizontal components are and how you might carve out a subset of that that is relevant to your marketplace or your venue. So I don't think anybody can say with certainty yet. And I'm totally in favor of people pushing the boundary of that understanding and helping us all kind of see how the chips could fall. I think it's too early to say definitively one way or another.

Yeah. Eric, what decisions and theses around stablecoins did you guys have when you guys were thinking about just basically the stablecoin strategy for Canton? Like how did you build out this strategy? What is the strategy? Is it just the same as all the other chains or is there like some unique thing that you guys did?

There's definitely— I mean, we're a fast follower here for a lot of others, you know, fast follower in, you know, kind of air quotes.

You got to do the obvious things, got to get USDC on, you got to—

yeah, right. So I think that there are elements that are obvious, which is that for a general purpose L1, neutrality is really important. So making sure that we are supportive of many and that we don't really push one or another and that all of them have equal footing and, and equal opportunity in the, in the broader ecosystem. That, that's a very obvious and important one. The other is to figure out what we could offer that's differentiated to those, to those issuers so that they have a reason to come and it's not just another sort of tick of the box. And for us, we're, we're generally pushing two, two narratives there. And one is around just the added privacy layer to what you would ordinarily already do. So unlocking new opportunities or improving interactions over existing opportunities. You know, think about how easy it is to see where someone might get stopped out of a perp dex or the types of bets that people are making in prediction markets, right? So being able to help people protect that information through things they're already doing, or think about the use cases that everyone's talking about going into international remittances, corporate treasury, stuff like that. They all, all of those things benefit from privacy. And the other avenue is around the connectivity into the capital markets layer. So being able to interact with those stablecoins with things like treasuries and, you know, Mo was mentioning corporate treasury, but there's also just improving the backend of those assets. How do we create and redeem them? How do we think about connecting repo markets to the stablecoin creation redemption process, stuff like that. So thinking about how the wholesale capital markets make the product better and thinking about how the features of the ecosystem give them access to new opportunities or improved opportunities.

Yeah. What about— I was reading your guys' announcement with Circle and you didn't just, you didn't just bring, you know, the announcement wasn't, oh, we have USDC on Canton, it's USDCX. What is the, what is the difference with USDCX?

I'll let Circle speak to this because, you know, this is very much their motion, but They are experimenting with ways to bring USDC into more ecosystems and to make it more broadly available. And we were really happy to be part of this initial launch around the X Reserve. It's attempting to find a middle ground between totally permissionless, you know, bridge risk-taking, moving of USDC into different ecosystems versus interjecting Circle a little bit more directly into that process.

Process.

So it is, it's part of their motion to help them broaden access to USDC into more and more ecosystems and give those, those local ecosystems an opportunity to express USDC a little bit more in the local variant and give it a little bit more local edge. But for all intents and purposes, it's USDC.

Yeah.

It's really, that's really the most important thing to understand.

Yeah. Mo, can you tell us about like the stack that you guys have had to work with at HiFi? Like, do you work with Circle? Are they, are they a partner or a competitor? Like Tether, partner, competitor? Anchorage, partner, competitor? Bridge, partner, compet— like, how do you think about the kind of the ecosystem and the landscape of these stablecoin players?

Sure. So, um, a lot, a lot of the ones you mentioned we work closely with, um, in terms of Circle, even Tether. So the way our system is sort of set up, we're, we're pretty agnostic as it relates to stablecoins on our platform. Think of us as sort of like that distribution layer for stablecoin issuers to help other businesses connect into the infrastructure to deploy stablecoins out into their existing workflows or build new ones, like giving the Lego blocks to allow builders to build on top of. So for us, we're pretty agnostic, like I mentioned, as it relates to issuers and different stablecoins. Even in terms of our blockchain support as well, like that's part of like the beauty within our system, it's that it's completely interoperable between many different blockchains, agnostic as it relates to stablecoins. And in terms of our stack, we're working closely obviously with correspondent banks around the world. We work closely with the Circle Payments Network as well. We also work closely with Visa to, allow us to pay out to 170 countries, something we're super excited about. So based on our network of providers that we work with and are integrated into our system, we have many different routes that we can route flows to and from, and it's dependent sort of on the corridor and the demand and the use case in terms of how we route that. For example, if we have a large FI that's coming in, very focused on permission-based transactions or having that privacy element, obviously we'd be working closely with the Canton team to move Flows over that, over Canton Network. But yeah, in terms of our stack, like it's really interoperable and we wanna remain that way because for us, we think, you know, what's exciting is that we don't know what's gonna get built on stablecoins in the future and we wanna be there and play that pivotal shift. One, folks are thinking about, How do I deploy? When do I deploy? What stablecoin should I deploy with? We want to give them that optionality in order to explore and to build on top of.

Yeah. Mo, how important is privacy as a, you know, I'm sure when you're talking to folks, you're pitching the features of the HiFi platform. How important is, yeah, basically privacy for these developers and the founders for what they're building?

Extremely. I mean, if you just think about you as an individual and how important privacy is to us as people in everyday world, right? Why does that change as it relates to payments or transactions over a network? So what we're seeing is sort of this large interest in privacy and private transactions. Obviously, we're pitching it as well to large financial institutions that are looking for help with intra-bank settlement. Because for them, you know, why would one financial institution want another financial institution to be able to see their transactions publicly on a ledger. It just doesn't make sense. But with permission-based blockchains like Canton, you have the opportunity to not only have the counterparties have the visibility, but you could also invite regulators if needed to sort of have that same level of visibility as well. So having that control and that privacy is sort of really important for large institutions today.

Hmm. Eric, can you maybe talk about what you guys have seen on the ground with like, as stablecoins have started to flow onto the network? What is the— I don't know why. Yeah. Why do customers like using, using Canton?

Yeah. I mean, privacy is like one of those things that's been talked about for a long time, but then being able to actually use it in anger is something— it's not just an experiment in Canton. Like, it works at scale. You can use it without worrying about things like minting bugs and zero knowledge and stuff like that. So you can really step into it and make it part of your whole strategy. You can present it to your customers in a very transparent way. Like, for example, you don't have to go to them and kind of apologize and say, well, we have privacy, but it's anonymity. So I'm not really sure how you would be compliant in it. Like, people can go to those issuers and those customers and give a very full promoted support of it, which is you'll see absolutely everything that's going on for your coin on the network, but others won't. And that allows you to be compliant in these ways, and it allows you to create something that feels and looks exactly like a bank account does on Web2 today. And so just like being able to have these very clear, consistent statements about why this is appropriate for you to use it, I actually, the emotion I experience most often is kind of like relief. I think that there's this growing understanding that, okay, I can kind of get away with this, I can kind of get away with this, but at some point this is going to matter enough that I can't and I won't really know what to do at that point. I hope someone kind of bails me out. That's kind of a common in the back of their head concern that I see fairly consistently with people in other ecosystems. And then being able to be presented with, no, no, it's cool. Yeah, keep scaling. Here's your path to doing this in a responsible way. And being able to bring more stuff on-chain and not hide everything in one giant omnibus account, but actually segregate customer accounts and give them better forms of control and visibility into what they are doing, because you don't have to try to obfuscate that on-chain. It helps them improve their product offering to their customers as well. And that's where I think it kind of becomes like a win-win-win across the board. So that to me, those are the most fun conversations.

Yeah. Moe, is there anything broken in the stablecoin stack today? As you guys are deeper into building this infrastructure than most, like what's not working? Like what still needs to get built? Is it, or maybe it's not even a tech problem, maybe it's a liquidity problem, or maybe it's a last mile problem. Like I'd love to hear the, yeah, the things that aren't working as we go into '26.

Yeah, I think the ecosystem is still fragmented and that's sort of some of the pain points we hear from a lot of customers is they need to go to a certain wallet provider to provide certain types of wallet capabilities. They need to build on top of Base or build on top of Canton or ETH. And, you know, it's taken them hours, hours of development time. So I think that fragmentation and the interoperability piece is sort of still missing. That is going to enable that next generation of applications and UX to be built out. So like, from an infra perspective, I think it's really fragmentation. I think liquidity is pretty, is getting solid if it's not already solid. But in terms of having, like I mentioned, like stablecoins being visible for the end users and the applications, I think there's still like an opportunity to build out that middle infra layer.

Yeah, it's still too tribal. That's how I kind of say this to a lot of people is that, you know, when I think about you know, really good wallet experiences that you find in general blockchain space today, that fragmentation is starting to get really cumbersome. You know, like if I go to pick USDC, I'm scrolling through tons of options. And, you know, ultimately all I really want to do is send some money to a friend or a business or buy something or settle a transaction. And I think what's preventing that experience from getting built into a lot of these wallets is that a lot of these wallets born out of certain ecosystems, so they're quite tribal. And that fragmentation benefits their flavor that they prefer. If you were to abstract all those chains and just say to a user, hey, send $100 from Eric to Mo, and then you expose features that they care about. You want it to be fast and cheap. You want that to be private or shielded. You want that to, I don't know, get sent as cash or on-chain. Like if you expose kind of that high level of an option, a lot of these chains would get abstracted into the same bucket and it would become hyper, hyper competitive very quickly. Because to the user, when you take the kind of religiousness of the specific flavor of chain that they're interested in, that feature that gets surfaced to them is very crowded. In some of those zones more than others. So I think that's part of why you haven't seen that experience get built yet, is that there's this like local vested interest in the wallet that came out of this ecosystem or came out of that ecosystem. And at the end of the day, the thing that ultimately will win is just like Eric DeMoe, $100 private. Eric DeMoe, $100 cheap, you know. And then that, that wallet has agency to determine where that would go.

Where do Agentic, uh, Agentic payments and agentic commerce come into this. Like if you read the Cloudflare announcement, I think they're— I forget what they're calling it, NetDollar or something like that. Like the main reason that they're launching it is, you know, quote unquote, agentic commerce. And if you talk to the Stripe team about their vision for Tempo and stablecoins, it's a lot around, you know, AI to AI payments. I don't know if you guys have thought too deeply about this, but yeah, curious, curious how you guys see this world developing.

I definitely, we believe that there's definitely going to be a world where AI agents are going to be swallowing up payments for retail and consumers and institutions as well. So we're actually working on deploying our own AI agents in 2026. But in addition to just having like AI be sort of another channel for like payments to be executed, we want to also like think about AI for the user experience as well. So again, like going back to like basics and like foundations of like, you know, getting onboarded onto the platform and going through like KYC and KYB, how could we enhance that through AI today, which is a little bit outside of scope of like agentic payments that you've asked about, but we're seeing sort of the developments in the early stages of AI agents start to come to market that will be executing payment transactions or on behalf of individuals. So Uh, we're starting to gear up for that, but I think we're still sort of, uh, in the developing phase.

Yeah. Eric, any thoughts on this one?

I try not to comment on AI stuff because it's like a whole nother deep niche of the world that I will only sound very stupid commenting. It's far from my expertise.

That makes two of us, actually. That makes two of us. What about, um, maybe a different place that we could go that'd be really curious to get Eric your take on is general purpose chains versus specialized chains. And we've talked a little bit about this in the other episodes that we've done. But maybe with— how do you guys think about— there are some payment and stablecoin-specific chains, I think Plasma, another one was Stable. You know, we see Circle is launching, I forget what it's called, Arc, I think it is, their own chain. How do you guys think that these payment and stablecoin specific chains will develop and what kind of, what are the pros and cons of those?

I mean, I'm super interested to hear Mo's point of view on this as someone who would be kind of, you know, more of a chain shopper than anyone. But my point of view on this is that I think what you're seeing is a common symptom of the fact that a lot of the chains that we have today just don't quite work because they don't offer configurability at certain important layers. Like if you look at a lot of these corporate chains, they want to fine-tune, well, what's the right amount of decentralization so that I can make some trade-offs about finality times? Or, you know, should I pick specifically who the validators are so that I could get sort of more deterministic or responsible behavior out of people? Or do I want to configure the fees to be in a stablecoin instead of the native currency? There are these kind of, you know, ballpark half-dozen configurations that are driving a lot of L1 and L2 design. And it's because when I go to use mainnet L1, generally speaking, those are predetermined for me and I can't configure that. But the really sort of nasty outcome of that, in my opinion, is there's this tendency that people think, okay, I'm going to build an L1. It's kind of like building a product or a platform. But building a network is a whole nother beast. Network effects and ecosystem of complements and the trade-offs of what's good for the goose may not be good for the gander sort of a thing. And those sort of difficulties in trying to play that off of each other. The concept of building networks and network effects is a very tricky thing to get right. Not to say that people can't figure this out for platforms or products, of course. Many, many successful companies have. But I think it would be better, and this is a hallmark design choice of Canton, that you would give people those configuration options within the same network. So it's completely possible to build something that has all the attributes of ARK or Tempo or any of these other systems in Canton, and that it would still be natively composable with everything else in the ecosystem. That to me is really what's missing from a lot of these general purpose networks is that they're really not network of networks. And for the ones that tried to be network of networks thus far, there's no composability across the subnets. So it's the process of, okay, today you do this other thing and then you're in a bridge scenario to the rest of the world. Well, at that point, maybe I should just do my L1 or L2 because I'm not really part of the bigger network. So that to me is kind of the— just so many of these things proliferating is saying to me that that stuff isn't really quite working for people today.

I would give an— I'll give a different point of view from what we're seeing from like a market perspective is— excuse me— a lot of times customers don't really care. You know, which blockchain, you know, you're operating on. They just want the fastest and the cheapest method to move money leveraging the technology. So with that said, there's always a question out there of like, does the world need another L1? And I'm not sure the world does. There's plenty of options out there in terms of specialized L1s and L2s doing similar and different type things. But I think like we talked about earlier is like we're going to see sort of this consolidation happening where there's only going to be a few chains that are going to be specific to specific use cases that are just doing things a little bit better than the others. For our system, it's again, like one of our key factors is that we try to remain interoperable. But I could tell you that there are times when those configurations that Eric mentioned are some sort of hurdles that our team is working to get over. But again, from a market perspective, a lot of people just don't care or know.

Yeah. Yeah, that's really interesting. Maybe as we start to think about wrapping this up, like, I'd just love to hear any— you guys are so close to the metal with a lot of what's happening with stablecoins. Is there anything that's starting to feel obvious to you, Eric, and to you, Mo, that you think maybe the rest of the industry is missing?

Oh, God. Obvious? No, I'm not so egotistical to believe. View should be considered obvious. Um, no, I mean, some, some pattern— I mean, if you're saying what are some things that stand out to me, what some of the things that stand out to me are that a lot of what's driving stablecoin flows right now are things that look a lot like a flow that could be contained inside of like a Venmo or something like that. So there's an incredible amount of sort of price pressure on these chains because the alternatives, the tech requirements for the alternatives are very low. You know, some in many ways, like in the stablecoin sandwich, for example, it's even self-contained, right? Like, I just need a location to do this and I'll, you know, I'll take it with me. And I think that that's producing a lot of leverage to those, to those entities driving those flows. And that's creating a lot of downward price pressure on fees in the networks. And a lot of the stuff that has tremendous value, like if you think about ETH's fee structure, when you think of all the things you could compose in ETH and all the DeFi use cases and all that sort of stuff, that could justify a much higher fee than something like a stablecoin sandwich workflow. So again, just kind of having this universal one price to do everything in the network is creating some interesting dynamics on these chains. And I don't know if that's good or bad or healthy or otherwise, just that you kind of see a pretty, pretty strong price war going on. And a lot of that just comes from very low barrier to switching costs and a lot of agency from entities like HiFi. So that seems to be happening at scale in a lot of different areas. And the other is just that we are starting to scratch the surface on the use cases that are outside the the casino. It's barely even landed yet. I mean, you see headlines every day about exemption here, you know, asking for approval to do this there. But those flows haven't really turned on yet. And the scales of those things are massive. So it's kind of tempting to look at the current trends and go, oh, it's growing, but modestly or not fast enough or whatever that may be. And they're not taking into account that these early stablecoin workflows are helping prime the pump for acceptability of being in these ecosystems. Systems and using them and getting accustomed to using them and depending on them in certain ways. And then that's opening up the aperture to much bigger opportunities.

Yeah, well said, Eric. I'll just layer on top of that. I think like you mentioned, it's these opportunities that we don't see today that is what's super exciting for us here. Every day we're having conversations with new builders or new organizations that are looking to deploy stablecoins in unique ways. You know, we talked about cross-border, we talked about remittances, but payroll is also starting to pick up. So there's new use cases in different parts of the world that we're seeing start to happen. And, you know, I think these type of like infrastructure companies providing the tooling, the picks and the shovels for builders to actually build and deploy stablecoins are going to be critical for the next wave of adoption in order to allow builders to deploy sort of those unique experiences for, for, for retail consumption or even B2B use cases.

Yeah, 100%. Mo, Eric, anything that we didn't talk about that you think we should cover here?

Mo, could you, can you talk about what you think the biggest one or two corridor opportunities are for you in terms of like, not TAM, because, you know, that, that's just kind of an exercise in numbers, but more this unique combination of there's an audience that's ready, willing, and able. There are the right enablers in place, like the right on and off ramp components. And, you know, that it's kind of underserved. Do you feel like there's a, there's a zone on the map for you?

I think, I think Japan, um, into the US for tokenized treasuries is a huge opportunity. That we're just starting to discover and explore currently. Um, with Japan being the number 2 holder of US dollar treasuries in the world and with their current economic situation, I think there's an immense opportunity to help institutions and large banks in Japan sort of go in and out of the capital markets and tokenize treasuries really efficiently. So there are some pilots that will be kicking off in early Q1 that we're super excited about. The other one is the UAE. So I actually just spent the past 3 months in the UAE building up our operations there and our presence. And with, with Durham-backed stablecoins now approved by the central bank for cross-border movement, I think there's an opportunity there to unlock some unique remittance corridors. For example, there's about $4 billion a year that flow to the Philippines. And that's just one specific corridor that we're seeing sort of that large money movement happening. But I think as countries start to spin up and dominant local currency-backed stablecoins start to come to life, we'll start seeing more opportunity to unlock sort of specific corridor cross-border remittance use cases.

Nice. Awesome, guys. Well, this is, this is great. Eric, thanks for joining again as always. And yeah, Mo, a real pleasure to have you on, man. Congrats on everything with HiFi. And I know it's just very early days with what you guys are building. So yeah, congrats.

I appreciate it. Yeah. Thank you, guys.

Thank you.