Chris Harmse (BVNK) on Building Global Stablecoin Infrastructure (EP.522)

This episode discusses the evolution and expansion of stablecoin infrastructure globally, focusing on the contributions of Chris Harmse and his company, BVNK.

1. BVNK's critical role in powering stablecoin operations and its substantial growth, handling over $6 billion in annual payment volume.
2. Stablecoins are gaining traction as a preferred method for cross-border transactions, remittances, and corporate payments, thanks to their stability and efficiency.
3. The evolving regulatory environment is crucial for the future of stablecoins, with significant developments expected in the U.S. and EU.
4. Interest in stablecoins is expanding beyond niche markets to encompass a broader range of financial applications, including digital remittances and business operations.
5. The potential integration of stablecoins with central bank digital currencies (CBDCs) could revolutionize payment systems globally.

1: Introduction to BVNK

Chris Harmse discusses the foundation of BVNK and its mission to streamline global financial transactions through innovative stablecoin solutions. Matt Walsh: "Welcome Chris, excited to dive into the world of stablecoins with you."

2: Evolution of Stablecoin Use Cases

An exploration of how stablecoin applications have expanded from basic trading to complex financial operations like payroll and remittances. Chris Harmse: "Stablecoins are now about 70% of blockchain transactions, a testament to their growing utility."

3: Regulatory Landscape and Future Outlook

Discussion on the current and future regulatory environments affecting stablecoins, particularly in the U.S. and Europe. Chris Harmse: "Regulation is evolving, and it's crucial for the continuation of stablecoin adoption."

4: Challenges and Opportunities

Harmse outlines the challenges in the stablecoin space, including regulatory hurdles and market acceptance, alongside the vast opportunities for innovation. Chris Harmse: "The next few years are pivotal for stablecoins, with potential massive shifts in how money moves globally."

1. Consider using stablecoins for cross-border payments to reduce costs and increase speed.
2. Businesses should explore integrating stablecoin payment options to cater to a global audience.
3. Keep abreast of regulatory changes in the stablecoin space to ensure compliance and leverage new opportunities.
4. Evaluate the potential of stablecoins in reducing reliance on traditional banking infrastructure, especially in developing regions.
5. Explore partnerships with stablecoin platforms to enhance your business's financial operations.

Chris Harmse, co-founder and VP of Revenue at BVNK joins the show. In this episode we discuss:

Chris’ career and the path to founding BVNK. The origin story of BVNK and how the company has evolved over time. The key drivers behind the adoption of stablecoins. Segmenting the stablecoin market. Interest bearing stablecoins and the impact that this category will have on the overall market. Tokenized money funds and the future of securities settlement. How stablecoins will refactor the global FX market. The regulatory landscape and how stablecoin adoption is evolving in various regions. To learn more about BVNK visit their website.

People

Chris Harmse, Matt Walsh

Companies

BVNK

Books

None

Guest Name(s):

Chris Harmse

Content Warnings:

None

Matt Walsh
Today on the podcast, I sat down with Chris Harms, a co founder of BVNK. BVNK is a stablecoin infrastructure company that powers the on and off ramps of hundreds of companies building in the stablecoin ecosystem. This was a fun episode where we talked about the emerging use cases for stablecoins, the segmentation of the types of stablecoins that exist today, and the global regulatory landscape in this category. I think you'll enjoy this one. So without further ado, here's my conversation with Chris Harms of BVNK.

Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them were the guests on the podcasts are solely their opinions and do not reflect the opinions of Castle island ventures. Guests and hosts may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is, for informational purposes only.

Matt Walsh
Brought down by bad mortgage investments Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International group AIg $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping in to stabilize Annie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing.

You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry we have something called the bitcoin. Bitcoin. Well, Chris, thanks so much for joining us today on the podcast. Always love talking about stablecoins.

Matt Walsh
So thanks for joining. Yeah, thanks for having me, Matt. Super excited for this conversation. It's a hot topic, stablecoins at the moment. Well, I think BVNK is probably one of the larger companies in the industry that maybe people in the US don't have a great perspective on.

So we'd love to just start with your personal background and the path that led you to start the company. I actually have a trading background, like, I guess many of us in crypto and I did a bunch of different things at banks, but mainly spent a lot of time doing cross asset trading and a little bit of an equities desk. And majority of the time was actually spent on an FX and interest rate desk at BNP Paribas. Really trading FX spots across the semia currency. So that kind of shaped my early years in trad five, it was my introduction to payments without knowing I was doing payments, given thought you were doing capital markets, but at the core, it's really just payments.

Chris Harmse
So kind of cut my teeth there. Got a bit jaded with the banking industry and I guess the payments infrastructure and financial market infrastructure more broadly, where you could execute a trade in a millisecond. But wait t two for spot to settle. And sometimes when payments didn't settle, chasing mt 103 messages around being on a spot desk, you kept seeing things pop up in your Bloomberg terminal, like bitcoin and that sort of thing. So you take notes and you chatting with the guys on the desk about it, start doing a bit of research, but then it wasn't.

So I left banking in 2017 and linked up with an ex business partner of mine who we wanted to set up a multi strapped fund. And so we did that. And inside that fund, we went deep down the crypto rabbit hole and started trading crypto. That was kind of through the 2017 ICO boom, very much approaching crypto as a new asset class. But as we did that, we saw these things, stablecoins pop up where you could start doing arbitrage trading strategies between different platforms.

And we were doing that. We started becoming significant users of stablecoins in our own day to day and starting to take that FX and capital markets and payments infrastructure background that I had at the bank and looking at how crypto and stablecoins and that's what sinkers start solving that wanted to go deeper down that rabbit hole hedge fund didnt really work, but learned a lot at the time, but squarely wanted to be stuck and work fully in crypto. And through my ex business partner, actually got introduced to Jesse and Don, who are one of my co founders. And while I was busy in 2017 working on the kind of hedge fund and crypto fund and that sort of thing, Jesse and Don, who are both exited farmers in their own right, were building a retail crypto exchange in Africa under the moniker of the coinbase of Africa. I think back then, given what happened in 2018, I realized consumer crypto probably wasn't as developed as we needed it to be.

But businesses were starting to use stablecoin to do payments. And it was quite an interesting space back then, still quite early. But we started seeing that Jesse and Don, we're seeing that themselves as they were building the consumer business. I was seeing that from a different angle, being on the hedge fund side. And then we linked up, started building out what Penk is today.

At its core, we really building next generation payments infrastructure, combining fiats as well as stablecoins. The mission is really to accelerate the global movement of money, specifically around these pains that we saw in the traditional payments infrastructure and technology stack wanting to make payments and stable coins as accessible and faster and more transparent. Fast forward we headquartered in London, now 270 staff globally we're doing about 6 billion in annualized payment volume. So as you said earlier, fairly significant. Most of that or majority of that touches a stable coin in some way, shape or form.

At its core in terms of use cases and verticals we serve, we really are helping non crypto native businesses get access to stablecoin infrastructure and allow them to build stablecoin payments experiences in a regulatory compliant way. Preston, thats incredible. You guys were certainly very early to stablecoins. I remember being in the industry back then, stablecoins were really just a blip on the radar. But now obviously I think its something like 70% of every transaction that happens on a blockchain is a stablecoin.

Matt Walsh
So wed love to just understand what the original insight for the company was from a product perspective and then maybe how thats evolved over time. What does it look like these days? When we started looking at the stablecoin market, seriously, stablecoin market cap was 3 billion at the time. We know where thats got into 150 billion. Early on we were finding businesses that wanted to access better payments faster, whether it was cross border payments or just better way to pay globally and across borders.

Chris Harmse
And stablecoins really facilitated that. But back then what you had was a business didnt really understand yet how to touch or interact with stablecoin. So we did that for them. We effectively went from the fiat into stablecoin, moved that money on the blockchain in a single threaded payment, got out of stablecoin back into fiat and gave that fiat back to the business. So the net effect was a much faster, cheaper cross border payments, but just leveraging this better payments technology being a blockchain and stablecoins, there were many companies early on that try to do this with bitcoin.

Naturally the volatility doesn't lend itself that well as a means or a way to actually payment technology. So that was kind of the original. And as we went through that we very much built and by design had to, because it was so early in the market, had to go to the pockets where there was stablecoin liquidity markets that specifically needed better payments infrastructure. And through that ended up building a multi stable coin platform and allowing merchants and then soon psps to start accessing stable coins. And as we saw stablecoin adoption drive up over the last couple of years, we really saw businesses starting to want to interact directly with stablecoins and not just do the fiat stablecoin fiat but actually just fiat stablecoin and then operate in stablecoins.

So it started from that kind of very early days, just as better payments technology, to now businesses really interacting with stablecoins themselves versus just interacting on the fiat side. Its fascinating. One of the things I always say is that if you go back and look at some of the pitches that we used to get in 2014, 2015 around bitcoin payments, as you point out, a lot of those things didnt work because people wanted to hold a more stable asset for these transfers. And bitcoin being as volatile as it is, just wasnt really designed, I would say, for that use case. We see this emergence of a bunch of companies that maybe would have been viable back then if there were stablecoin rails.

Matt Walsh
So id love to understand where you see the use cases right now driving stablecoin activity. It started in the trading space and now were starting to see a proliferation of other use cases. How do you guys think about the use cases that drive most of the activity on your platform? Weve very much been in quite a unique position given we really think of ourselves as an infrastructure. Payments infrastructure enabled merchants directly as well as payment companies to access stablecoins.

Chris Harmse
And we see it obviously developed through our product roadmap and we deliver that. Our products really kind of enable a couple of use cases. And the main one really is crypto checkout. So this is exactly what it says. It allows merchants and PSP to accept crypto payments just like you would log in on a platform.

I want to pay with a credit card, I want to pay with my PayPal, I want to pay with crypto. Our suite of APIs powers that pay with crypto. We find that merchants then have a number of settlement options. They can either take the settlement in stablecoin after collecting, let's say BTC heat and other stablecoins, they can take the settlement in stablecoin or they take the settlement in fiat. So that's a real very fast growing use case.

And we see trading platforms, CFD type platforms or stablecoin deposits becoming the number one deposit method on their platform quite quickly once they launch. With us, we've got customers like Exim Global equity ife markets, neo brokers, name brand new brokers globally who have a global customer base, and this one form of digital money that allows them to accept deposits from multiple different jurisdictions is to be exciting for them. So that's one use case where very much a c to be use case allowing merchants to accept crypto payments. A second use case that's really exciting to us. And we've been ideating around this use case and it's been around in the market for quite some time in terms of thinking through it, but we're really seeing it come to life, I guess, over the last twelve months.

And that's really b two C stablecoin payout. So we've just recently signed deal, the global payroll company, where they're using our infrastructure to pay their contractors in stablecoin. When you think through that, why it makes a lot of sense. These are contractors based globally, generally in emerging markets that have volatile currencies. They can't access dollars very easily.

So providing them a way to receive digital dollars as a means of payment for services rendered is really something that's exciting part and we see a lot of growth in this because it's not just global HR or payroll platforms, but you're then seeing gig economy platforms trying to pay creators or even as far as Uber drivers or that sort of thing getting paid in stablecoin. We see a world where this comes to play over the next couple of years. And then the classic one, always remittance flows remittance. Today you can look at the US LAtam corridor, the European Africa corridor. The end beneficiary in these destination markets would much rather receive a digital dollar thats ahead against their local currency and hold onto that.

And we do find that many of those end users are actually very crypto native. If you look at those analysis geography of crypto reports that are very good, they show those that top ten index of companies that show where the crypto is moving to is generally those same recipients of remittances. So those are high crypto adoption. They understand that theyre digitally native, generally quite young, and would much rather receive their remittance in digital dollars. Given the infrastructure that we have, pay ins, payouts, the full suite of fiat, as well as crypto licensing we do.

And we started to see fintechs who are looking to launch stablecoin wallets themselves, using our infrastructure to embed stablecoins into their platform and offer their customers the ability to send and receive and hold stablecoin, and then also get in and out of stablecoins. Weve recently done a deal with free market FX, which is a big payments fintech in the UK who had this exact need driven by their merchants and their customers. The remittance one is fascinating to me because some of these companies that have emerged to really service that use case, I would say, are some of the fastest growing companies in this industry. So im curious, your perspective on the legacy players in that remittance market. Are they aware of how disruptive this technology is?

Matt Walsh
Are they doing anything to respond? Lets say you go back ten years and you think about the first generation of fintechs. They used outdated payments infrastructure being I guess the swift messaging network, correspondent banking network, and they built really amazing UI and UX experiences on top of that infrastructure and then really had to do the heavy balance sheet lift to them. Free funding accounts in all these markets. You take transfer wise, for example, entities in multiple countries, licenses in those markets and having to hold liquidity in all these markets.

Chris Harmse
So those original fintechs have done a great job at optimizing these flows moving around the world. But I think step in blockchain and stablecoins do now have this upgraded infrastructure where you could rebuild these same remittance corridors using stablecoins. So they definitely looking at it, I think two, three years ago in 2021, they were looking at it from a distance trying to do something. We then saw 2022 is the watershed moment for the payments use case in crypto, when you saw north of 10 trillion in assets, more than the Visa network, I guess settled in stable coins, and I think that made them take notice. And we see fintech starting to move now.

So there are a lot of big fintechs that are a couple of use cases developing. Where they going? Look, I'm going to start first as a treasury optimization. How do I move money from this market to that market more efficiently using stablecoins and then later open up the ability for my customers to fund me in stablecoin for remittance, a fiat remittance payout. So that's a use case.

We're starting to to see some of the traditional payments and remittance fintech look at, and then ultimately the direction of travel seems like, look, we are already doing these payouts and remittances into push to card, push to digital wallet, whatever, push to mobile money. If you're talking about Kenya or something in Africa, they see that they're going to have to be able to make stablecoin payouts as well alongside their product debt. I think it's dawned on them, some of them are moving really in some interesting early conversations with some of the biggest remittance players in the space looking to run a couple of pilots, but it's an exciting time and I think they know they're going to get left behind if they don't upgrade to better payments technology and take this seriously. I'd be somewhat shocked if we don't see some of those traditional players start to enter this market from the perspective of being an issuer. And obviously in the US market, the absence of a stablecoin bill has probably held back some issuers who would like to be in this market.

Matt Walsh
But it's been really interesting to me to just look at the segmentation of this market and what types of stablecoins are popular in certain regions. Obviously, tether on Tron appears to have a stranglehold on certain geographies. So how do you guys think about just segmenting the different types of stablecoins at different geographies where issuers are more or less strong? Weve thought long and hard about this. I guess youve got a matrix where the one axis is really centralized to decentralized stablecoins.

Chris Harmse
So centrally issued stablecoins tether circle back first, decentralized ones die and make it down there, obviously in several others over the years, but I guess thats the main one around. And then kind of somewhat decentralized. Now falling in the middle is something like Athena, where they've made some trade offs on the decentralized side for more scalability. So I think that's how we think of it, from a centralized or decentralized on the one axis and then on the other axis you really have to think about privately issued versus I guess nation state issues. So now we're talking the tethers and the circles of the world versus CBDC.

There's north of 100 CBDC projects. So that's kind of a matrix or framework that we used to think through. To your point, weve definitely seen regional differences and use case specific differences across the different issuers. Naturally, the privately issued centralized stablecoins today have significant market share. Liquidity gets more liquidity and theyve really had a good head start.

Weve seen that use cases in Asia specifically. So whether those B two, B or B two use cases had a big stronghold out there, liquidity was there and you saw USDT more prevalent in those markets. Similarly in Africa, USDC was always slightly, has got a really good market share. In Europe and actually the US as well, we saw kind of a bifurcate that way and then also very much across what chains these were running on. So in nifty obviously, all of it was almost USDT on Ethereum and you had to go there and do that because of the only place you really had liquidity to be able to enable any payments due scales at scale.

But we slowly saw that shift a couple of years ago we had this gas fees and we saw a big swift shift to Tron that we quickly responded to. Customer demand and liquidity then enabled TRON. And we see very much on TrOn. Asia seems to be the main one. So there's definitely these regional differences and there's always a market share fight going on between the centralized, the shit stable coins.

But it's going to be interesting to see how it develops as a proper CBDC I guess gets launched math market and what that does to the market and some of these kind of more decentralized alternatives like Athena. And that has been doing pretty well as well. Its interesting you bring up the CBDCs because I would imagine that would be a big opportunity for you guys to just off ramp into a CBDC in some of these jurisdictions, depending on how many of these things start to pop up. Exactly. And thats exactly what were watching is weve very much taken a multi stablecoin, multi asset approach.

And the way we think about that is you go back some of the ripple in its early days, a singular asset trying to do cross border payments messaging for lack of a better term, single blockchain ripplenet. Then we had the proliferation of stable coins like circle and tether single asset multi blockchain. So we very much were like, look, multi rail, multi assets and multiple blockchains. We support five or six blockchains and keep responding to that and multiple stable coins. But as cbdcs come into that, we will just be able to, depending on what blockchain it's running on, integrate that into the platform and support those as well.

We do see that multi rail, multi stablecoin platform as an advantage and allow us to be quite nimble if some of these come to market and make significant headway. How about interest bearing stablecoins? So in a zero rate environment, I guess no one really cares about the interest that comes off of these things. But in a 5% rate environment, obviously theres a pretty big take rate there for a stablecoin issuer, and the stablecoin issuers in the US are just structurally unable to pass through that interest due to securities regulations. But that is not the case obviously, in other parts of the world.

Matt Walsh
So how have you guys seen interest bearing stable coins enter this market? Do you see that category evolving and being a big piece of this puzzle? Exactly to your point, its been a very exciting development for the last couple of months, lets say years. Several guys have been working on this. But if you zoom out, as you say, a 5% interest rate environment, thats great for the stablecoin issuer but not that great for the user, whos effectively driving all that volume and that market cap for the issuer.

Chris Harmse
Weve all seen teddy results on a quarterly basis and that sort of thing. So I think its really putting some of that choice back to the user. So if you now have a stable coin, youve got five or six different stable coins to choose from, ones paying you some yield. You no longer have this opportunity. Cost of my dollar deposit in the bank is earning me 5%.

I can actually keep my money in digital dollars, still receive that yield. So you dont have to, the consumer no longer has to make that trade off. I think thats really positive. Just generally for the consumer and the users of stablecoins. I mean you can look at UsDY and the different ways that theyve managed.

Condo finance has brought Usdy to market. Super interesting. So I think the trend is generally trying to figure out how we pay interest on some of these stable coins. And naturally you think about some of the use case lots of collateral tied up in trading positions. That is earning many people nothing.

Now you can use an interest bearing stablecoin to put in as the trading collateral inside a crypto exchange. You no longer have to make the trade off between fiat and crypto. You can now hold crypto dollars or digital dollars and still earn your yield. We think its very exciting development and I think theres just more to come. Some guys are due to regulation structure, not able to pass some of that yield over.

But some markets are making it a little bit easier given the regulations headed. Its really interesting. We had done some analysis and I think if you look at stablecoins as a category, theyre something like the 16th largest holder of US Treasuries, which is pretty staggering. You go a step deeper and you just look at tokenized money funds as an opportunity here. So BlackRock has recently tokenized a money fund.

Matt Walsh
If you look at stablecoins, I think they're probably top 15, top 16 in terms of just comparison to issuers of money market funds in the US. So the largest asset managers in the world are obviously leading that BlackRock infidelity. But do you see tokenized money funds as being a viable category within stablecoins? How do you think about that as a potential new wave of issuers? Great trends that we're seeing, but personally, I almost always thought of stable coins as tokenized money market funds on the blockchain that just kept all Nim if you had to summarize it, but if you had to break it down to the nuts and bolts, that's what it was.

Chris Harmse
But now, obviously, we've had this blackrock formalized that for tokenizing one of their money market funds. And it's really good to see that, because what that does is it brings the efficiency of the blockchain to stable coins, or at least money, what's traditional capital market infrastructure. Because quickly after Blackrock launched that bit ol tokenized money market fund, Ondo went and said, look, were now going to back the majority of our collateral in bill because it gives me that instant redemption. So I no longer have this disconnect between redemption of these assets. I can actually get the efficiency of the blockchain inside my own yield bearing stablecoin.

So I think its kind of a step forward in terms of the efficiency of using a blockchain in capital markets infrastructure. I do think it's going to proliferate into more and more use cases, just like we've seen with Ondo quickly switching out the traditional tradfi version of the fund for the tokenized version of the Blackrock fund. I think it could even create a whole new category. I remember back in 2016 when private blockchains were all the rage and people were talking about tokenizing different types of securities, bringing them on chain, and you'd kind of go through the workflow of how something would actually settle and it would be okay, we have this asset on a blockchain, it's going to move. And then you'd get into, how do us dollars move on this?

Matt Walsh
And they'd be like, well, we have a wire transfer and it settles t two, or I think back then t three. But you don't have to squint too hard to see that. Maybe BlackRock is looking at this and saying, well, what if we could just use a US dollar in the form of a tokenized money fund and actually settle securities transactions at some point? I wonder if we'll see a wave of institutional adoption here, just in terms of securities settlement at some point. Youre 100% right.

Chris Harmse
You can definitely see that a lot of the innovations that happen in capital markets and just securitized products and that sort of thing has been way ahead of that settlement infrastructure. And now youre given a way to actually upgrade the settlement infrastructure on those trades themselves. So I definitely think with Blackrock name behind it, you can easily see that new category develop where a tokenized money fund, as you said, becomes the settlement currency across multiple other real world assets or real world security settlements. Its interesting to look at the regulatory environment in the US, which has been pretty hostile id say, since FTX, against all of crypto really, but in particular stablecoins in the sense that theres a bipartisan bill that just hasnt really gone anywhere. But if you look at this, you really say okay, 99% of stablecoins are dollar based and so this is really just proliferating the dollar in ways that were not possible before.

Matt Walsh
So its actually making the dollar a lot stronger as a global currency. Im curious your perspective on just what the composition will end up being in terms of dollar stablecoins versus euros versus other types of currencies. It seems like the dollar is really the apex predator of stablecoins, at least for now. I think the proliferation of non USD stable coins is an interesting, exciting trend to follow. It obviously hasnt kicked off yet in earnest, but if you look at some imbef data on the official FX reserves, USD and FX reserves probably like 59 60% somewhere there.

Chris Harmse
If you look at the dollar as percentage of all international swift transactions, it's about 46%. So still way ahead in keeping its USD dominance despite the kind of de dollarization narrative we had for a while over the last 18 months. And then as you said, you look at stable coins and it's 99% dollars. So if we see a world or a trend to where stablecoin market looks the same as global reserves or payments, where it's maybe dollars or 50 to 60 or 70% of that, you start seeing an exciting world where youve already got a couple of GBP stablecoin issues that are out theres a few euro issued stable coins that are out there, not really got the traction you would see. But lets say hypothetically, we get to a world where youve got a couple of local issued stable coins, whether theyre privately issued or CBdcs, weve got dollars still as the main one in there.

Then it gets really exciting because then you could effectively bring a full end to end payment on chain. So you could take a dollar in the US, get into stablecoin, you wouldn't even need to send that stable coin to a centralized market maker. You could send it to a Dex like Uniswap traded for a Singapore stable coin, send that Singapore stablecoin to the issuer in Singapore, burn it and get SGD out, bringing the entire end to end payment chain on chain. So to speak. So it's an interesting trend that we watching.

I don't think it's kicked off in earnest just yet. I think as you can see the data showing you that dollars are still dominating across the space. But I think theres a lot of interesting momentum specifically with some regulation coming in the EU around Mika and how they want to regulate euro issued stablecoins and that sort of thing. So I think more to come there definitely something to watch but I think definitely gets really exciting because youre bringing a lot of the traditional pipe FX on chain end to end. You could also imagine a world where you can just hold a stablecoin balance at a bank at some point in the future.

Matt Walsh
I think that would also make things a lot more frictionless. You mentioned the FX market. Im curious your perspective on just how stablecoins fit into that landscape. Is this going to fundamentally change the way that FX works as a category? Yeah, I think to some degree it needs to.

Chris Harmse
We were just talking about settlement infrastructure. When you think about how OTC spots settle and how payments settle today in the epics market, its still this t two, its still pretty manual, its still using outdated infrastructure or messaging like Swift and correspondent banking networks step in this infrastructure that's now showing you that there's a different way to do this. It's done 10 trillion of settlements a year at scale. And I do think the only thing lacking to really bring some of this to life is this kind of the rise of non us stable coins. And then we've also seen, I guess treasuries and CFO's starting to think through and put stable coins alongside the other treasury assets on their balance sheet.

So they got their dollars, they've got the G seven currencies. Maybe they're operating in multiple markets with all other emerging markets. And then they've got stable coins right alongside there. Obviously the visa treasury has approved stablecoin settlements in that pilot that they're doing. So we know that visa treasury is handling stable coins as a separate treasury asset.

It really does from a couple of different angles. The one is definitely end to end kind of on chain remittance flows that you could bring on chain. The efficiency you're going to get in real time settlement. A couple of those things coming to life on the back of this is quite exciting. Obviously the regulatory landscape is going to dictate where stablecoins proliferate at scale, which markets take off faster than other markets.

Matt Walsh
You guys, ID imagine, have to have a view on all sorts of different jurisdictions and how you can play in those jurisdictions with stablecoins. So how do you guys just view the global regulatory landscape broadly and how does that inform where you want to take BVNK in terms of geographic expansion? The landscape is moving globally. Were making some serious progress, I think, first and foremost being EU, UK headquartered. Really, we're quite excited about Mika and that getting access to their rules and regulations obviously always allow you to build in a lot more unambiguous way.

Chris Harmse
So we're quite excited there. You've obviously got really pragmatic regulation in Singapore through MAS, where they've brought in a DPT token permission under their kind of payments directive, their NPR life and things, that major payment institution. There's definitely regional hubs of regulation developing Singapore. Arthur APAC seems to be the UK and the EU fighting for that position in Europe, but I think they feeding off each other to some degree. Sadly.

I guess the US is lagging behind, but I think theyre watching quite closely and looking at this long and hard and going, look, were going to need to do something on the stable coin bill. And I actually saw there was some movement earlier today. Some of the senators came out and said they were going to bring this bill back to life, the stablecoin bill, and theyre going to have to, because otherwise theyre just going to get left behind. You're definitely seeing regional pragmatic regulation pop up with some very competent and capable regulators. We're excited for this regulation to go live and income into force.

Matt Walsh
You mentioned the US market. We're recording this on the 17 April, the Lumbus Gillibrand bill was just reintroduced, I guess, which is the Senate version of the McHenry stablecoin bill. They're broadly similar, I would say. So it'll be interesting to see how that unfolds. But, yeah, I'm curious just generally how you think about the US market in terms of opportunities for the company and what this stablecoin bill would mean to the growth of the industry, especially if.

Chris Harmse
You'Re building in Europe and the UK and globally. The US has always seen the big market. It's setting the pace for the last 25 years in terms of technology and innovation. And that's the thing. And we very much see that.

We were looking at the US from a distance, but very much thinking about how do we go in there, how do we get access to dollars. We were fortuitous where we more recently brought over some of the execs from Silvergate bank. They've come over to kind of lead the US expansion. So that's been going really well. We're going state by state on the mpls to get those licenses in place.

I hope this ball comes into play. It's pragmatic. It seems to be looking specifically around payments, stablecoin issuers and how to regulate those, what good reserve management looks like in its current form. It does hold some really good measures to bring innovation back to the US, specifically in the stablecoin. Otherwise you do get, which you guys have been talking a lot about a kind of a offshore euro dollar market pop up for stablecoins all over again if theyre slightly behind on this.

So I think the guys are thinking long and hard about it and hopefully this pool thats reignited itself today is a step in the right direction. Its one of my favorite things about working in this industry is that it unearths all sorts of historical things that have happened in the past. So the euro dollar market is a perfect example of it just got really large and eventually the US had to come to grips with it, bring it into the fold and establish things like swap lines. And really I think that is the risk of stable coins that the next ten x here happens outside the US. But there are us dollars being issued on these chains and theyre all happening outside the US.

Matt Walsh
So its really kind of the disaster scenario. I also worry about an infrastructure in the US where you have to go state by state, as you point out, where theres not just an easier option. Makes it really hard for startups to have to spend $5 million to go to every state to get licenses where you can. It just doesn't seem like the way that that's how it should evolve as an industry. No, no I would agree with you.

Chris Harmse
And I think the US could probably take a further out of the EU, get this passporting capability across all EU member states with one well written, well thought out for legislation and hopefully at some point it unifies that way and you can get that same sort of state level regulation. But it remains to be seen I guess. Well Chris, this has been fascinating. Always love to talk about stable coins and you guys are certainly at the forefront. Where can we send of people to learn more about BVNK and to get.

In touch, come check us out on our website, bvnk.com dot. We also super active on LinkedIn. We actually have a really interesting report dropping soon at the end of April called strategies for stablecoins. So we've spoken to several leaders across the payments ecosystem, whether those are VC's issuers, embedded banking providers, and trying to get their views on stablecoins and looking at some of the emerging use cases. So if you want to get access to that report, best way to be LinkedIn bvnk.com come through, and that's dropping at the end of April.

And then if you want to contact me directly, LinkedIn is the best place you can just reach out. And if there's a couple of collaborations. You want to explore, that sounds great. Well, Chris, thanks so much for joining us today on the podcast. Awesome.

Thanks so much, Matt. Thanks for listening to another episode of on the Brink with Castle island. To find out more about Castle island, visit Castleisland VC. To listen to all of our podcast episodes, please go to onthebrink dash podcast.com or just click on the tab in our website. Thanks for listening.

Matt Walsh
Thanks for listening.