Stablecoins: Hype vs. Reality with Fireblocks’ Ran Goldi

Let's get to the big story breakdown.

It is the final day of money 2020 Europe over in Amsterdam.

The conference has featured key announcements.

Deutsche Bank has partnered with MasterCard on open banking.

Meanwhile, Clarina is piloting a new card with Visa, and who could forget about Fintech TV.

We announced our new taking stock program as well as strategic partnership of Point Telegraph.

Well, FinTech TV's founder and CEO Vince Minnari has been live on the ground these past few days, and he joins us now with the latest from the conference.

Hi Vince.

I'd like to welcome Rand Goldie, who is the senior vice president of payments at Fireblock.

Goldie, welcome to the show.

Lovely to kick us off.

Tell us a little bit about Fireblocks and what's going on there.

Well, I guess for people who are not familiar with Fireblocks, uh, we're basically the largest infrastructure provider in the space of digital assets, and when I say infrastructure provider, I mean.

The provider of wallets, for example, for companies like Robin Hood, for Revolut, for Newbank, providers of money movement and orchestration technology for like Visa and Willpay to move stablecoins around the world, and a provider of tokenization infrastructure for a lot of companies who have built their stablecoins based on our infrastructure.

Yeah you said it all right there.

That's brilliant.

Hey, you know, you mentioned stablecoins in in the intro there.

There's so much fervor, uh, you know, all this froth going on in the conversation about stablecoin.

Give me the reality of the world.

Yeah, that's, that's actually a really good point.

I mean, if, if you're an alien that's just coming into Earth right now and you would accidentally open my LinkedIn, at least, you would think that stablecoins are so hot right now, they can probably cure every disease in the world.

Well, Let's, let's say this stable coins are probably overhyped a bit, but it's not because they don't have value.

It's because a lot of people are not super excited about that value, and I think that there, there is value just the same way there's value at Fed now.

There's value with Zelda.

There's value with picks, you know, in Brazil, value with Spain and Mexico, it's how you use that.

I think stablecoins are really going to turn this financial ecosystem into something that's way faster than what it is today.

One question for you then, is faster always equal cheaper?

Well, that's, that's actually a, a, a big misconception.

I feel that people are might be experiencing right now.

Let, let's put that out there.

Table coins are not cheaper.

Table coins are, you heard that first here from Goldie.

They're definitely more transparent.

I can tell you at any point in time where's your payment, but.

It's not about the cost, it's about the velocity of money.

The fact that well let's let's talk about a use case.

The fact that an importer can pay an exporter from, you know, Brazil to Singapore, Hong Kong in, let's say 10 minutes instead of 3 days allows that importer to use more of their cash and do more import more goods, right?

The velocity of money that changes the behavior of these merchants that gives them the real benefit.

The cost is pretty much the same as a swift transfer.

So great benefit is not necessarily you're saving money is that you could do more with your money faster reaching greater opportunities or markets that you couldn't reach previously 100%.

I'm learning, Goldie.

This is only session one.

This is gonna be pretty good.

You gotta come back to session 2.

We'll have more.

Don't worry, we'll have more.

OK, so I'm all about learning from surveys and market participants.

Fireblock just did an amazing survey.

Kick it.

Tell me, I think it was 300 institutional participants.

Exactly.

So, so we did this thing called Sablecorn Report.

We try to do it every year.

I think it was super interesting this year because as you said, we brought 300 payment companies and financial institutions that includes banks and every type of fintech and I think if I try to remember like the key findings, one of the most important key findings was that actually 90% of them are now gearing up and that was crazy for me because, you know, 2 years ago it would probably be like 10%, right?

That's number one.

Second thing is if you would go to.

Our survey two years ago, 85% were cited as thinking that regulation is a huge challenge.

Look at today's number.

It's about 18%, right?

It's year over year now.

That's like a 2 year turnover in a way.

That is crazy, right?

And I think the last thing that I want to say is that they're not coming in this just because it's super hype right now.

Or because they think it's cheaper, I, I hope those payment companies know it's velocity.

We learned about velocity exactly.

They're coming into this, by the way, because they look at the revenue opportunity.

They think they can get to unlock markets that they can't access right now or potentially offer a service they don't offer.

So that's a tremendous point.

So I'm gonna go back to the velocity.

So the velocity component is driving additional or incremental revenue.

Yeah, because they, they, again, these payment companies, you know, what do they do?

They move money day in, day out.

The margins are small, obviously they have their own capital, but they sometimes they need to park it in all sorts of places.

So when you bring stablecoins into the mix, treasury management becomes more effective.

You can use more of your capital, you can create more revenue.

That's the game.

Anything else within that survey that you want to share with us before I give you our closing out question?

Yeah, I, I, I think like, you know, what I found super interesting is that And maybe it's obvious, but the countries where we see this evolving the most are the Latin American countries, and it's also not just because of the maybe the velocity factor of that that there's actually a lot of consumers over there that would wanna, you know, use the stablecoin dollar basically to to hold, uh, you know, more economic.

Value as per their volatility in their local currency, right?

And that's interesting because I believe that will eventually drive on a payment economy that these people will pay with a stablecoin might not be the dollar one.

Hopefully we'll see more local stablecoins, but I think we're now seeing the, the grassroots of something that's gonna be big in the next year or the one after.

Again, you heard it here first, very interesting, you know, you have so much insight, Goldie and I, and I truly appreciate that.

You know, I, I wanna get a little sense of banks, we hear so many conversations about the banks.

Is that, you know, fact or fiction they come into play.

They're still on the sidelines.

Do you have any sense of that?

Yeah, so over the past probably 7 or 8 years that we've been around and again we serviced today 2300 institutions.

We've processed last year 3.6 trillion.

So we, we've seen a lot of, of, of volume.

We haven't seen a lot of banks, right?

But only in the last, I want to say 6 to 8 months since obviously the sentiment has started to change, administration changed, Mika rolled out.

We've seen more banks coming in the last 6 months than we've ever talked to in the last 8 years almost.

Now does that mean that they're actually gonna go live next month?

No.

Will they go live by the end of this year?

I don't think so, but it tells me that this is coming.

2026 is probably gonna be the year of the banks in this space.

So tremendous signal, it's coming up.

So 2026, the year of the banks.

Yes, sir.

Goldie, love the conversation.

Come back and see you soon.

Thank you, hopefully, it's a pleasure.