Well, banks continue to embrace digital assets, and JPMorgan Chase will begin accepting crypto, Bitcoin, and ET as collateral for loans by the end of next year.
And this is a big reversal from CEO Jamie Dimon's prior remarks that crypto would be crushed.
Well, yesterday, Citi announced a partnership with Coinbase on using crypto and a staple coins for payments.
Now Silicon Valley Bank is a regional bank that has Historically played a big part in helping fintech startups grow, and they're here at Money 2020 amid this institutional rush into digital assets.
Well joining me live from the floor of the convention hall is Anthony Vassallo, senior VP of crypto for Silicon Valley Bank.
Anthony, great to have you here.
Thank you so much for joining me.
Good morning.
Thanks for having me.
Well, there have been plenty of announcements, but I do want to start small.
What do you think is driving this growth in crypto?
It's interesting.
A year ago our clients would they're always asking how do we raise money and what's the access to capital, but they were also asking what are the rules, you know, what the rules are going to be.
With that regulatory clarity, I think they have more confidence in not only building but making announcements.
Also, record inflows into ETFs and speculation as well.
And I think VCs are following what's truly being built as well.
So it's not just speculation into the asset class.
I think the VCs are following what's sticky in terms of utility with certain categories, and they're also Disciplines, so they're less shy about writing checks, even though there are headwinds generally at VC.
We see a lot of tailwinds at the intersection of blockchain and FinTech.
And for viewers who might not be as familiar, tell us about the different categories and how they're perceived by your stakeholders.
Yeah, I think there's just this overlap and there's this blurring.
I, I joke sometimes that Pitchbook is going to need to re-categorize in a few months because they're, for example, they count blockchain investment as part of FinTech, but infrastructure is catching up generally, so, um, and I would say that the infographic is changing a little bit, but you're seeing a lot around AI not only empowering these businesses, but VCs investing at that intersection because the incentives make sense together, more investment, more tooling for enterprises as financial institutions take more interest and want to extend their core business, but are a little less privy as to how to incorporate these new payment rails as well.
Um, and then generally stablecoins as well.
So, Before we've seen, of course, Bitcoin prove itself as a store of value, but in terms of sound money, I think the financial institutions and the VCs are buying into as well that this is payments and this is medium of exchange.
Yeah, and you brought up.
AI, so artificial intelligence, whether we're talking to institutions or even retail investors, we know that they're familiar with AI, but although this is an opportunity, what really needs to happen, especially in a regulated industry when it comes to transformation.
Yeah, it's, it's interesting that the incentive models align really well.
I think common complaints that you see in the classic centralized models that we use right now are potential censorship resistance or holding back or just divulging data to a monolith that you might not want having access to your proprietary information.
But what crypto offers AI is the infrastructure, the trust, and the incentives as well.
To not only get rid of some of those concerns, but to bolster the results that AI is giving.
So if you just look at the unit economics of blockchain and the ethos and apply that to the outputs of AI, it's a really strong um intersection.
I will say that it's being built, but the adoption isn't really there yet because the centralized models have such an advantage in their lead with network effects.
And finally, Anthony, before I let you go, I have a burning question for you, and you spoke on this yesterday.
So in a nutshell, can efficiency and payments still make money?
Yeah, it's, it's interesting, um, especially here, everybody's focused on FinTech and not blockchain as broadly, but I think now that we're seeing real uptake with stablecoins.
People want to know, can we make money?
The use cases we're seeing are there across B2B, emerging markets, remittances, but at scale there's still some really handsome revenue streams to be made around float and fees.
And at the end of the day, if you just improve the user experience for dollars, you will make money as an institution.
OK, Anthony, thank you so much for joining us bright and early here at Money 2020.
I appreciate your time and your insights.
Thank you.
