Stablecoins Becoming the Backbone of Global Payments: Insights from Kevin Lehtiniitty

The biggest crypto companies are applying for National Trust Bank charters.

These include Circle, Coinbase, Zero Hash, and more.

And meanwhile, the stablecoin industry crossed $321 billion in April.

And all eyes remain on Capitol Hill to see if Congress can advance the Clarity Act, which could serve as a comprehensive rulebook for crypto markets.

Now joining me to discuss this and more is Kevin Lehtiniitty, CEO of Borderless.xyz.

Kevin, thank you so much for joining us this morning.

Thanks for having me on, Johnny.

I appreciate it.

So Kevin, let's start with crypto companies filing with the OCC for National Trust Bank charters, break this down for us.

I think what we've been seeing for the past few years, and this is a perfect example of taking it to the next level, is crypto companies starting to move into more mainstream finance.

And for a long time, I think the traditional financial infrastructure and the blockchain financial infrastructure have been living in these two separate parallel tracks, crypto versus strat.

And now with these OCC charters that are starting to come out and are starting to be granted provisionally, we're seeing a merging of the two, where crypto companies are now going to be regulated like traditional finance infrastructure companies and are able to operate in very similar ways.

So stablecoin has been a top trend in the past few years.

Explain their use in regards to the case in cross-border payments.

So cross border payments is where we're seeing the most traction around the world right now.

I think cross-border payments and B2B payments with stablecoins in the past few years has grown from $100 million a year in volume to $6 billion plus a year in volume and now continuing to grow.

And what you have, which is really interesting, is stablecoins on a blockchain are inherently a very global asset, but fiat currencies, bank accounts, regulatory licenses are still incredibly geographically fragmented.

And where you may have local payment networks, think FedWire in the US, think PI in Brazil, think Spain in Mexico, SEPA in the EU, these payment networks don't talk to each other except for a coordination layer that's called SWIFT.

So stablecoins are bringing in kind of a new way to create real-time bridges between all these local domestic payment methods.

So tell us about the payment network, the global stablecoin payment network.

When we launched Borderless in January of 25, we created a stablecoin payment network that effectively said all these companies, including the ones that are all getting their OCC charters, are all locally licensed, locally regulated in a market.

There is no such thing as a global license.

So as we have more and more of these companies that are getting licensed around the world, what is the thread that connects them all together?

How do you actually transact and move value across? and that's where we created a network of these stablecoin companies which has since evolved into a whole category of products with Circle, Fireblocks, and others coming into the category launching their products as well.

So let's hone in on the global regulatory framework.

What does that look like for the stablecoin industry across the world?

I think we're going to continue to have highly fragmented regulations.

So you have the MCA framework in the EU, you have Genius in the US.

There's a lot of movement with clarity obviously happening now.

Brazil just had a big regulatory change where stablecoins now fall under the crypto program versus the EFX program.

And that's part of why we actually need a network, because you're not going to have some sort of a global legislation that's uniform across every country on Earth.

Every country is going to legislate differently.

They're going to have different licenses, and then you need a layer that sits above the regulated entities to actually connect them all together to handle the communication, the messaging, the coordination, the data, all those elements.

So we've heard a lot of back and forth about the Clarity Act.

How does this legislation impact the industry and what does it do for the industry?

I honestly think it doesn't do a ton from a payments perspective and maybe that's like the hot take that a lot of people will want to disagree with me on, but when we think about stablecoins, there's really two kind of ways that you can think about them.

You can think about them first as a payment instrument, which is really how Genius Act thinks about them and defines them as payment stablecoin, which is all about how do you use currency on the blockchain to move value around the world 24/7.

You can also think about stablecoins as a savings instrument, right?

So how do I hold value in my bank account, quote unquote, using stablecoins?

And in the US, which is where kind of clarity is, is effective.

We are incredibly fortunate that we live in a US dollar native world.

You and I can walk up the street in New York to any bank, open a checking account, and it's USD denominated.

If you or I were consumers in Latin America, in Africa, and Southeast Asia, we'd have a very different problem trying to get access to dollarized banking.

So I think from a savings standpoint, being able to unlock stablecoins as a savings mechanism in the US is really not where the market is.

The market is in being able to unlock USD savings in emerging markets in the global South.

That's where we see a ton of adoption.

From a US centric standpoint, it's all about payments, and we don't need clarity from a payment standpoint.

We already have genius.

We already have the issuance coming, and we're already seeing the growth.

Kevin Laitity, CEO of Borderless.XYZ, thank you so much for joining us today.

Thank you.

Thanks for having me on.