Banks Are Going Onchain on Weekends

Christian Catalini (0:03)

I don't believe in the pasting the FinTech frontier. I think if I was leading a global bank, I would just embrace it and rather disrupt myself than waiting to be disrupted.

Cuy Sheffield (0:14)

We still have not seen any meaningful demand for direct consumer to merchant stablecoin payments, and it's not that there aren't any merchants that accept. I mean, like you said, Shopify accepts, Stripe is accepting. There's just not material demand of consumers who would be of rather pay.

Simon Taylor (0:30)

If you look at what the fintech companies are doing, there's your roadmap. But then I think the big thing you got to do is give the agent a reason to choose you. You got to make your bank worth choosing. Welcome to Tokenized, the show focused on stablecoins and the institutional adoption of Tokenized real-world assets. My name is Simon Taylor, host of Tokenized for today, and of course, author at Fintech, BrainFood and Head of Market, NeverTempo, and I'm joined by the one and only Cuy Sheffield, Head of Crypto at Visa. How are you doing, Cuy?

Cuy Sheffield (0:58)

I'm fantastic. We've got a legend, a great friend, mentor, excited for the show today.

Simon Taylor (1:04)

Yeah, making a return to Tokenized, but a debut on the new show, it's Christian Catalini, who's founder at the MIT Cryptoeconomics Lab, and you were the co-founder of Lightspot. Christian, always good to have you back. How are you doing, sir?

Christian Catalini (1:17)

I'm doing great. I mean, two of my friends are on the show here, so I'm looking forward to this conversation.

Simon Taylor (1:22)

Let's do this. Before we jump in, I got to remind viewers and listeners about views and opinions of our contributors today of their own and might not reflect those of companies they represent. Please don't take anything we say as tax-legal or financial advice. And to remind you that this podcast is sponsored by our friends at Modern Treasury, who I had dinner with on Tuesday evening. Shout out to Dmitry and the guys.

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All right, thanks, sponsors. And big, big news this week to lead off with. OpenUSD is live on Tempo, Ethereum, Solana and Base. This is the open standard organization that announced OUSD in June and switched it on yesterday on those chains. And uniquely, businesses can mint and burn stablecoin, the stablecoin OUSD, at one-to-one, so at par, and at no cost through Coinbase, Stripe, Visa and MasterCard and of course Bridge, the Stripe company. Bridge issues the token and the reserves stay at BlackRock, Boonee and LeadBank. So, Christian, you've seen stablecoins come and go. You've seen attempts to do tokenized money come and go numerous times. What is your thoughts on all things stablecoins and how important do you think the economic model is here?

Christian Catalini (3:44)

So, look, as I wrote when OpenUSD was announced, I think it's a really important effort. To some extent, there's two potential scenarios for all this, right? Either one currency, one asset becomes kind of the interop layer for the digital economy or we're going to have massive fragmentation across stablecoins.

It's been amazing to see that the group has brought together not only four of the most prominent names in the space, but also like a longer tail of other participants. I do think that it would fill a big gap in just making interoperability really seamless between wallets, fintechs, even traditional financial institutions. The big question mark is going to be what does Zach do now that is essentially leading this effort and building the team in really ensuring what is a very difficult and delicate, not only governance and less concerned about the governance structure, I think the group has been tough on that, but with all of these efforts historically, it's like how do you get momentum? How do you convince even your own founding partners to actually go? There's always a little bit of a waiting game where everybody's waiting for somebody else to make the assets actually truly meaningful and useful.

It looks like partners have committed liquidity, which I think is a great first step. The next step is like, you know, there's some really interesting use cases that a more global and interoperable stablecoin could serve. How do you bring those to life? I mean, the proof is really in the usability and application pudding. I think that's going to be the test. Of course, the Stripe DNA brings a lot of practical focus on things that this could do for merchants. And there was a post right by Zach, I think a few weeks ago on what are the key things that we want to solve for.