Sam Kazemian & Raagulan Pathy: Why Neo Banks Are Quietly Selling Themselves (Full Interview)

**Robbie** (0:00)
Welcome back to Stable Up, our premier weekly stable coin show powered by our friends at Frax. Sam's here with us today, the CEO of Frax, and we've got Raagulan Pathy of KAST, the CEO of KAST.
Amazing show today, Neo Bank Supercycle, Tokenization Supercycle. People are spending stable coins on credit cards. I'll tell you that much. Gentlemen, great to have you. Sam, good to have you back. And Raag, welcome to the show for the first time.

**Sam Kazemian** (0:23)
Good to be here.

**Raagulan Pathy** (0:23)
Yeah, it's great to be here, guys.

**Sam Kazemian** (0:25)
Happy Friday.

**Andy** (0:26)
Absolutely, happy Friday.
How, I mean, things have gotten re-rated here in the last month. Are you guys seeing that reflected in activity and business as well? Or are we just seeing it on the price charts on Twitter?

**Raagulan Pathy** (0:38)
I mean, yes, we've seen definitely a little bit of an uptick, but during the last year, whilst we've had a bear market, we've grown 3, 4x anyway. So I think there is a lot of users that we have who are independent of crypto prices now. I think people are just thinking about crypto cards, but actually, they're like stable coin cards. People are just trying to move money and do everyday banking stuff, and the demand for that is exploding.

**Sam Kazemian** (1:04)
Yeah, I think we've seen the same excitement, honestly, every month increase since Genius. We work with a lot of both companies, but also Web3 teams, but even Web2. And the price excitement is obviously makes everything even more interesting, but on the back end, on business deals and stuff like Raagulan said, we've seen the same excitement just month over month growing regardless of the exact price.
Yeah.

**Andy** (1:35)
Look, I think a good place to start here because it's relevant. And I think stable coins naturally flow into Neo Banks and these stable coin cards kind of as you alluded to, Raag.
But where I think it's important to start is look, stable coins are becoming a national priority here in the US. Like I read this Trini article the other day. You know, they're talking about buybacks. They're talking about this Treasury Fed Accord 2.0. The point is that, you know, they're trying to unleash liquidity and deregulate banks. And in order to finance, you know, Scott Besson's bills, they need people to be buying these bills. And it seems like stable coin companies and issuers are potentially going to step in and be the buyers of these short term bills. And then obviously you can extrapolate this in a few different ways.
The meme on this show has been, look, it's a national economic priority to pump crypto because when crypto goes up, we issue more stables and then those stable coin issuers buy more bills. That's kind of just a fun little extrapolation that we've been playing around with here. And so Sam, maybe we could start, I just want your general reaction to how deep you think this goes. Have you personally gone full macro? And then Raag, we'll kind of get into, you know, what the stable coin build out means for the Neo Bank and the stable coin card part of the ecosystem.

**Sam Kazemian** (2:52)
Yeah, for sure.
I think honestly, the main thing is, before we've always said, oh, as the crypto price go up, more stable coins are minted. That's one part of the flywheel. But honestly, all of the Neo Banking, I've even heard the term Neo Brokerages now because of Robinhood's, you know, big rise, right? Where people can integrate just direct stock buys, sales and everything into the stable coin supply going up, right? Like one of the things actually, I think it was Rob Haddock from Dragonfly and our friends there, he actually said it really well. He said banking is being unbundled, right? Every part. So we usually talk about the stable coin stuff, the settlement and everything. Before Genius, right? Banks essentially had to participate in some capacity in the settlement process, whether it was a fintech like Venmo or PayPal. When you move money into your Venmo account, you're actually just wiring your deposit into the Venmo Inc bank accounts deposits, right? With stable coins, you don't actually have to do that, right? You can hold a stable coin. Like you guys said, it's a treasury. It increases the demand for short-term treasuries and money market fund securities. But as more and more banking features and brokerages and other financial features get unbundled and then essentially re-bundled in different places, like in KAST, in Fraxnet, in EtherFi, right? In all of these new platforms, you essentially have new demand for places that can hold stable coins, right? And other places that we're seeing is the companies that we're working with that will announce in the coming quarter is that they want to just hold a treasury of regulated stable coins for running their business for both pay-ins and pay-outs, right? So that's actually really powerful, too. It doesn't just have to be when crypto goes up. So it's really exciting and interesting to see what the features that are being unbundled are and who are the teams that are actually re-bundling them in the Web3 capacity, right?