How can a neobanks strategically integrate Bitcoin and stable coins to create a competitive advantage? Meet Richard Green. He leads go-to market for strategic partnerships and the growth across the Rootstock ecosystem. Rootstock Labs is the largest and longest running Bitcoin side chain. In this episode, we have a masterclass on stable coins. We cover cost considerations, user experience, challenges, security and fraud protection, partnership selection strategies, and Richard's three key takeaways for Neobank founders ready to integrate crypto infrastructure.

Most overlooked aspects is that you look in what, or you look at stable coins in isolation, or you look at Bitcoin in isolation versus what it brings as a, a true whole pro programmable financial layer. To finance, to neobank and things like that. The biggest is obviously global payments remittances. Why is that so successful? Well, it goes back to that point we were speaking about earlier. So those are the kind of two advantages. The, the lower costs really impacts more at the international level. So if you look at the US to Africa, that is a difficult payment corridor from, for a multitude of reasons. And what stable coins can do is they can keep that as the same price as a. You know, a very highly used and active corridor itself. Building a little bit of Bitcoin into the, the conversation was you can then do things as a business or as a user. Treasury management predict my cash flows into the future management working capital.

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So this week's episode, we are going to answer a key question that is very relevant for the industry, which is how can a neobanks strategically integrate Bitcoin and stable coins to create a competitive advantage so now everybody's talking about stable coins basically. And for Neobanks, there's three things that we struggled all the time. How do we differentiate, how do we maintain or reduce opex as we scale? And how do we hit profitability? And now it's like the new kit in the block this year is STABLECOINS. Even though it's not a new technology, it's. Rapidly being adopted into the FinTech space this year. So it's like something to, to look at at the moment. So I would love to start with, you have a very interesting background because basically you've covered from traditional finance to also kind of, uh, working in circle Bitcoin infrastructure. So you have the holistic view. So what do you think is the. Most competitive advantage studies overlooked by Neobanks when it comes to Bitcoin and well, not bitcoin when it comes to crypto and stable coins.

Yeah, I I, I, I think you're absolutely right when you talk about stable coins, being I the new kid on the block, but, but not so, I mean, it's, we've seen a huge amount movement, whether it be position or whether it be pick in, in market cap of, of stable coins, but I. The most overlooked and respect is that you look in what are, you look at stable coins in installation or you look at Bitcoin and isolation versus what it brings as a, a true whole pro programmable financial to finance, to neobank and things like that. It obviously reduces in terms of transactions, in terms of moving money across borders and things like that, blockchains, but what it also does alongside them. A whole programmable land where things can be done automatically, things can be done across borders of uc. Obviously with Stripe opening up 101 accounts, you know, you look at the biggest banks in the world and there maybe in 60 or 90 countries, and then. I'm not saying it's an easy flip of the switch, but in a relatively easy one through acquisition, they, they've turned bridge and so looking at it holistically is a lot different. Um, and then looking at it in the ways that it can open up, not just, um, the the cost, but also it's 24 7. Um, I saw recently that I think $13 billion were transacted over a weekend, right? So you look at traditional.

That

is not really possible. And on a normal weekday, it's something like 24 billion. So you can really get into that 24 7 mindset and you can kind of constant continuously do it. And then when you look a little layer deeper, you look at it not just from the cost savings perspective, but somebody maybe transmitting money. You look at it from a cost savings perspective of, um,

for

infrastructure that's needed for. Gone are the days where you have to spend 80% of a budget on building an internal infrastructure for payments, for moving money around. You can really buy, either buy it in or you can obviously make use of the things that are, such as the blockchain technology, the stable coins that are already issued, Bitcoin that has been around for, you know, number of. Trustworthy assets out there, and it's all known where we're talking about it a lot more is becoming a lot more of a plug and play. A plug and play. And then I think the final thing on it is just you are looking forward at future proofing. This is in the same, in the same way that you would look at saying, okay. When the internet was coming around, what are things gonna be happening with the internet? Okay, well, with um, ai, what are we doing to pan into the future? This is also saying, well, actually the technology that is there is moving, moving money at the speed of the internet. It's, you know, the H-D-T-P-S stay is the email that is to go, well, this technology is there. It's just about making sure that even if I'm not looking for the, let's say, the stereotypical uses of stable coins or Bitcoin or what's the actual technology on the line can utilize to build,

I love that as a. Opening statement because at some point you said it obviously saves us time. And I was like, it obviously saves us time in the, in the mind of someone who's embedded, you know, and looks at this and understands it. But there's many people within the industry that are still catching up on what are the benefits, right? And then it's like. That that caught my attention as you were saying that, but at the same time, you finished like in a very nice way that it's like we can move money at the speed of basically internet. It, it's just

great. It it is and, and it's, and it's a great point you raised in the sense of it's becoming, I'm sure we'll definitely touch on this later on as one of probably the, the downsides of the world of crypto and the world of stable coins that people live in world. And then when they try and move into a world of traditional finance, neobank, that's one of the problems with crypto, right? They build for crypto and then they say, well, why isn't this, why isn't this happening? So, no, I think that when I say. Reduces time. Again, I'm sure we'll do go into this, but it is, you look at the ways the money is moved at the moment, and there's some amazing ways that it is. You look at picks in Brazil, you look at essa, you look at Relu, they, they can move money instantaneously and so it, it's a, it's, it's about explaining and understanding, well, if it's outside of those maybe internal networks, where do the actual benefits come from?

So let's start then with the basics, right? Let's, let's go straight back to the basics. What, basically, what are stable coins and what's the difference between stable coins and bitcoin? But I think that's a big difference.

Absolutely. So I think, so stable coins are digital, digital dollars. I'm gonna call them digital dollars. And there's a reason I'm gonna call them digital dollars because 99% of the stable coins that are transacted are in dollar. There are other stable coins out there in different fiat currencies year round and things like that. But the vast majority is in in dollar. And those are. To stable. Stable, which is the so, so significant market cap, kind of 200 billion increasing over time. The difference between that and Bitcoin, whether I think a lot of people do is, is one is digital cash and one is Digi digital Gold. I think Bitcoin has often been reviewed to as digital gold because of those people who are holding, or ling, if you are, if you're in the crypto industry and they view it as a store of value, they view Bitcoin as, let's say, an inflation hedge in certain ways and something that will increase in value over time, whereas stable coins. It's about, well, what am I paying? What am I using that to pay for? What is the actual, if I'm gonna a shop am I transacting with? So whilst you still see people, and we work with people at Rootstock trying to set ways to pay with Bitcoin and find utility in Bitcoin, and, and again, that's, that's a big discussion point. You'll see that it is mainly this view of digital cash to use and spend and digital gold to hold and use as well.

I love that analogy. Digital cash, digital gold to hold to, yes. Yeah. And then, yeah, because then it's a, you mentioned utility, and I think that's part of the, the, the thing that needs clarity in people's minds, that it's like, what's the utility of this? So just to make it very practical. What would be two to three use cases that, let's say if I work in a, in a neobank, in FinTech, what are the use cases that are like actually real use cases that we can, we can use with stable coins?

Yeah, so for stable coins, the biggest, and probably the one that you hear about the most is obviously global payments, remittances and things like that. And, and why is that so successful? Well, it goes back to that point we were speaking about earlier of, of how Stripe can open 101 account across a hundred accounts, across 101 countries very easily, so that you are creating borderless finance, right? I. Payment domestically, instantaneous. It is instantaneous globally, and so there are no borders anymore within that space. And so as a neo, obviously if you are considering either domestic or branching out for both retail and business, that's what stable coins can do. So it. At a lower cost. Um, so those are the kind of two advantages. The, the lower cost really impact more at the international level when you, you can look at the other, um, more traditional remittance companies, the wises and, and, and those kinds of players. And they still offer super low, um, transfer fees in. I think the, the, the areas where a real use case comes in is where it's two corridors that are more difficult to reach. So if you look at the US to Africa, that is a difficult payment corridor from, for multitude of reasons. And what stable coins can do is they can keep that as the same price as a, you know, a very highly used and active corridor itself. So global payments and remittances for Absolutely, uh, for certain. Um, building a little bit of Bitcoin into the, the conversation as well. With this, the, the other use case is not, it's not just sending, it's also about holding, and that sits with both Bitcoin and stable coins. So if I'm holding stable coins, if I'm holding Bitcoin, especially in high inflation economies, why is that good for me? Well, I've access in a number of, in American countries. But if you have access to a stable coin, you are inflation hedged. If you have access to Bitcoin, you are as well. You are exposed to another potentially volatile currency, but you are hedged against that inflation. So you can then do things as a business or as a user. Which obviously, so if you are providing that store value, then as a neobank I can go, okay, well what am I doing from treasury management? What am I doing to be able to predict my cash flows into the future? What am I able to be doing in terms of my working capital? I can manage all of those different things, and so. From two use cases there. And then if you go a little bit further into what stable coins and Bitcoin is obviously useful is it's, it's the gateway to, to defi decentralize finance. It's the gateway to Web3 if you are thinking about, okay. I want my users to be able to access yield on their, uh, currency. So let's say you're a US dollar account, or then moving into USD, uh, USDC or USDT, then within the decentralized finance world, you can get access to yield that is offering four, five, 6% return. And so again, you're thinking about what can I be adding on? Three real use cases, obviously around remittance, kind of, um, holding and then actually defi space. And there, there are, there are countless. Um, and it's all really about if is you as a business, where do you see the gap in your country? Is it that there are a lot of gig workers in the country? Is it. What, what works within that? Okay, well, we can give them access to inflation protected currency, or we can give them access to, they're all sending money saying we're receiving money. And that's where it can be built into.

I like that because then we're bringing it back to the people message. Um, coming back to the remittances, the cross border one, because it, it, it's like, it's like spot on. Malaysia, Indonesia, there are countries that there's a lot of, uh, international movement as such. So the how most, uh, neobanks or FinTech, even banks work today. It's like, Hey, you have FinTech a and then there's a remittances aggregator, and then we just connect with them. Yeah. So in how good we, how do we bring it to life? If we were to say, Hey, now we want to. To do remittance is via stable coins. I have, I have my understanding, but I, I don't want to cloud the conversation.

Yeah, yeah, absolutely. So it, so there's two ways these, where do stable coins come from? Stablecoin come from stablecoin, issuers. And who are those Issuers? Circle is one and Tether as the other, as the two largest. You've obviously then got other issuers. Cbd, cs, which is the government based, and then you've got yield bearing ones, which are kind of coming in prominence. But what is the actual flow to do it? Well, you, you need to first get the stable coin. Um, and you can do that by either being a primary, let's say mint or redeemer of the coin, as in I go to circle, I set up an account with them and I want to be able to. I have that, but in many cases can just do it via setting up an API or via a desk that goes onto centralized exchanges. These, uh, stable coins are active with highly traded on centralized exchanges. So as your users are requesting stable coins or whoever is requesting stable coins, you obviously go into the secondary market. So once you have the stable coin, it's obviously relatively simple.

What

you do is it, you sit in your infrastructure to a wallet and that that person will hold. That is a very simple ecosystem because once it is, whilst it is in that ecosystem, it is on chain blockchain. It is within stable coins or bitcoin. If I send to you and you can receive it, great. It can just pass P two p Super simple like a traditional internal, uh, system. The, the, the complexity comes when you are looking to on and off ramp to stable coins and that. If we were to have had this conversation a year or so ago, it would've been a very different conversation because there were not many, I would say global of people being able to, providers being able to bring currency on, fear, currency on, and then also take. That was much better. If you look obviously, like again, the, the Stripe Bridge acquisition, that is an infrastructure with on and off Ramps. Moon Pay recently acquired a company called Iron and you are, you are seeing more of these coming to fruition, so. You can plug and play quite easily into these kinds of providers where they can bring your local fiat currency on and they can take it off. Um, however, there is also then your KYC requirements, um, that is due to local market and that is something that also can be a little bit more difficult because you're starting to interact with. So it is decentralized by nature, what K-Y-C-K-Y-B can you do in a permissionless world? But there are some great kind of providers out there, um, that fit in within that space, not just on the KYB side, but um, that like travel role regulation, um, number infrastructure providers. It is a, it is a really easy setup whilst you are in the world of stable coins and whilst you're in the on chain space, more difficult side. But I think that this is gonna be the inflection points of where you see stable coins. Just moving from 200, two 50 billion market cap to 500 billion is where all stays on chain. Because if I send money to yourself who's in Malaysia, you might say, well, actually I want take local currency. But hopefully there'll come a time when you don't need to take that out, because that is accepted at Merchants, that is accepted, you know, by, by any, uh, provider you might be doing or any business that you. And so we're kind of at a halfway house in the middle where you are, where we're between full adoption. But beyond that point of saying, well, actually we're just trying to bring in crypto native users into the space. Um, so it's, it's, um. It's a great place to be at at the moment because where you can also start to see as a, as a neo or as a business of any, there are options and there are people who are, who are guiding you through all of these things. Any sense?

Yes. Yes. And, and it's, uh, I love the, the. It's not even the concept, but the world where, like you say right now, stable coins are still for a few people, right? And therefore, that's why you need to convert them into your local current. Let's say you send me stablecoin right now, if I'm based in Malaysia and I want to use that money, I cannot in my day-to-day life, but it will be cool when, and I'm scanning around QR payments and now I just select to pay with Malaysia, bring it, or with. Something else. Yeah.

Yeah. And I don't think that's far away. Right. Visa are very active in this space, made a, I think a strategic investment into. Again, a serious infrastructure provider within the space and issuing costs. Stable coin cards, issuing stable coin cards, and so who are, uh, kind of a neobank within the space issuing cards. And so it isn't, it isn't too far, I think, where the traditional roots are being built and are being built well to be. Some, um, resistance or I would say friction actually at the user level of, let's say merchant payments. When I. There are then still high fees on the tapping of the card with stable coins. That's, it's kind of like you imagine on the stable coin, issuers are at the center. They've got that, they've got that sorted, the on and off ramps coming down and the tentacles, they've got that sorted. And then it's branching out again into other spaces of what do I do when I get to that level and get to that use. But that will, that will come. Um, and it's great that the, the kind of, the infrastructure is being built that way out with huge players like Visa in the space.

I want to expand on that because you, you read my mind when you mentioned cost. I was like, wait, this is a podcast. Right? But if we were at work and this was like a work conversation at this point, I could have been like, hi Richard. All these sounds really good, but let's get into it. You know, it's, uh, what's the cost before we go deeper in it? That's, that's what have come into my mind if this was work rather than podcast. Yeah.

So let's answer

that question.

Yeah, abso, absolutely. Yeah. And I think the, the, the, the neobank that we speak with, um, and I've spoken with in the past, the cost, if you look at those startups, I would say vast percentage of that business is compliance teams. And they are spending a large amount of on building out compliance teams, whether they are. Custodial or self custodial. These are two different models within the stable coin space and within the defi space. But a custodial model is basically the, the, the neobank obviously custody is the assets, the self custodial, is that the own myself that actually owns and controls that. Private keys and things like that a little bit as well. While you are building out those compliance teams, you have to consider what goes through. Those things require custodial regulated, right? For the, it's going to be checked. You are handling and holding the money on the self custodial side. Well, the cost actually probably comes more from, you've gotta build a, a UX that is. If I'm self custodial, I have got to, if I'm using a self custodial model, I have to keep my private keys. I have to do things like choose which blockchain and transacting as stable coins are. I have to do things like check the gas fees and all of that, and so building out that UX is actually quite difficult, especially for non, if you're trying to access. Crypto or stable coin native users. Um, and so you have to make that trade off of are we going on a custodial route or are we going on a self custodial route? Um, because then obviously that will then feed into your technology costs, um, what you are building out and, and also your security costs. I think people read and have read, um, a lot about the, the dangers of crypto, of wallet and exchanges being to money disappearing and things like that. That's absolutely, that's absolutely true. So you have to make sure that whatever ecosystem or infrastructure you are building has high security. And because there are bad actors out there, as there are in the world of traveling, right? Finance. But, um, it's so. Compliance is a big one, and the user experience is obviously, you know, spending on security. And then the, the, the final one is probably coming into your, your liquidity management, your treasury management, because whilst there is a lot of liquidity on Bitcoin, on stable, using a centralized exchange. You are still having to ensure that your on and off ramps are liquidated enough so that, so that people can move their money in and out. Right. Um, and what are the fees on that? And again, speaking to some of these on and off ramp providers. The conversations that I've had with them in the past are, well, we're, we're, we're all starting out. We're only really looking for companies or businesses at the moment that are doing high volume because we need to recoup our fees from probably the, the expenses that we've paid out, relatively new startups as well. So if you are having to use on and off ramps to manage this. Are you gonna eat those costs? Because whole point of stable coin is that it? Well, the whole point, the big point is that it's relatively cheap, but if you're now adding on an off ramp cost to your user, you might have to actually consume those costs yourself.

Yes. And then you touched, well, other than costs, that is like the work question that comes to mind. The second work question that comes to mind is you talked about security. Um, and yeah, there's a risk and it is real. So how about fraud? It's a very large topic, so I'll just say that. How

about fraud? It's, it's, it's, it's a big, it's a big topic, right? And I think that this is another, um, so this comes into a. The, the good thing about traditional money movement or traditional banking is that fraud. If you are fraud, you are protected as a consumer, right? That is one. Get frauded out of your money. You can call your bank, you can tell them it's been proven, and you get that money back. The, the fraud sits with the bank. So for you as a user, that's fantastic. Now, for you, obviously as a business that's not so great because you are having to pay out all of these fraudulent claims. Um, and so I think on this, there's two parts, but I think the first part on aspect. Versus self ensure that. Isn't, you can consume protection that is, that is going, gonna return your capital and so is what is not being worked on, but that is what's being looked at. Right? If you look at the United States, they've just the genius act this week, which is a big stable coin, uh, piece of legislation, which is mainly around stablecoin issuers and, uh, what, what is a stablecoin viewed as? As viewed as a payment? Uh, security or something like that, but that is probably months slash years to. That builds into, I think, your user experience journey. How do you ensure that you are not building a product that opens the door to more fraudulent activity? And then going, going beyond that, what are you actually, then what are you actually then doing? And you see this a lot on the other, on a lot of these sites. You have to educate. In a lot of cases, you have to educate, you have to teach people, you have to show them what, if you're following a self custodial model where I own my money myself, how are you protecting it as an individual and what are you going to do to, to be able to help me understand that? So everyone is learning, but in saying the actual, the. Stable is that it's on blockchain that's traceable. So again, if you see these, there was obviously an exchange recently they got, they got hacked for quite a large amount. With it being on on chain, you can trace those funds and you can see where those funds are going. Now, whilst that obviously isn't. Potentially gonna benefit, benefit me as a user because I can just see my money disappearing or going through different spaces. What it does mean is that the industry can build really solid fraud module, more fraud models around it, and can really easily train their fraud and bad actor detection on what these things look like. If you look at the open banking and within Europe and within the UK and pretty much our own world, right? One of the great things that came out. They could easily detect fraudulent activity. They could, they could detect, they could train AI models. Not only on that, but let's say on credit scores and things. This is all possible within the world of blockchain because you have every piece of information stored on a ledger. So it's, it's super easy to be able to see. It's just about making sure that it's there. So, you know, would I say that fraud is as prevalent, you know, more prevalent within the world of, um. Digital assets and stable coins versus traditional finance. I don't know the, I don't know the stats. Um, so I'm not gonna say yes or no, but what I would say is that I think that when is, it's probably getting a lot more exposure because of it being a new world, it being a bit of an unknown world versus the old side of Yes, we, we know that people get defrauded on the traditional finance side as well.

Because that's a big consideration. Right. Especially as fintechs or neobank start saying, yeah, we, we want to get into the stable coin, uh, train. We need to think it properly, and Yeah. And it needs to go into the product design process. It's not just an Oh, yeah. We build the infra, we build the user experience, and eventually we pass it to the FRA team to do some FRA growth.

Yeah.

It is, uh, it needs to be by decide since the beginning.

It, it, it absolutely has to be. And I think that, again, if you look at the people who are doing it right and doing it really well, they're not just building K-Y-C-K-Y-B checks at the minimum level in an unregulated world, they're building it to the expectation. What is coming in the future in a highly regulated world? You know, companies like Sling Money, um, who provide services like kind of P two P, they have got a fantastic check and they will be able to then make sure that again. If something comes along and they're like, okay, well we'll look, we're gonna look historically how we've been doing this. Well yeah, we've taken a view that you are gonna come and do this. And so we, and it was the same thing at Circle within what we did at Circle. It was, we build not to the regulation that's, we build to the regulation that we're expecting at the highest level in the future. And then I user base. You don't obviously want it to become prohibitive and you can still get a set up, an account in three minutes as you do with Wise a Revolut or someone like that, but you still get all the information that you, that you need and to be able to help on that, on that side of things.

My other question that was running through my mind that is like you also mentioned, this money is not protected. You know, like at some point we were like, Hey, money not protected by FCA case of the uk. So then when you said that, I was like, of course. But then from a customer perspective, like we bank with a bank because we know the money is protected and that gives us trust. So in this case we know the money is not protected and then it's kind of risky, but. You know, like we start building

Yeah. This

cloud in people's minds. Hence what you mentioned was education is super important, and then as we educate and we build for the regulation of the highest standards of the future. Then we also need to communicate that to customers that by design this is built with security at the center and regulation in mind and audit.

Completely, completely. And, and I think that it's, it's about choosing that. The great thing again now is that we are in a world where the partners that you can choose from are, are incredibly high level. So it's about you choosing the part sets along along that journey. If you are to look at. Circle for example, you know, when I spent, when I was at Circle, there was a deep pegging event. And a deep pegging event is basically on the secondary market where you can get USDC. So from a centralized exchange, the you can't get, you don't get $1 for $1, the $1 that is on the secondary market. On exchange, you can actually, for 90 cents. Uh, a view that it is not worth a dollar anymore. So there was obviously, you know, a large amount of withdrawals from circle in terms of people panicking in terms of what was, what was going on. The amazing thing about what if, again, choosing the right partners, issuers, like circle well, where were, if you gave me a dollar, what did Circle do with that? Well, it basically kept it in cash or in something called HQ la, right? High quality, uh, high quality liquid assets, T bills, things like that. So that if you wanted your money back. It could easily give your money back. And that's again, if you look at traditional bank runs where there is a concern, you go, okay, actually I'm gonna go to the a tm, I think in the UK example of the Northern Rock many, many years ago. If I go to the uh, ATM and try and draw my cash, the at m says there's share because there isn't cash there. The money that you gave to the bank has been L out all. However, with these stable coin issuers and choosing that right parer, you can see that actually the, the time it takes to return your dollar from where it was stored is within, within a day. So that's something again, that within that mindset of speaking to customers, it's like, okay, if I give you a dollar, where does that dollar go? Well, it's actually custard with some of the most trustworthy banks in the world. In fact, probably the most trustworthy banks in the world. And so again, it's about piecing that story together because again, especially stable coins. Well, where? Where is that? It's here in Bitcoin. That's still the same aspect as well. It's about where is your partner Custodying Bitcoin, because there are many custody providers of Bitcoin out there. So if you are wanting to consider if, if you are not gonna do that as a neobank, well, I want to choose one of a, the highest quality digital custodians out there so that again, I can return that money on, on, on, um, on when it's required as well.

Yeah. Can you expand? I think this is a critical point. Um. How do we select the right partner or maybe the right question. It's like, what's the criteria that says this is a, this is a good partner.

That's a good, that's a really good question.

Um,

I think that what you are the. The starting point of when, again, people within the roots of ecosystem and having these conversations. The starting point that I speak with 'em is they have to align on your values of what you want to build going forward, right? And so if your values are. Wanting to be highly regulated, or at least attempt to be highly regulated in what could come in the future that you are building for longevity. And again, stable coins is becoming part of the digital native and full product offering. Um, and so combining those two things, I think you've also really gotta consider the. At this stage, where are the, and there's probably two sides. Where are the majority of people going to? Um, because we are in a, not a scheduling industry at any stretch of the imagination, but we're, um, we are at that stage where I think there are players coming to fruition who are more considerably large. Numbers B as an example, bridge and. Those are the kinds of, those are the kinds of partners that I think I can align to. 'cause they are the, the larger of the group and they're all highly innovative. That's the, there's no one resting on this industry who are at the top. That's the amazing thing because there's such a big. Everyone's incredibly to be able to make sure that they're providing the best service. Um, but then I think on the other side, you, you look and there are some incredible, well not new entrance in the space, but incredible providers who are, um, founders of businesses that are, um, who have on a. And they've built something really smart and what that can be doing. Because I think, and so if you are at an earlier stage of your journey

and

being a, a neobank, then you are obviously gonna scale up with them. We, again, root stock or kind of within actually a different area of what we're doing. We were looking at different partners that we could be using, and one of the things that really appealed to us is that one of these partners obviously kind of covered all of the regulatory concerns that we had, compliance concerns and things like that, but they were at a similar stage of really wanting to grow of a certain area. And so they weren't so big, but we not became a little fish to them because I don't think they, but really, really wanted to help us and. Coming myself, myself, coming from a kind of traditional finance slash FinTech background into stablecoin digital assets and then into crypto. The thing that is, the thing that I've noticed more than anything is there is a huge community of everyone trying to help everyone. So you can plug into that and you can say, look, we're all at this very much like a startup kind of. But across the entire industry, right? So if you are wanting to look for a corridor. Malaysia and Kenya for on, on our fronts. You can go to one of these people and say, look, we, we are wanting to do this. And they'll be like, cool, that sounds interesting. Is there a market demand for it? Okay, we'll do it. We'll look at building it and those things. So, no, I, I think the, the first thing is that, like I say, they, they have to meet your cultural and your, um, outlook perspective on what you want to do with stable coins. Um, and yeah, I. Stable businesses who do just stable coin work will, if, if you want to go deep into stable coins, that's, that's the place. 'cause that's where they're dedicating all of their time. They're obsessive with the technology. Uh, and they wanna drill down into it.

Yes, yes. That makes a ton of sense. Um, I think we've been speaking for almost 40 minutes. Um. Tell us about Rootstock, like what exactly did you guys do?

Yeah, absolutely. So for Rootstock, we are a Bitcoin size chain, and we are EVM compensable. So what that means is that. If you are a user or a builder on Bitcoin or or Bitcoin, you can then use that Bitcoin in EVM, which is smoke or small contracts. And so, which are basically if then statements, right? This is another thing that's great about Bitcoin and great about stable coins is that, um. If this happens, then this should happen. And so when you are a blockchain that, um, allows for that to be built but uses Bitcoin as the underlying asset, then you open up a world, a huge world of things that people can do. So for take, for example, I am a, I'm a a business builder. I'm a neobank and I want to appeal to Bitcoin holders, right? There are many Bitcoin holders all around the world, but let's say I'm in Latin America. And those holders are individuals who are wanting to, um, hold Bitcoin, but then they're also wanting to have a business and they're wanting to make payments of semi payment. Well, what can be done on our blockchain with our. Small contract technology is to be able to build that technology so that people can use that Bitcoin, keep their exposure to Bitcoin, but then also have things happen with that Bitcoin that relates to an if, uh, if then kind of statement.

Like tie this all together in a practical, innovative way. And I'm going to speak just like, uh, thinking out loud. This may not even make sense. Uh, so we're a neobank, not, we don't have exposure to, let's say Bitcoin stable coins, just like a traditional neobank. Then you say, Hey, we need to go into the space. One option is, hey, we will create a wallet. For people to hold, whether that it's Bitcoin stable coins, then they can have it. Then my roadmap would be like, Hey, you need to be able to receive money. You need to be able to hold money. Ideally, you'll be able to have some, to get some interest from that money that you're saving with us. Then my next use case gonna be you're, you need to be able to pay with this money that you have, so maybe. In the short term, there will be like a, a card that you pay with card that you pay with Bitcoin in the future. There will be a QR payment in Asia. It's like QR payment enabled, uh, with, uh, stable coins or Bitcoin in the background. So that's like basically holding money, saving money, paying money. But then the, for me to pay, of course there needs to be the, the merchant that's. Accepting these payments. Most neo banks don't do acquiring. Yeah. But there will be somebody else doing the acquiring bit. But what you're saying is that's, let's say the quote unquote basics, but then we can innovate even further. If we think of companies like Woodstock that then we put together the use case of programmable money.

Yeah, absolutely. Yeah, absolutely. And, and, and Rootstock being that, that blockchain, you know, rootstock is a, it's a payment network in, in essence right within this conversation. It is a way to send from A to B like IT salon theory. And what blockchains do and what we do at Rootstock is we think, well, how do we make that payment network or that network as usable as possible? What can we do to make it as as as interesting? And like I said, what we, we obviously did is like ethere these Ethereum start or smart contracts so that people can program that money to actually be able to act and work without interference or without manual input. And also. The other aspect to it is that you see if you, you know, look in the world of crypto. Ethereum is a, is a huge, um, blockchain and people who use Ethereum are often those who are wanting to build programs, build, let's say neobanks or build anything but on chain. Well, what we do is we, we take that ability to build on Ethereum, which is kind of seen as the biggest developer blockchain. And we say, that's great, but what about if you want to build that, but you use Bitcoin as the underlying asset. So you are then able to use whatever you are building over there that you use Bitcoin, and we help you obviously transfer that back and forth, um, in whichever way that you are doing it. And we do it as quickly as possible, which is, you know, relatively quick in terms of, especially in, you know, very quick in terms of traditional home rails and also cheaply. But where we go specifically for is. Bitcoin, and this is going reasonably, you know, a little bit deeper is something proof of work. So how do I know that a Bitcoin transaction has been moved on the blockchain? Well, it's by these things called miners, and you've probably seen it in the news and things like of people mining Bitcoin. Well, that secures the chain as incredibly secure. Well, what we do is we take that. It's those miners, and we're secured about 80% of those miners. So each transaction on root stock is secured by the same 80 to 90% of the same transactions that occur on the main Bitcoin chain. So again, when we are having these conversations with, with neo banks or whoever, you always get to that aspect of, well, what's the security like? Can there be a breach in the chain? Can there be a breakdown somewhere? And our response to that is, well, Bitcoin is. The safest. The safest chain out there. And we're the second safest because we're balanced by nearly all of the parts of the Bitcoin chain.

Okay. And then kind of like going full circle at some point you said when it is important that when you choose the partners, it needs to be aligned with your values. You guys are very purpose driven as well. That's kind of, that's what caught my attention, was like, oh, cool. Of course, we're in purpose driven FinTech, right? So we cannot not talk about purpose.

Yeah. So tell us

a little bit more of what makes you guys purpose driven.

I mean, it's, it's in the founding DNA, our founders are from Latin America, ICNA specifically. And you know, one of the reasons that they find founded Rootstock was because they wanted to provide everyday people and everyday users. The ability to hedge against the inflation of Payson or another currency that they're exposed to. So they, they believe, and we believe that Bitcoin is that way to be able to do it. And so they, rootstock is the blockchain to be able to allow for those different things to happen. And so, you know, for, for myself at Rootstock, what do I do? I. Integrated partners who spend in terms of trying to figure out what their use case is and trying to figure out how that best fits on the rootstock chain. So our view is whatever we are building or whatever is being built on our chain. Our end goal is always to improve financial inclusion and the lives of everyday users, and that goes back into that stable coin conversation. It's kind of one of the reasons why we joined Circle because their biggest, biggest message, right, is improve financial inclusion back the unbank, disenfranchised, the. We, we will always go out and look at thinking ways that we can ensure, and this is a long journey that we want to be able to go on, but eventually we have built an ecosystem where partners, neobanks or whoever are built on top of root stock. Where their end goal is to serve the everyday users. And, and that, that, that was a big part of Rootstock for a number of years. We've gone a little bit more global than what we do and who we target, but the underlying theme is, is always there of getting back to that side of if I hold Bitcoin or I can hold stable coins, um, into. I'm using it because in some way it helps increase or improve my financial stability, my financial inclusion. I am, I can, I am a holder of Bitcoin. I. Hunched on inflation. But what I can also do is I can use that Bitcoin as collateral to get a loan for business or I can get a, from a partner that's built on rootstock. 'cause what that partner is is gonna be doing is they take that Bitcoin as collateral and they might give you a stable coin kind in in return to be able to do that. And so again, it's about looking at all of these different cases and thinking about what is the best option, and we bring the entire ecosystem together. So if I'm speaking to that partner who is building a, a lending and borrowing business or. Let's say a wage business where they're providing credit on upfront wages. I'll say, well, hold on a minute. I have a great conversation with this partner over here who's looking to do something in terms of actually being able to, um, ensure that the collateral you are providing is, is safe, is secure. So if you marry the two together, then, then, then it's great. So, but it's, it's at the heart of everything that we do and that's, that's a, it's a great mission to be able to try and work towards.

It's been a really good episode. 'cause these are questions that come up all the time for people who are not, um, you know, like working daily in the industry, but the ones that we are thinking, Hey, we want to get into, it's like it clarified many points in a, in a easy to understand way. I always say it like the plain English way,

Mott. Yeah. Good. Yeah, exactly. And that's, and that's really useful for me because to be honest, I'm someone who doesn't do well with technical jargon either. And so it always has to be.

Yeah, it's the plain English one. Okay. So just like to finalize, like, given that we've covered so much, what do you think are the three key takeaways that we have from this conversation for someone in a neobank?

Yeah. I think you have to, a, a big one is you have to really strongly consider, are you in, are you gonna. Build stable coins into your business as a feature, or are you gonna build it in as a full infrastructure? Are you, are you wanting to add it as an add-on, or is it going to be actually something that improves, improves efficiency all around, there's no right or wrong answer, but obviously it's about then you're gonna set up to try and achieve that. Achieve, achieve that goal. My answer to that is that stable coins help throughout the stack and the end user. So you're not, you don't have become stable Bitcoin. But it's very, you know, it's very worthwhile considering. Um, I think that it's about solving the real pain points, especially for the, the underserved in your region. Right. Or within your area. Is it that stable coins can provide better remittances? Is it that stable coins. Or, and Bitcoin can provide collateral services for loans. Again, what is it that, the, what is the pain point? That it is that you are, you are, you're solving. Um, and I think that the, it's about the build. So build securely, build forward looking in terms of compliance and build ux. Suitable for your user base. If you are going after stable coin and crypto native users, fine. They get, you know, seed phrases, keys and gas fees and things like that. If not, I'm probably not a user who's going to want to know what chain I'm transferring money on, nor do I want to have to put in a. 30 digit wallet code to know that I'm sending my money from here to here. It should be from Richard to Monica and, and that's it. So I think it's around, I would say, you know, around those points are probably the, the, the biggest for me.

Perfect. Richard, it's been a pleasure having you in the show. Thank you so much.

Yeah, thank you so much, Monica. It's been nice. It's been great.

Thank you. Thank

you.