WEBVTT - How Stable Coins Will Create Prosperity 0:00:04.600 --> 0:00:07.680 So the big question is this, how do investors like 0:00:07.880 --> 0:00:11.800 us get access to the ideas, information, and most importantly, 0:00:12.039 --> 0:00:14.880 the right people that give us the tools and information 0:00:14.960 --> 0:00:19.000 we need to make informed and educated decisions to have success. 0:00:19.600 --> 0:00:22.319 That is the question, and this podcast will give us 0:00:22.400 --> 0:00:25.520 the answers. This is Mark Moss, your host. Let's get 0:00:25.520 --> 0:00:28.840 this started. Hello, and welcome to another episode of the 0:00:28.880 --> 0:00:32.599 Market Disruptors podcast. Today I am joined by Matt Gurgler 0:00:32.680 --> 0:00:36.920 and he is general counsel for Reserve stable Coin. He 0:00:37.120 --> 0:00:39.839 is a an attorney. He's working with a stable coin, 0:00:39.880 --> 0:00:42.040 but he actually comes from the payment space, working with 0:00:42.120 --> 0:00:45.440 Venmo and also working in a blockchain research company as well. 0:00:45.600 --> 0:00:48.760 He gets the technology side, he gets the illegal side. Man, 0:00:48.840 --> 0:00:50.760 he just gets it. It It was a really good conversation. 0:00:51.040 --> 0:00:54.960 We talk about the remittance industry. We talk about stable coins, 0:00:55.040 --> 0:00:57.920 the pegs, how they work, maybe if they don't work. 0:00:57.960 --> 0:01:00.400 We talk about Facebook's coin which used to be a 0:01:00.400 --> 0:01:04.039 stable coin. We get into regulations, talking about what may 0:01:04.200 --> 0:01:07.679 or may not hold back the industry, and so much more. 0:01:07.680 --> 0:01:09.800 It's a really good conversation I really enjoyed. We're definitely 0:01:09.800 --> 0:01:11.480 gonna have Matt back, so let's go ahead and just 0:01:11.560 --> 0:01:14.520 jump right into this. All right, guys, welcome to another 0:01:14.560 --> 0:01:18.280 episode of the Market Disruptors podcast. Today I am with 0:01:18.560 --> 0:01:23.120 General Counsel of Reserve stable Coin Matt Girdler, and Uh, 0:01:23.280 --> 0:01:26.040 we've had some conversations before in the past. He's super knowledgeable. 0:01:26.240 --> 0:01:28.720 I'm excited to dig intoay because there's some new developments 0:01:28.760 --> 0:01:30.440 in the stable coin space I want to jump into. 0:01:30.480 --> 0:01:35.440 So anyway, welcome Matt. Great to be here. Mark All Hi, good, 0:01:35.920 --> 0:01:37.560 I'm happy to have you. Happy to jump into the 0:01:37.600 --> 0:01:40.399 conversations today. So UM, I gave you a quick intro, 0:01:40.440 --> 0:01:42.480 but for those um that are listening, why don't you 0:01:42.480 --> 0:01:44.640 just kind of tell us who you are and how 0:01:44.680 --> 0:01:46.479 you got to the black blockchain space and what you're 0:01:46.520 --> 0:01:50.680 doing right now. Sure. Um I got involved in the 0:01:50.720 --> 0:01:54.200 blockchain CRYP the currency space back inteen, around the time 0:01:54.240 --> 0:01:57.320 that the bit license was being proposed. I had been 0:01:57.320 --> 0:02:00.000 working during my one of my summers during law school 0:02:00.000 --> 0:02:03.240 at Venmo helping them apply for money transmitter licenses in 0:02:03.240 --> 0:02:05.800 New York. Basically took their money transmitter statute, made it 0:02:05.920 --> 0:02:08.760 more onerous, and applied it to a technology rather than 0:02:08.800 --> 0:02:12.239 how technology is used. And so UM I got involved 0:02:12.240 --> 0:02:15.120 with my background at Venmo and trying to fight against 0:02:15.160 --> 0:02:17.760 the bit license at the time, and I thought, you 0:02:17.760 --> 0:02:19.560 know what, there are a lot of problems in our 0:02:19.600 --> 0:02:24.760 financial system, predominantly dealing with remittances, cross border payments, UM 0:02:24.760 --> 0:02:27.880 clearing and sort of the time, and I realized that 0:02:27.919 --> 0:02:31.919 cryptocurrencies generally are blockchain generally would be intensive solution to this, 0:02:32.400 --> 0:02:34.840 and so that sort of got me down the rabbit hole. UM. 0:02:34.840 --> 0:02:37.160 I realized that a lot of attorneys, because there wasn't 0:02:37.200 --> 0:02:39.760 much legal guidance at the time, so they would try 0:02:39.800 --> 0:02:42.320 to rely on their experience, but they didn't truly understand 0:02:42.360 --> 0:02:44.320 the technology. So that's sort of the bridge that I 0:02:44.360 --> 0:02:47.600 tried to UM. That's why I tried to bridge was 0:02:47.960 --> 0:02:50.320 studying the technology at a level where I could sort 0:02:50.320 --> 0:02:52.560 of bridge between the lawyers that had been practicing for 0:02:52.639 --> 0:02:56.000 twenty years and the engineers who had never realized that 0:02:56.040 --> 0:02:59.320 this law was applicable to them. UM. So the speed 0:02:59.400 --> 0:03:02.959 up my background. I worked in big law law from 0:03:02.960 --> 0:03:05.240 old Mill Bank UM. Then I went off to co 0:03:05.400 --> 0:03:10.560 found an institutional research firm UM for cryptocurrencies, basically writing 0:03:10.960 --> 0:03:14.600 detailed twenty eight page research reports on individual cryptocurrencies for 0:03:14.600 --> 0:03:19.160 institutional investors. Focused predominantly on the legal and regulatory risks 0:03:19.400 --> 0:03:22.280 that might be real and investment. Some of the projects 0:03:22.320 --> 0:03:27.119 we covered were can um paisas so UM. I've looked 0:03:27.160 --> 0:03:30.280 at some of the more unique regulatory athletics there. Unless 0:03:30.480 --> 0:03:33.800 UM did laws of research last year to join a 0:03:33.840 --> 0:03:37.080 reserve as their full time general council UM. What really 0:03:37.120 --> 0:03:40.680 interests me about Reserve is there's two tokens in their protocol, 0:03:40.920 --> 0:03:44.520 a stable coin and a secondary token. So after reviewing 0:03:44.520 --> 0:03:47.160 all the different ways that crypto currencies have been launched 0:03:47.160 --> 0:03:49.680 and the legal and regulatory risk, I was then able 0:03:49.760 --> 0:03:53.520 to apply my background and learnings to the launch it 0:03:53.640 --> 0:03:57.920 to new crypto currencies. Yeah. Cool, that is a that 0:03:58.040 --> 0:04:01.280 is a really um, really good background that you have. 0:04:01.400 --> 0:04:03.760 It's pretty cool. You know. One thing that I love 0:04:03.760 --> 0:04:05.960 about the space bitcoin and and the space is that 0:04:06.000 --> 0:04:10.080 it's multidisciplinary, right, so like you have to really understand 0:04:10.120 --> 0:04:13.600 a bunch of different subjects at depth to really grasp 0:04:13.720 --> 0:04:16.919 how deep this goes. And so you you know, obviously 0:04:17.080 --> 0:04:19.680 being an attorney gives you one side of it. Uh, 0:04:19.720 --> 0:04:22.480 spending time at digital assets research and really digging in 0:04:22.560 --> 0:04:26.000 gives you that technology side. And then having the even 0:04:26.040 --> 0:04:29.240 payment space like at Venmo. Uh So, man, that's that's 0:04:29.240 --> 0:04:32.040 an awesome background that you have that I'm sure helps 0:04:32.080 --> 0:04:35.159 you a lot with what you're doing now. You're now 0:04:35.200 --> 0:04:39.280 with this new um stable coin reserve. Uh. And and 0:04:39.360 --> 0:04:41.800 let's just talk about stable coins for a minute. So, uh, 0:04:41.800 --> 0:04:44.880 stable coins are something that's become very popular like kind 0:04:44.880 --> 0:04:47.560 of like over the last year. A couple of things. One, 0:04:47.920 --> 0:04:50.799 I mean, really, there's nothing stable, right, everything is always moving. 0:04:50.839 --> 0:04:55.400 So what's it stable against? That's that's one thing. Um, 0:04:55.480 --> 0:04:57.000 So why don't you tell me about that? What what 0:04:57.160 --> 0:04:59.440 is it stable against? Is it stable against the dollar 0:04:59.520 --> 0:05:03.000 or what's it stay able against? It's well, this is 0:05:03.040 --> 0:05:06.160 a cop out answer, but it's stable against something. And 0:05:06.279 --> 0:05:09.640 every stable coin is going to be different, Um, the 0:05:09.680 --> 0:05:15.800 more noteworthy ones, Heather Gemini usd um see all of 0:05:15.839 --> 0:05:19.479 the dollar backs, the outcoin. It's stable relative to the 0:05:19.520 --> 0:05:23.440 price of the dollar, subject to counterparty risk and so 0:05:24.200 --> 0:05:25.920 the quote. But when you think about it, the US 0:05:26.000 --> 0:05:29.320 dollar isn't stable. It is an inflationary currency, so we 0:05:29.360 --> 0:05:32.719 can't say that it's a stable and generally, but it 0:05:32.800 --> 0:05:35.479 is stable relative to the price of the dollar ideally, 0:05:35.960 --> 0:05:38.880 and then you can go to different uh, trust tokens 0:05:38.920 --> 0:05:42.479 coming out with their I think their pound back stable coin, 0:05:42.760 --> 0:05:44.919 and so that will be stable versus a town. But 0:05:45.120 --> 0:05:47.320 as we look at exchange rates between the pound and 0:05:47.360 --> 0:05:50.680 the dollar, those fluctuated and so even those won't be 0:05:50.680 --> 0:05:54.279 stable against each other. So stable really comes down to 0:05:54.360 --> 0:05:57.000 what are you trying to do. At least with reserve, 0:05:57.080 --> 0:05:59.919 we're focused a lot more on the developing countries places 0:06:00.080 --> 0:06:03.479 is where their native currency is going through hyper inflation. 0:06:04.160 --> 0:06:07.520 So our initial launch area, um, most likely next quarter 0:06:07.880 --> 0:06:12.280 is going to be UM trying to give Venezuelans an 0:06:12.279 --> 0:06:15.839 opportunity to put their money into their boulevards into something 0:06:15.880 --> 0:06:18.560 that is more stable than the boulevard initially will be 0:06:18.560 --> 0:06:22.640 pegged to the dollar. Right. It's dealing with ten percent 0:06:22.760 --> 0:06:26.039 daily inflation, right, so as soon as people receive boul 0:06:26.040 --> 0:06:27.520 of ours, they have to find a way to get 0:06:27.520 --> 0:06:30.280 out of bolivars otherwise tomorrow will be ten percent less, 0:06:30.560 --> 0:06:32.880 ten percent less the day after, and that's compounding the 0:06:32.880 --> 0:06:37.760 wrong direction. Right. So, um, you know, one thing is 0:06:37.800 --> 0:06:40.320 this This thing is global, and a lot of people 0:06:40.360 --> 0:06:42.480 in the United States we get kind of trapped with this, 0:06:42.600 --> 0:06:45.039 like thinking that everything is like the United States and 0:06:45.240 --> 0:06:47.839 the US dollar is the reserve currency of the world, 0:06:47.920 --> 0:06:50.440 so it's you know, we the dollars seem stable to us, 0:06:50.600 --> 0:06:53.400 but in other countries they deal with this changing in 0:06:53.480 --> 0:06:57.120 value all the time, right, They're always watching these exchange 0:06:57.200 --> 0:07:00.440 rates and so forth. I don't want to I've too 0:07:00.480 --> 0:07:02.480 far down this rabbit hole, but maybe just poke at 0:07:02.520 --> 0:07:04.760 it a little bit. But you know, we talked about 0:07:04.920 --> 0:07:08.760 stable to what right, everything's moving, And it's interesting, I mean, 0:07:09.040 --> 0:07:10.840 if you really want to go into the history of money, 0:07:10.840 --> 0:07:13.040 for five thousand years, the world kind of was on 0:07:13.080 --> 0:07:16.360 the gold standard really up into the early nineteen hundreds 0:07:16.400 --> 0:07:20.400 and so and really I believe and and history shows 0:07:20.800 --> 0:07:23.200 that for a few hundred years, from like the four 0:07:23.400 --> 0:07:26.520 hundreds to the seventeen hundreds, the world saw a massive 0:07:26.560 --> 0:07:29.840 prosperity when the whole world was on this unified gold standard. 0:07:30.440 --> 0:07:36.160 And it's really interesting that we don't have a measurement 0:07:36.240 --> 0:07:40.320 of wealth today. So imagine if I needed to, I 0:07:40.360 --> 0:07:43.600 was building a house and like whatever, the yard was changed, 0:07:43.680 --> 0:07:45.320 Like the yard is this long today, but now the 0:07:45.400 --> 0:07:48.320 yards this long tomorrow, right, Or like the weight was 0:07:48.360 --> 0:07:50.600 this one day and the weights this, Like you need 0:07:50.680 --> 0:07:56.040 these standard units to measure things against, and I think 0:07:56.160 --> 0:07:58.720 that we don't. We don't obviously we don't have that today. 0:07:58.880 --> 0:08:01.160 Every everything is measure it against each other, but not 0:08:01.280 --> 0:08:04.640 against a standard. What do you what do you say 0:08:04.640 --> 0:08:09.480 about that? Well, if you think about gold, just generally, um, 0:08:09.720 --> 0:08:11.960 gold fluctuates in price. So even if it's going to 0:08:12.040 --> 0:08:15.000 be backing a currency like it was with the gold standard, 0:08:15.160 --> 0:08:17.120 at the price of gold, it's going to fluctuate. What 0:08:17.160 --> 0:08:21.640 does it fluctuate against? It fluctuates against the currency. Well, 0:08:21.680 --> 0:08:24.080 and there's the open market for trading, Like if you 0:08:24.120 --> 0:08:26.320 treat gold as a commodity like a lot of virtual 0:08:26.440 --> 0:08:30.119 cryptocurrencies are are are are are going to be argued 0:08:30.160 --> 0:08:36.560 to be um, that's just a volatile asset. Um. But 0:08:36.600 --> 0:08:39.480 if each currency was measured in gold, for example, so 0:08:39.559 --> 0:08:41.880 the US dollars this many dollars to announce the gold, 0:08:41.920 --> 0:08:44.439 the euros this many euros to announce a goal, the 0:08:44.480 --> 0:08:46.720 boulevards this many boulevards to announce the gold, at least 0:08:46.720 --> 0:08:51.360 everything was tied to one general measurement. But and then 0:08:51.400 --> 0:08:54.360 we would have something to stable against compared against like 0:08:54.640 --> 0:08:56.439 so even if we had like a stable coin that 0:08:56.520 --> 0:09:00.280 was paid to a basket of currencies. UM, at least 0:09:00.320 --> 0:09:03.160 we have something to compare what is stable. I don't 0:09:03.160 --> 0:09:05.720 know if it just seems it seems weird, like how 0:09:05.760 --> 0:09:07.680 do you even back into that equation when you have 0:09:07.800 --> 0:09:11.720 nothing to measure stability against. And I think that is 0:09:11.800 --> 0:09:15.840 an interesting perspective, especially where we're the world is going 0:09:15.840 --> 0:09:22.640 through globalization. Everyone's becoming more tied together, they're more international transactions. UM. 0:09:22.679 --> 0:09:26.480 But at the end of the day, UM, it doesn't 0:09:26.480 --> 0:09:29.440 need to be a stable coin. Maybe it could be bitcoin, 0:09:29.679 --> 0:09:34.160 it could be another virtual currency that doesn't currently exist. UM. 0:09:34.240 --> 0:09:37.079 When I when I initially got interested in the industry, 0:09:37.400 --> 0:09:40.640 people are talking about how you would travel around the 0:09:40.640 --> 0:09:43.360 world and not need to convert into the currency of 0:09:43.440 --> 0:09:46.400 that local jurisdiction because there would just be a global, 0:09:46.520 --> 0:09:50.280 universal payment mechanism that you could use. At the time, 0:09:50.320 --> 0:09:52.719 it was the point because there are only maybe a 0:09:52.800 --> 0:09:56.600 hundred cryptocurrencies at the time. But now there's no reason 0:09:56.679 --> 0:09:58.680 that it needs to be a stable point. Of course, 0:09:58.920 --> 0:10:00.920 it could be a stable but then again, if you're 0:10:00.960 --> 0:10:03.280 dealing with something on a global level, if you're stable 0:10:03.280 --> 0:10:05.840 against one currency, you're not stable to the rest of 0:10:05.880 --> 0:10:09.000 the world. Just hold hold the currency right? Why not 0:10:09.040 --> 0:10:11.640 just hold the currency right? And then you could say 0:10:11.720 --> 0:10:15.160 to take what UM libra is trying to do with 0:10:15.200 --> 0:10:18.200 the basket of different currencies. So you're stable relative to 0:10:18.240 --> 0:10:21.240 a basket of currencies. So I guess the question is 0:10:21.559 --> 0:10:27.200 more stable than not. I think it's definitely less small atile. Yeah, 0:10:27.280 --> 0:10:29.320 I want to jump into libra. We're gonna table that 0:10:29.400 --> 0:10:32.320 for now though. But one thing, you know, I've studied money, 0:10:32.320 --> 0:10:34.440 and i've I've I've been a big believer in gold 0:10:34.440 --> 0:10:36.400 of investing goal for a long time. And one thing 0:10:36.440 --> 0:10:40.720 that's interesting if you look at UM prices throughout history 0:10:40.760 --> 0:10:44.199 and you compare them against a basket of assets. So 0:10:44.280 --> 0:10:47.280 what is this home in the medium home price compared 0:10:47.520 --> 0:10:49.600 to how many barrels of oil would it take? How 0:10:49.640 --> 0:10:51.720 many ounces of gold would it take? How many right, 0:10:51.840 --> 0:10:53.600 how how much copper would it take? And you can 0:10:53.640 --> 0:10:56.880 compare it to assets. That's one thing. And I haven't 0:10:56.880 --> 0:10:59.959 really seen any stable coins pegging into baskets of assets. 0:11:00.080 --> 0:11:04.640 Have you seen that? Wow? I and pretty your audience. 0:11:04.760 --> 0:11:06.920 I did not lay that up for you, but that's 0:11:06.960 --> 0:11:09.960 a beautiful softball throw to me. Um, that's actually what 0:11:10.000 --> 0:11:12.839 we're trying to I was I wasn't trying to do that, 0:11:12.960 --> 0:11:17.840 so I guess tell us how you guys are different. Yeah, So, um, 0:11:17.880 --> 0:11:19.640 this was more over the long term, and it's so 0:11:20.040 --> 0:11:23.360 eventually we want to have all of our assets on Chaine. Um, 0:11:23.400 --> 0:11:27.400 we want to put the assets collateralizing outstanding stable coin 0:11:27.679 --> 0:11:34.000 into appreciating but safe assets. Think tokenized treasuries, think tokenized bonds, 0:11:34.360 --> 0:11:38.520 things that are relatively safe but are appreciating. And the 0:11:38.520 --> 0:11:41.560 ideas that if you get these assets all around the world, 0:11:41.960 --> 0:11:46.000 you could create a basket of assets that is stable 0:11:46.160 --> 0:11:49.680 just generally, not against any currency, not against anything else, 0:11:49.760 --> 0:11:52.880 just stable against the portfolio that's back in it. Of course, 0:11:52.920 --> 0:11:56.080 you then have to have a portfolio that is reasonably stable, 0:11:56.200 --> 0:11:59.439 which is difficult and until we could prove that we 0:11:59.480 --> 0:12:03.200 could do it, it's all an idea. But that's what 0:12:03.240 --> 0:12:06.160 we're trying to do is create a portfolio of assets, 0:12:06.160 --> 0:12:07.800 got to have a stable coin that makes it where 0:12:07.800 --> 0:12:10.600 the stable poin long term isn't back to any currency 0:12:10.600 --> 0:12:13.480 of any jurisdiction. Yeah, because I think you know, I've 0:12:13.600 --> 0:12:15.880 I've come out and I've said many times, especially in 0:12:15.920 --> 0:12:19.439 response to this growing thing of modern monetary theory MMT, 0:12:20.000 --> 0:12:22.640 where they want to just print more money. And I 0:12:22.720 --> 0:12:28.319 say that money is not wealth. Money measures wealth. Wealth 0:12:28.559 --> 0:12:32.680 is assets, and so it makes sense to peg it 0:12:32.920 --> 0:12:36.280 not against money, because money is nothing. Money is a measurement. 0:12:36.440 --> 0:12:38.640 To peg it, just peg it to the actual wealth, right, 0:12:38.679 --> 0:12:42.520 the actual assets. That makes sense? Um? So why so? 0:12:42.520 --> 0:12:45.000 So these stable coins have really started to get popular. 0:12:45.000 --> 0:12:47.360 We've seen a bunch of them jumping up, A bunch 0:12:47.400 --> 0:12:50.960 of big companies, institutions, vcs, etcetera are jumping on board 0:12:51.000 --> 0:12:54.680 with the stable coins. Um. I want to know why 0:12:54.920 --> 0:12:57.240 people should care about stable coins. I want to know 0:12:57.280 --> 0:13:00.320 why companies want to develop stable coins, and why do 0:13:00.679 --> 0:13:05.560 individual people care about stable coins? Sure? Um, I think 0:13:05.640 --> 0:13:08.920 that this sort of the interesting stable coins came out 0:13:08.960 --> 0:13:12.760 of the bubble bursting at the end of early eighteen. 0:13:13.840 --> 0:13:15.960 A lot of people were still saying cryptocurrencies are gonna 0:13:16.000 --> 0:13:18.520 solve remittances. They're going to be a store of value 0:13:18.640 --> 0:13:22.360 for people in countries that um, whose wealth is deteriorating 0:13:22.360 --> 0:13:26.400 because of the local financial system. But when bitcoin loses 0:13:26.520 --> 0:13:30.880 or a cryptocurrency generally loses value during a bubble, well, 0:13:31.679 --> 0:13:34.000 what you're trying to solve doesn't really solve it. So 0:13:34.040 --> 0:13:36.360 I think that's sort of where the idea of well 0:13:36.400 --> 0:13:39.200 maybe stable points to be a lot more interesting. And 0:13:39.240 --> 0:13:40.960 also as you have depths, you're going to need a 0:13:40.960 --> 0:13:44.720 stable payment mechanism within the depth anyway. But um, I 0:13:44.760 --> 0:13:46.600 find that more of a long term thing than a 0:13:46.720 --> 0:13:49.439 short term thing. I think the developing countries is more 0:13:50.200 --> 0:13:53.680 um an interesting short term play. So that's like the 0:13:53.760 --> 0:13:56.640 retail play, right, So, like from a retail perspective as 0:13:56.640 --> 0:13:58.720 a user, like if I put all my money in 0:13:58.760 --> 0:14:02.640 bitcoin or whatever point, it loses, like, that's horrible, I 0:14:02.960 --> 0:14:05.040 lose everything. So why don't I just put it into 0:14:05.080 --> 0:14:07.360 a stable coin that doesn't lose value? That's kind of 0:14:07.360 --> 0:14:10.680 like an individual retails perspective. I guess then you have 0:14:10.800 --> 0:14:14.000 to tell me why it's better than whatever currency I'm holding, 0:14:14.040 --> 0:14:16.959 Like why not just keep it in the dollar? Then? Right, 0:14:17.600 --> 0:14:21.960 then there's that. Yeah, and it comes down to um 0:14:22.040 --> 0:14:25.280 remittance of sending money back home like a PayPal Western Union, 0:14:25.280 --> 0:14:28.120 they take ten to twelve percent feets large largely because 0:14:28.120 --> 0:14:31.640 they solve the last mile problems, and whereas a crypto 0:14:31.680 --> 0:14:35.280 currency transaction will range probably from point zero zero one 0:14:35.280 --> 0:14:37.880 percent to maybe a point one percent or one percent, 0:14:38.200 --> 0:14:41.160 depending on which cryptocurrency you're using so all of a sudden, 0:14:41.480 --> 0:14:43.400 un like if you're trying to use the existing financial 0:14:43.480 --> 0:14:46.680 system from the US trying to send money to let's 0:14:46.680 --> 0:14:49.680 just say Europe, even you send a bank wire will 0:14:49.720 --> 0:14:53.480 cost and it will take a day or two um 0:14:53.520 --> 0:14:57.480 to actually get there, whereas I could send that same 0:14:57.480 --> 0:15:00.480 amount of money more cheaply using a crypt a currency. 0:15:00.560 --> 0:15:02.240 And if it's a large amount, maybe I want to 0:15:02.440 --> 0:15:04.840 make sure that it's stable and value so there isn't 0:15:04.840 --> 0:15:07.880 a volatility risk there. I'm able to move money around 0:15:08.040 --> 0:15:10.880 uh much more easily. Um. But going back to your 0:15:10.960 --> 0:15:13.640 question about why would I want to use the sur 0:15:13.720 --> 0:15:18.000 by this, If you're a retail investor, unless you're sending remittances, 0:15:18.000 --> 0:15:22.080 are dealing with international cross border payments, then most good enough. 0:15:22.080 --> 0:15:25.040 PayPal is good enough, voll is good enough. People in 0:15:25.080 --> 0:15:28.840 the US largely don't need this right now. And I 0:15:28.880 --> 0:15:32.400 believe that cryptocurrency stable points are going to more largely 0:15:32.400 --> 0:15:36.040 take place and grow outside of the US and more 0:15:36.080 --> 0:15:39.840 developed countries. UM. So that's who would use it. People 0:15:40.040 --> 0:15:43.840 who think that the cryptocurrency is better than their either 0:15:44.320 --> 0:15:46.840 currency where they live or they're dealing in a country 0:15:46.880 --> 0:15:49.280 like Cyprus, which took a certain percentage out of bank 0:15:49.320 --> 0:15:52.560 account several years ago. And so that's why a retail 0:15:52.600 --> 0:15:57.000 person I use it. Why would an investor UM investment 0:15:57.000 --> 0:16:00.000 a stable cooin UM? Generally you don't invest in the 0:16:00.040 --> 0:16:03.080 stable coin. You're either investing in the company behind the 0:16:03.120 --> 0:16:07.320 stable coin, a profit sharing agreement, or there's a secondary token. 0:16:08.040 --> 0:16:10.800 And so when we're dealing with feed dollars in a 0:16:10.840 --> 0:16:13.920 bank account, the general business model is very similar to 0:16:14.000 --> 0:16:17.200 a PayPal where they're getting a yield on the app 0:16:17.320 --> 0:16:19.440 the dollars in the bank account from whatever bank that 0:16:19.440 --> 0:16:21.960 they're storing it with. And so it's more money that 0:16:22.000 --> 0:16:25.040 you're holding, more stable point upstanding, the more interest revenue 0:16:25.040 --> 0:16:30.240 that you're collecting UM not all or like an insurance company. Right, 0:16:30.280 --> 0:16:32.880 so they have that float, they can invest the invest 0:16:32.960 --> 0:16:36.400 what they're holding, right, And that's actually where it becomes interesting. 0:16:36.400 --> 0:16:39.400 Where's the different types of financial institutions that people could use. 0:16:39.480 --> 0:16:43.560 Whether it's a trust company like a Gemini, whether it 0:16:43.760 --> 0:16:48.640 is an MSP like trust token UM, what you're allowed 0:16:48.680 --> 0:16:51.400 to do and what investments you're allowed to make are 0:16:51.480 --> 0:16:53.880 very different depending on the type of financial institution that 0:16:53.920 --> 0:16:57.720 you're regulated as and so that's just something to consider. Um, 0:16:57.760 --> 0:17:00.560 what is the money that is back in the stable point, 0:17:00.600 --> 0:17:02.880 where is it, what is it being used for? And 0:17:02.920 --> 0:17:05.199 you just want to make sure that people aren't just 0:17:05.280 --> 0:17:09.080 making large debts that you won't get any benefit at 0:17:09.080 --> 0:17:11.280 the end. But then again, a stable coin is meant 0:17:11.280 --> 0:17:14.640 to not appreciate. Yeah, exactly, it's not meant to appreciate. 0:17:14.720 --> 0:17:18.520 So from a from a retail user perspective, UM, if 0:17:18.600 --> 0:17:21.880 that stable coin could hold value better than whatever fiat 0:17:21.880 --> 0:17:24.280 currency I have available to me, that's one option why 0:17:24.280 --> 0:17:27.200 I'd want to use it UM. The other option would 0:17:27.200 --> 0:17:31.000 be UM. I mean the other option is an investor 0:17:31.080 --> 0:17:33.080 doesn't make sense because it's stable. It's not I want 0:17:33.080 --> 0:17:34.320 to invest in something that's going to go up in 0:17:34.359 --> 0:17:37.480 value and the stable coin is not supposed to do that. UM. 0:17:37.520 --> 0:17:40.080 Now why do we see so? And I guess you 0:17:40.160 --> 0:17:42.520 answered so. The reason why we see big companies vcs, 0:17:42.520 --> 0:17:47.040 etcetera starting stable coins UM, the play, the probably the 0:17:47.080 --> 0:17:50.760 predominant revenue play would be to have those assets under 0:17:50.760 --> 0:17:55.480 management which they could invest and make more money on. Yeah, 0:17:55.520 --> 0:17:59.320 that's one reason why people would be interested in it. UM. 0:17:59.440 --> 0:18:01.520 And at the end of the day, data is valuable 0:18:01.760 --> 0:18:05.359 at the bitcoin isn't anonymous, it's pseudo anonymous. If you 0:18:05.440 --> 0:18:08.080 run a node like you would get access and you're 0:18:08.080 --> 0:18:11.680 able to UM parse the data and analyze that data properly, 0:18:12.000 --> 0:18:15.040 you're able to learn a lot about a transaction. And 0:18:15.760 --> 0:18:20.639 when I think about conglomerates creating their own cryptocurrency and 0:18:20.800 --> 0:18:24.680 running the validator nodes themselves, even if they're not collecting 0:18:24.680 --> 0:18:28.959 personal data directly by looking at your idea or anything 0:18:29.000 --> 0:18:32.680 like that, they're able to glean information about your spending 0:18:32.720 --> 0:18:35.960 habits and what you're using this for. And I think 0:18:36.000 --> 0:18:38.720 that is probably I don't know if that's more valuable 0:18:38.800 --> 0:18:41.720 than the interest from the money backing it, but I 0:18:41.760 --> 0:18:44.119 do see that there's value in that as well. Yeah, 0:18:44.119 --> 0:18:46.199 so that's what some of these stable coin companies would be. 0:18:46.240 --> 0:18:49.000 They have a play possibly on the data as well 0:18:49.040 --> 0:18:53.000 as whatever the float they can do with the float. Yeah, 0:18:53.400 --> 0:18:59.480 got it now. Um let's so with stable coins um 0:18:59.600 --> 0:19:02.919 for dominantly, they're all centrally controlled. You talked about the 0:19:02.960 --> 0:19:07.280 counterparty risk as well, they're essentially controlled, and they're trying 0:19:07.320 --> 0:19:10.400 to peg to something more more stable. So whether that's 0:19:10.440 --> 0:19:13.960 a currency of basket of assets or whatever um, And 0:19:13.960 --> 0:19:17.040 I'm guessing there's all different types of ways that they 0:19:17.040 --> 0:19:21.879 can try to hold that peg um. But historically, doesn't 0:19:21.920 --> 0:19:24.680 it seem like all pegs have always broken, even even 0:19:24.920 --> 0:19:29.240 nation states haven't been able to hold their pegs. Yeah, 0:19:29.280 --> 0:19:33.400 you have to get all stakeholders involved interested in protecting 0:19:33.400 --> 0:19:36.919 the peg. And that's sort of I could speak to 0:19:37.240 --> 0:19:40.080 Reserve because I know that much more intimately than I 0:19:40.119 --> 0:19:43.159 know the other stable print projects out there. But the 0:19:43.200 --> 0:19:46.399 way we approach this differently is we have a secondary 0:19:46.440 --> 0:19:50.399 token that incentivizes arbitragers to keep the teg on exchanges. 0:19:51.080 --> 0:19:52.760 You're always like, you're never gonna be able to keep 0:19:52.800 --> 0:19:57.440 the teg unless it's relatively constant on exchanges. But the 0:19:57.520 --> 0:19:59.639 question is how do you do that. You could perform 0:19:59.640 --> 0:20:02.240 your own market making function, but then you're never going 0:20:02.280 --> 0:20:05.000 to get to decentralized and there's gonna be a lot 0:20:05.000 --> 0:20:07.520 of other issues of trying to keep a peg yourself. 0:20:08.119 --> 0:20:10.920 But if you trust that people are incentivized because they're 0:20:10.960 --> 0:20:14.160 going to profit by keeping the peg, all of a sudden, 0:20:14.440 --> 0:20:17.440 maybe that will Like will that work? Um, we haven't 0:20:17.440 --> 0:20:19.880 seen it done yet, so i'd like to think it 0:20:19.920 --> 0:20:23.640 could work, But I think you have to incentivize everyone 0:20:24.280 --> 0:20:26.600 in the ecosystem to keep the peg because it's in 0:20:26.640 --> 0:20:29.159 their best interests to do so. In a normal the 0:20:29.280 --> 0:20:32.600 outcoin back stable coin, why does a user, why does 0:20:32.920 --> 0:20:34.720 the market make The people that are buying it just 0:20:34.720 --> 0:20:37.680 want to be able to arbitrage and on exchanges, that's 0:20:37.680 --> 0:20:40.080 where their profit is. They're not interested in making it 0:20:40.119 --> 0:20:42.119 stay a dollar because they don't make money off of that. 0:20:42.560 --> 0:20:47.040 They'd rather it's be different. Yeah, I mean George Soros 0:20:47.080 --> 0:20:49.600 one of the most famous and prolific investors in the world. 0:20:49.680 --> 0:20:52.600 I mean, he's famous because of breaking the peg, right, 0:20:52.680 --> 0:20:55.720 So he made a billion dollars in a day by 0:20:55.760 --> 0:20:59.080 breaking the peg. And so that's why it just seems 0:20:59.119 --> 0:21:02.240 like man if if if nations can't even do keep 0:21:02.280 --> 0:21:05.560 the peg, how are these smaller institutions going to do that. 0:21:05.640 --> 0:21:07.840 So it's an interesting challenge that I guess we'll have 0:21:07.840 --> 0:21:09.879 to wait and see how that plays out. Yeah, in 0:21:09.880 --> 0:21:12.119 our white paper, we discussed the saurus attack, and we 0:21:12.200 --> 0:21:15.960 think we've created mechanisms to prevent against run on the 0:21:16.000 --> 0:21:20.240 bank and a saurus attack, largely by after a certain point. 0:21:20.400 --> 0:21:23.000 If we're saying that there are certain assets that appreciate. 0:21:23.440 --> 0:21:25.280 If that means are volved filed, they could go down. 0:21:25.400 --> 0:21:28.240 Maybe it tries to read defaults in a foreign jurisdiction 0:21:28.359 --> 0:21:31.040 for whatever reason, it could default, and maybe that starts 0:21:31.080 --> 0:21:35.000 triggering itsel Off. Our protocol has a mechanism in place 0:21:35.040 --> 0:21:39.399 where it basically prevents withdrawing after a certain point, just 0:21:39.560 --> 0:21:41.840 limited to a paradis share of the basket. That way, 0:21:42.280 --> 0:21:44.520