Hello and welcome back to Coin Desk live from the avalanche summit in Buenos Aires, the premier avalanche community event of 2024. I’m Jen Sasi. Here is my co-host Zach Seward and we are bringing you a very special episode of Markets Daily. Today on this show, we navigate the in shaping the crypto markets. So whether you’re actively trading or just curious about the volatility that is the crypto markets. The show is your compass to navigating the space and understanding what’s going on. Joining the show today is a Agora co founder and Ceo Nick Bene. Hey, thanks for having me. Thanks for being here now. This is a little bit different. This show is all about the crypto markets, right? So far, we’ve been talking about lam and the event and cool things that people are building. You’re building a very cool thing. We’re gonna get through it in a second, but I gotta ask you, Bitcoin was up over $67,000 this morning, it’s on a bit of a little bit of rally after just kind of doing nothing for a while. What do you make of this price action? What’s driving it, I think it’s fairly straightforward as interest rates come down and people expect liquidity in the markets to go up, risk assets go up. And so that’s why you saw, I think Bitcoin, uh, take a jump over the last few days and, you know, people are expecting that interest rates are going to continue to come down over the next 12 to 18 months. I don’t think, you know, the exact month matters so much as what the trajectory of rates are. And as you know, people continue to expect rates to go down, you’ll see risk, assets go up. So I’m pretty sure that you’ve told me before. You don’t do predictions, but I always have to ask. So, I’m sorry for this. But some guests who have come on the show, um, in the last, let’s say a couple of weeks have predicted that we will get another all time high probably before March curious if you agree or disagree or are you just gonna leave me hanging dry? Yeah, I think, uh, you know, depending on what happens in November in the United States. I think, uh, you could see certainly an all time high before, uh, March of, of next year. Uh, obviously there’s, I think one group that’s probably a little bit more pro, uh, crypto and that’ll, you know, resonate or the markets if, if that group gets elected. So I think, you know, by March, if Trump wins, we’ll see a new all time high and if Trump loses, you think maybe we won’t, I think it will just be a little bit less animal spirits. Uh, I think ultimately interest rates are probably still gonna come down a little bit. Um, but, you know, he’s been very active and vocal within the sort of crypto community or at least is a seemingly more pro crypto candidate. So I think that’ll get, you know, the animal spirits going. But I think regardless, we’re probably gonna see uh an upswing in the markets given where interest rates are headed. Now, you brought up Trump. So I got to ask about this Token yesterday. This Token news, I don’t know if you’ve been following all the Trump Token news. I saw that they launched the fundraise for it. I haven’t kept too many tabs on it, but I heard that the site was down at one point. Um But I don’t know, you guys may be a little bit more up to down than I am. Yeah, we’ve been preparing for this. Let’s talk about a Agora stablecoins have been uh a theme as we get this show started. We’ve heard that Stablecoin adoption, especially in Argentina um is growing at a rapid pace. You are very focused on Stablecoins with a Gora A US D talk to me about how you’re looking at the Latin market. Yeah, it’s a, it’s a large focus for us. Um And the way that we’re focusing on it is working directly with businesses like we do across the world. So what’s different about our model is uh you know, we’re one institutional grade but credibly neutral, right? So the other institutional grade stablecoin is US DC. They have a singular partner in Coinbase. So they share about half the revenue with Coinbase. You know, our view is that it’s all these different businesses and their users that participate in this economic system and they should actually be capturing the majority of the value of that. And so we’re working with local uh exchanges, uh local cross border payment providers. And what we do is we kyb those entities and then share income with them based on A US D on the platform. And so it’s a very deep uh relationship, we sort of embed with these businesses. Um but it’s, it’s really flexible so we can work with you, commodity import, exporters, uh payment companies, crypto exchanges, you know, traditional Neo bank fintech, whomever. And so uh I’ve personally spent a lot of time here. We actually have employees that are based in, in Argentina already. And what’s nice is that, you know, they are, you know, this is where real crypto adoption has already started to happen on the, on the financial side. And so having employees that are using these products day to day is very uh different and it provides a good perspective on, you know, informing where we should take new products in the future, you mentioned some of the industry verticals and of course, Argentina being kind of unique in uh facing some of these challenges of hyper inflation and other economic issues. Are there any other reasons that stand out to you that you think will see um stronger adoption in terms of stable coin payments? And if so why? Yeah, for Latin America and in South America in particular, has been a really good hub of fintech innovation beyond crypto, right? Uh It’s sort of, you know, they have the benefit of sort of hopping, hopping the system. So you’ve had things like picks get launched in uh Brazil, which is actually like a state run program, but it enables instant settlement of, of payments in in real time. And so it’s always been a hub of fintech and I think um people aren’t used to the traditional banking system like we are in, in the US. And so you have people that are comfortable using neo banks, fintech apps, payment applications at a, you know, much more broad usage and spectrum than you would in the United States or other Western economies. And so it’s, I think it’s always been a hub for fintech and that’s why you’re seeing it take off so so quickly. But also, you know, you mentioned the hyperinflation is people have to be so attuned to what is going on with their finances on a day to day basis because if you’re not, then you’re just losing your own wealth because of inflation, right? And so you almost have this hyper focus on what is going on with, you know, my personal savings, my investments and I, I think that’s why, you know, in part, it has been a hub for, for fintech innovation uh in the past with things like, uh you know, um New Bank and, and others, Gora is a relatively young company. You’ve talked to us a little bit about the differentiators among some of your competitors. But when you think about the big stablecoin issue is US DT US DC, how do you think about taking market share from these um other Stablecoins and growing beyond Latin America? Yeah. So our, our view is one the stable coin market is outside the US because it’s most valuable there, right? You have cross border payments, em le and dollar demand. So it’s very fortunate for us that our biggest competitor in US DC has this partnership with the largest US exchange. And our view is OK. Today, you have these two players in tether and, and circle, right? Which are really extracting rent from this whole system. They’re making $8 billion a year off of sort of everyone else. And our view is OK. Well, if you go directly to the business owner and say, hey, we’ll share cash flow with you based on the stable coins that are on your platform. Like that’s gonna resonate with them. You don’t have to worry about compliance, building a liquidity program, tech, any of that, you’re just capturing, you know, the, the economic value and it’s 100% margin and that resonates with people, right, whether it’s, uh, you know, a dab like Morpho um or a payments business or an exchange and it’s super flexible. And so our view is that by going direct to all these businesses, they can then sort of change their product and oriented around A US D versus A US DC or tether. And that’ll help to drive uh adoption. We obviously have some really good early partners as well. Um You know, because they feel like they’ve been cut out from the system and in some ways, US DC is actually a competitive product to them, right? So, because, you know, for every dollar that US DC generates on avalanche, for example, half of that is going to Coinbase who of course has their own chain now in base, right? And this is true across crypto is, you know, with, with circle uh half that revenue is a company that has a wallet exchange, custodian prime broker and most people don’t like that. And so, you know, our view, which I don’t think is a particularly insightful one is like, hey, the market of everyone else is larger than the market of sort of just, just Coinbase, right? And so going to all these businesses and being that partner for them um has resonated. Hey, everyone did you know 52 million Americans own cryptocurrencies. That’s not just the, it’s a movement, economic, social and political, decentralized, finance, Blockchain and digital currencies are more than buzzwords. They are the future this November. It’s on us to show up and step up. We need to protect crypto to ensure it continues to fuel innovation and freedom for our families and businesses. Don’t let this opportunity slip by the future of crypto is on the line. Make your voice heard this November and pledge to vote now at stand with crypto.org backslash pledge, talking about the asset mix of A US D. Is it the same stuff that you find with us DC where it’s, you know, T bills, cash equivalents or are you guys further out of the risk curve to make sure that those yields are there for these participating businesses? Yeah, it looks quite similar. So our views, you need to be institutional grade and scalable from day one. So uh it’s primarily convert uh composed of overnight reverse repo and short dated us Treasury Bills, State Street, which is one of the largest globally systemic banks in the world is the cash custodian and fund administrator of the fund. Uh so they could take in $100 billion tomorrow and it’s not that big of a deal to State Street um where it would be the regional banks, right? And so starting with a world class scalable bank was really important to us. And then Van Eck, which is $100 billion asset manager manages uh the portfolio. So you have someone that’s, you know, regulated in dozens of countries, uh globally manages over $100 billion managing those assets. So you know that they’re safe and secure from, from day one. That’s nice of them to get the naming rights on your last name too. Yeah, that’s a good deal. You gotta know the relationship there. Yeah, that’s nice. That’s great sponsorship. You like that? I was thinking the same joke, Zack. So thank you for that. Why are you so passionate about this? I think we’ve talked about this before and I haven’t asked you what makes you want to solve this problem? Yeah. So, um I think one of the reasons that I got into crypto in, in the first place is because it solves like financial problems for the world’s most unfortunate, right? Uh Today, if you look, you know, are in Mexico, 50% of the population is unbanked or, or underbanked. And that’s mostly because uh, banks don’t want to serve them because they can’t make enough money. They’re not good customers, so to speak. But with Blockchain technology and fiat stables, like they can be their own bank and save in, you know, a dollar in the dollar, which is gonna retain value over time, right? And so, you know, really promotes financial freedom globally and gives finance so access to financial opportunities to those that are least fortunate. Also, I was looking at how the stable coin market was developing with Tether and Circle. And I felt that it was worse than the banking system, right? Like they were really just rent seekers on top of all of crypto. And I love this space. And I said, hey, well, if we can push back 80% of the revenues from tether and circle to all these businesses across crypto that makes this whole space much stronger and better. And so like that to me was a worthy enough goal, but I think there’s a large mission component uh around it as well. And then lastly, I’ll just say like, I believe that we are an inning one of Blockchain eating financial services and payments. And I wanted to, you know, basically dedicate my career to this because I think you can reduce transaction costs, remove a lot of middle men and inject a lot of uh dollars back into people who deserve it. Um Versus, you know, rent seekers both in the current financial system and sort of at the stable coin layer that we have now with uh and circle how many businesses are on board right now. What’s the growth looking like for you guys? Is it just a BD hustle game right now or what’s the next 12 months look like? It? It is a BD hustle game right now. Uh We have 50 businesses that have on boarded in the last three months. Uh Growing pretty quickly. We’ve now already hit 100 million in weekly volume on avalanche alone. Uh Just within two months of launch, we’re a little over 70 million and minted today. Expect to be several 100 million over the next couple of months. And it’s just, yeah, it’s a ground game, um, getting as many customers up and running as soon as possible and, and building liquidity across uh new networks and environments. Like it, it sounds like you were saying before, in many ways, there are aspects of the industry that are replicating the same issues that it’s trying to solve. How do you see the industry moving away from that or is it a healthy balance that looks somewhat like the traditional financial system looks now with these kinds of pockets of solutions for the people who need them? Yeah, I, I think ultimately in 10 to 20 years it’s gonna look very similar to the existing financial system in some regards, right? Like you’re gonna have exchanges, you’ll have dedicated custodians. Um Like you do in traditional financial markets today, what I do think is you’ll just have a lower barrier of access for individuals to access financial products, right? Whether it’s just dollars on chain like stablecoins or relatively safe yield products that they don’t have access to today through, you know, an Ave uh the Ave London Borough market or a Morpho vault and so I think it will be a combination of the two. but you know, we’ll see. All right, Nick, we are going to have to leave it there. Thank you so much for joining us. Thank you for having me live set up here.
