Stablecoins are set to transform fundraising and transactions, challenging traditional financial systems.
Key takeaways
- The financial system is moving towards tokenization, with stablecoins poised for significant growth.
- Stablecoin infrastructure is crucial for embedding financial products in applications.
- Stablecoins offer a vastly improved experience for fundraising and transactions over traditional methods.
- Many crypto-native businesses struggle with spending assets due to being underbanked.
- The lack of utility and usability is a major hurdle for stablecoin adoption.
- Integrating stablecoins with existing networks like Visa can enhance usability.
- Developing infrastructure for offshore issuance is essential due to US regulations.
- The crypto industry is expected to grow significantly, with companies positioning themselves as leaders.
- Interchange revenue is a key income source, shared with partners through card transactions.
- Building partnerships with Visa requires strategic networking and understanding their structure.
- Visa is actively forming partnerships in the crypto space to define its role in digital assets.
- Being a nonbank principal member allows for direct Visa settlements, crucial for stablecoin operations.
- The payment ecosystem involves multiple layers, from program managers to payment networks.
- The fintech space is competitive but offers room for many players due to its vastness.
- Collapsing the stack in fintech provides more leverage to share benefits with customers.
Guest intro
Charles Yoo-Naut is co-founder and CTO of Rain, a stablecoin-native infrastructure provider that grew to a $2B company. He co-founded Rain in 2021 after participating in the On Deck fellowship and previously worked at Into It, scaling financial products. Under his leadership, Rain raised $250M and partnered with Visa to advance crypto payments.
The future of stablecoins in financial systems
-
— Charles Yoo-Naut
- Stablecoin infrastructure is essential for embedding financial products into applications.
-
— Charles Yoo-Naut
- Many crypto-native businesses face challenges with spending their assets due to being underbanked.
- The lack of utility and usability is a significant bottleneck for stablecoin adoption.
- Leveraging networks like Visa can enhance stablecoin usability.
-
— Charles Yoo-Naut
- Developing infrastructure for offshore issuance is crucial due to US regulations.
-
— Charles Yoo-Naut
Overcoming challenges in the crypto space
- The crypto industry is expected to grow significantly, with companies positioning themselves as leaders.
-
— Charles Yoo-Naut
- Interchange revenue is generated from merchant fees for card transactions, shared with partners.
-
— Charles Yoo-Naut
- Building partnerships with Visa requires perseverance and understanding their structure.
-
— Charles Yoo-Naut
- Visa is aggressive in forming crypto partnerships to define its role in digital assets.
-
— Charles Yoo-Naut
Enhancing stablecoin usability
- Being a nonbank principal member allows for direct Visa settlements, crucial for stablecoin operations.
-
— Charles Yoo-Naut
- Stablecoin integration is seamless for end users, who may not realize they are using stablecoins.
-
— Charles Yoo-Naut
- The payment ecosystem involves multiple layers, including program managers, issuing banks, and payment networks.
-
— Charles Yoo-Naut
- The fintech space is competitive but offers room for many players due to its vastness.
-
— Charles Yoo-Naut
Addressing inefficiencies in payment systems
- Stablecoins can significantly reduce inefficiencies in money movement, benefiting consumers.
-
— Charles Yoo-Naut
- Consumer payment experiences in the US are satisfactory, but underlying inefficiencies exist.
-
— Charles Yoo-Naut
- Future payment upgrades will happen under the surface without changing consumer habits.
-
— Charles Yoo-Naut
- Stablecoin settlement reduces collateral requirements for traditional issuers.
-
— Charles Yoo-Naut
The role of stablecoins in emerging markets
- Stablecoins provide a crucial solution for individuals in emerging markets to access dollar savings.
-
— Charles Yoo-Naut
- The next year will see more mainstream use cases for stablecoins in existing financial flows.
-
— Charles Yoo-Naut
- Stablecoins enable instant cross-border transactions, improving remittance processes.
-
— Charles Yoo-Naut
- Tokenization of assets can streamline complex processes like home mortgages.
-
— Charles Yoo-Naut
Strategic approaches in fintech
- Partnering with established companies is more effective than going direct to consumer.
-
— Charles Yoo-Naut
- The majority of their revenue and growth comes from markets outside the US.
-
— Charles Yoo-Naut
- A global issuing footprint can lead to unexpected market opportunities.
-
— Charles Yoo-Naut
- Western Union’s fees may decrease as they become more efficient with stablecoin transactions.
-
— Charles Yoo-Naut
The evolution of crypto and fintech
- The crypto card market will see more niche products targeting specific customer needs.
-
— Charles Yoo-Naut
- The current crypto market mirrors the evolution of traditional fintech markets.
-
— Charles Yoo-Naut
- The transition to stablecoins mirrors past technological shifts, with transitional products necessary.
-
— Charles Yoo-Naut
- Once a critical mass of users adopt tokenized money, new products will emerge.
-
— Charles Yoo-Naut
Innovations in on-chain finance
- On-chain credit allows for programmatic borrowing and repayment through smart contracts.
-
— Charles Yoo-Naut
- By 2026, on-chain credit will become more mainstream with significant adoption.
-
— Charles Yoo-Naut
- Under-collateralized on-chain lending is an unsolved problem requiring identity verification.
-
— Charles Yoo-Naut
- People are more inclined to hold their crypto assets long-term rather than spend them.
-
— Charles Yoo-Naut
Privacy and strategic shifts in blockchain
- There is increasing interest in privacy from traditional institutions and fintechs.
-
— Charles Yoo-Naut
- Polygon is transitioning from a general-purpose chain to a payments-focused chain.
-
— Charles Yoo-Naut
- High Ethereum mainnet costs forced businesses to adapt their settlement processes.
-
— Charles Yoo-Naut
- The evolution of infrastructure in crypto has improved the onboarding process for users.
-
— Charles Yoo-Naut
Investment dynamics and market perceptions
- The fundraising landscape for crypto shifted dramatically post-FTX and Terra Luna incidents.
-
— Charles Yoo-Naut
- Stablecoin businesses struggle to attract investment due to the lack of a token.
-
— Charles Yoo-Naut
- Investors undervalue established products if they haven’t launched, treating them as new opportunities.
-
— Charles Yoo-Naut
- The decision to pursue additional funding rounds is based on unlocking new opportunities.
-
— Charles Yoo-Naut
Organizational strategies and growth
- Rain maintains a flat and lean organizational structure to enhance decision-making.
-
— Charles Yoo-Naut
- Launching a card program requires a non-self-service approach for customer legitimacy.
-
— Charles Yoo-Naut
- The pod structure in engineering allows for flexibility and efficient delegation.
-
— Charles Yoo-Naut
- The company is transitioning from inbound to a more targeted outbound sales strategy.
-
— Charles Yoo-Naut
Stablecoins are set to transform fundraising and transactions, challenging traditional financial systems.
Key takeaways
- The financial system is moving towards tokenization, with stablecoins poised for significant growth.
- Stablecoin infrastructure is crucial for embedding financial products in applications.
- Stablecoins offer a vastly improved experience for fundraising and transactions over traditional methods.
- Many crypto-native businesses struggle with spending assets due to being underbanked.
- The lack of utility and usability is a major hurdle for stablecoin adoption.
- Integrating stablecoins with existing networks like Visa can enhance usability.
- Developing infrastructure for offshore issuance is essential due to US regulations.
- The crypto industry is expected to grow significantly, with companies positioning themselves as leaders.
- Interchange revenue is a key income source, shared with partners through card transactions.
- Building partnerships with Visa requires strategic networking and understanding their structure.
- Visa is actively forming partnerships in the crypto space to define its role in digital assets.
- Being a nonbank principal member allows for direct Visa settlements, crucial for stablecoin operations.
- The payment ecosystem involves multiple layers, from program managers to payment networks.
- The fintech space is competitive but offers room for many players due to its vastness.
- Collapsing the stack in fintech provides more leverage to share benefits with customers.
Guest intro
Charles Yoo-Naut is co-founder and CTO of Rain, a stablecoin-native infrastructure provider that grew to a $2B company. He co-founded Rain in 2021 after participating in the On Deck fellowship and previously worked at Into It, scaling financial products. Under his leadership, Rain raised $250M and partnered with Visa to advance crypto payments.
The future of stablecoins in financial systems
-
— Charles Yoo-Naut
- Stablecoin infrastructure is essential for embedding financial products into applications.
-
— Charles Yoo-Naut
- Many crypto-native businesses face challenges with spending their assets due to being underbanked.
- The lack of utility and usability is a significant bottleneck for stablecoin adoption.
- Leveraging networks like Visa can enhance stablecoin usability.
-
— Charles Yoo-Naut
- Developing infrastructure for offshore issuance is crucial due to US regulations.
-
— Charles Yoo-Naut
Overcoming challenges in the crypto space
- The crypto industry is expected to grow significantly, with companies positioning themselves as leaders.
-
— Charles Yoo-Naut
- Interchange revenue is generated from merchant fees for card transactions, shared with partners.
-
— Charles Yoo-Naut
- Building partnerships with Visa requires perseverance and understanding their structure.
-
— Charles Yoo-Naut
- Visa is aggressive in forming crypto partnerships to define its role in digital assets.
-
— Charles Yoo-Naut
Enhancing stablecoin usability
- Being a nonbank principal member allows for direct Visa settlements, crucial for stablecoin operations.
-
— Charles Yoo-Naut
- Stablecoin integration is seamless for end users, who may not realize they are using stablecoins.
-
— Charles Yoo-Naut
- The payment ecosystem involves multiple layers, including program managers, issuing banks, and payment networks.
-
— Charles Yoo-Naut
- The fintech space is competitive but offers room for many players due to its vastness.
-
— Charles Yoo-Naut
Addressing inefficiencies in payment systems
- Stablecoins can significantly reduce inefficiencies in money movement, benefiting consumers.
-
— Charles Yoo-Naut
- Consumer payment experiences in the US are satisfactory, but underlying inefficiencies exist.
-
— Charles Yoo-Naut
- Future payment upgrades will happen under the surface without changing consumer habits.
-
— Charles Yoo-Naut
- Stablecoin settlement reduces collateral requirements for traditional issuers.
-
— Charles Yoo-Naut
The role of stablecoins in emerging markets
- Stablecoins provide a crucial solution for individuals in emerging markets to access dollar savings.
-
— Charles Yoo-Naut
- The next year will see more mainstream use cases for stablecoins in existing financial flows.
-
— Charles Yoo-Naut
- Stablecoins enable instant cross-border transactions, improving remittance processes.
-
— Charles Yoo-Naut
- Tokenization of assets can streamline complex processes like home mortgages.
-
— Charles Yoo-Naut
Strategic approaches in fintech
- Partnering with established companies is more effective than going direct to consumer.
-
— Charles Yoo-Naut
- The majority of their revenue and growth comes from markets outside the US.
-
— Charles Yoo-Naut
- A global issuing footprint can lead to unexpected market opportunities.
-
— Charles Yoo-Naut
- Western Union’s fees may decrease as they become more efficient with stablecoin transactions.
-
— Charles Yoo-Naut
The evolution of crypto and fintech
- The crypto card market will see more niche products targeting specific customer needs.
-
— Charles Yoo-Naut
- The current crypto market mirrors the evolution of traditional fintech markets.
-
— Charles Yoo-Naut
- The transition to stablecoins mirrors past technological shifts, with transitional products necessary.
-
— Charles Yoo-Naut
- Once a critical mass of users adopt tokenized money, new products will emerge.
-
— Charles Yoo-Naut
Innovations in on-chain finance
- On-chain credit allows for programmatic borrowing and repayment through smart contracts.
-
— Charles Yoo-Naut
- By 2026, on-chain credit will become more mainstream with significant adoption.
-
— Charles Yoo-Naut
- Under-collateralized on-chain lending is an unsolved problem requiring identity verification.
-
— Charles Yoo-Naut
- People are more inclined to hold their crypto assets long-term rather than spend them.
-
— Charles Yoo-Naut
Privacy and strategic shifts in blockchain
- There is increasing interest in privacy from traditional institutions and fintechs.
-
— Charles Yoo-Naut
- Polygon is transitioning from a general-purpose chain to a payments-focused chain.
-
— Charles Yoo-Naut
- High Ethereum mainnet costs forced businesses to adapt their settlement processes.
-
— Charles Yoo-Naut
- The evolution of infrastructure in crypto has improved the onboarding process for users.
-
— Charles Yoo-Naut
Investment dynamics and market perceptions
- The fundraising landscape for crypto shifted dramatically post-FTX and Terra Luna incidents.
-
— Charles Yoo-Naut
- Stablecoin businesses struggle to attract investment due to the lack of a token.
-
— Charles Yoo-Naut
- Investors undervalue established products if they haven’t launched, treating them as new opportunities.
-
— Charles Yoo-Naut
- The decision to pursue additional funding rounds is based on unlocking new opportunities.
-
— Charles Yoo-Naut
Organizational strategies and growth
- Rain maintains a flat and lean organizational structure to enhance decision-making.
-
— Charles Yoo-Naut
- Launching a card program requires a non-self-service approach for customer legitimacy.
-
— Charles Yoo-Naut
- The pod structure in engineering allows for flexibility and efficient delegation.
-
— Charles Yoo-Naut
- The company is transitioning from inbound to a more targeted outbound sales strategy.
-
— Charles Yoo-Naut
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Source: https://cryptobriefing.com/charles-yoo-naut-stablecoins-are-revolutionizing-fundraising-and-transactions-the-critical-role-of-visa-partnerships-and-overcoming-underbanked-challenges-in-crypto-empire/
