Building Crypto, Tokenization, & Stablecoin Infrastructure for Big Institutions! | Edward Woodford

WEBVTT
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In the same way that you have to program agents
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or program humanoids to do certain things, you can create
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those same controls with money. All values come in on-chain,
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and agents are bringing a new stakeholder in the way
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that value is transferred globally. There will be different modalities
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of transfer of money for different reasons and different instances.
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I think 100% stablecoins and on-chain money in blockchain take
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a meaningful share of today's rails. But to get there,
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you need to abstract away technical complexity, you need to
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abstract away the compliance frictions of.
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The This episode is brought to you by FortisX. Guys,
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out FortisX.com Go to fortisx.fi slash x slash Thinking Crypto.
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Link will be in the description. Hey folks, welcome into
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the Thinking Crypto podcast. I'm your host, Tony Edward. And
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joining me today is Edward Woodford, who is the founder
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and CEO of ZeroHash, which is a leading infrastructure provider
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for crypto, stablecoin, and tokenized assets. Edward, it's great to
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have you.
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Yeah, thank you.
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Edward, I'm really excited to dive into ZeroHash and what
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you guys are building today. I've covered Zero Hash in
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the news updates over the years. But let's kick it
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off with your background. Where are you from? What's your
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professional background? And, you know, how'd you make your way
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into crypto?
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Yeah, so you've already guessed from my accent, grew up
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in the UK, came to grad school to MIT. And
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then stayed. And this is my second startup. First one
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was in the alternative markets and commodity space. So I've
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always been drawn to markets where I felt that there
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was going to be a domino falling in our favor.
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And at some points in this journey with on-chain finance,
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sometimes it's felt the domino was going to fall back
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on top of us as opposed to in our favor
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moving forward. But that's kind of my journey. And so
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I founded Zerohash in 2017. And it's been a great journey.
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And I still think we're still super early in terms
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of what we can achieve.
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Now, at your time at MIT, I remember reading over
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the years that MIT had a Bitcoin club and they
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were doing some things with crypto. Were you part of
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any of that?
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Yeah. So that's where I got exposed to Bitcoin for
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the first time. And so... I had a professor called
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Christian Catalini, who actually still is very much in the space.
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And he started a program where actually every MIT undergraduate
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actually received a Bitcoin as part of the experiment. But
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I first went deep with Christian as part of one
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of his classes. And I bought my first Bitcoin at
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the MIT bookstore with cash. And that was kind of
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my first foray into Bitcoin, did a project as well
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with a Bitcoin company, and just became fascinated with what
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I ultimately felt was a technology that would rewire how
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value was transferred. Didn't do that immediately, obviously traded, invested personally,
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but decided to take the leap into doing this full
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time from a career perspective in 2017. But yes, MIT
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has a very active Bitcoin community. Still does. I've spoken
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at MIT a number of times since I've left. And again,
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I think that's because fundamentally it is a technology that
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of course is an asset that natively creates the decentralized
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economic incentive. But ultimately it's that technology which MIT is
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obviously known for. So yeah, I owe it to Christian
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and a bunch of other people that lived and breathed
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this well before I did.
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That's an incredible story. And Edward, isn't it amazing that
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out of Bitcoin came this incredible blockchain technology and it's
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being used in many different applications and use cases and
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seems like it's going to power the way we do
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transactions and move payments and trust each other because it's
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all on-chain, as they would say.
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Yeah. Our thesis is that all value eventually moves on-chain.
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We started to see that, obviously, with different modalities of money,
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such as stablecoins. We're now starting to see that with
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people have turned real world assets or, for example, tokenized securities,
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tokenized collateral. I was just at Cybos this week, which
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is the largest aggregation of banks globally. There, the big
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focus is bringing money and bringing capital markets on chain.
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And so, yes, fundamentally, it is that kind of the
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way I view it. It's a horizontal technology and different
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assets and instruments will come on chain.
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Circling back to MIT, you were part of the robotics club.
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And we have this convergence of all these technologies, AI, robotics, blockchain,
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and more. Do you eventually see humanoid robots, once they're
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in the commercial aspect of the market and everybody can
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bring one into their homes and things like that, that
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they may have built-in crypto wallets and they may use
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stable coins along with AI agents, that that's what's going
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to power a lot of these commerce around these things?
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Fundamentally, yes. I think when people talk about the value
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of blockchains, and often people talk about the power of
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blockchains related to money, the big value proposition of it
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is global instant low cost. But one area where I
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think we're still very early in terms of the wider
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adoption is programmability, making money like software. And in the
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same way that you have to program agents or program
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humanoids to do certain things, you can create those same
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controls with money. And so I think fundamentally, all value
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is coming on chain and agents are bringing a new
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stakeholder in the way that value is transferred globally. And
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you are able to program money, which is critical for agents.
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I also believe in a world where agents are learning
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from other creators or even other agents. And that is
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going to be a global fragmented world. And I think
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that is where a decentralized technology makes a lot of sense.
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When you think about agents, I think there's a world
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that looks a lot more like how Cloudflare is thinking
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about the world, which is a more missioned metering of
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effectively value transfer globally. And I would put that akin
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to effectively the Spotify model in music, much more centralized.
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But I actually think because blockchain exists, you can actually
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create a much more decentralized mechanism, a model that doesn't
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require intermediaries to allow for agents to communicate and pay
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with creators and other agents for access and information. And
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that is what particularly excites me in terms of how
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blockchains can be applied to the agentic space. It's less
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about a consumer experience, which is certainly one that I
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think can be valuable, but it is much more about
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the programmability of an agent-to-agent or agent-to-creator kind of communication method.
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And we believe in that world as opposed to the
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Cloudflare world.
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Pardon the interruption. Hi, I'm Tony. I'm the host of
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the Thinking Crypto podcast. I wanted to ask you if
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you can please support the podcast by hitting the like button,
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subscribing if you haven't as yet. You can leave a
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comment below as well. And if you're listening on a
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podcast platform such as Spotify, Apple, or wherever you get
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your podcasts, please be sure to follow and hit the
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five-star rating. I'll let you get back to the content.
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Thank you so much. And in addition to what you
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just said, could the blockchain tech also be used to
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secure these humanoid robots and secure these AI agents? to
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prevent them from being hacked so that your neighbor can't
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hack your humanoid robot to go do something nefarious.
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I think that's one part of it. I think the
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other part of it is putting in control. So the
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beauty of, you know, MPC technology in particular is that
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you can effectively, you could give different authentications that are
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embedded into the mechanism by which money is moved. So
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making sure that certain controls are cryptographically embedded in the
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wallet that the agent has access over. So I may say, agent,
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you can spend 50 bucks, no problem. But above 50 bucks, cryptographically,
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you cannot do that. And I think that is a
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critical piece is around, there's a lot of concern, whether
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it be humanoids or AI around control. And that is
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where the technology can actually be applied in a way
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that creates a fundamental control plane for people. And again,
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the experience needs to be completely abstracted away, but from
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a cryptographic mechanism, It is a very unique way to
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do this and embedding that programmably in the way that
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agents spend money is I think going to be particularly important.
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Oh, absolutely. And isn't it interesting, Edward, that we're seeing
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the convergence of all these technologies, kind of, you know,
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things we may have seen in movies or read in books, right?
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And you have, as mentioned, the robotics, the AI, and
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the blockchain tech. And it's almost setting us up to
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go into this new economy, a new frontier, because, for example,
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you see what Elon and these folks are doing, trying
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to potentially colonize the moon and Mars. I can't imagine
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that we're going to send humans first. We're going to
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send humanoid robots. You're going to have AI technology helping
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us to do things. And if there's a need to
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move data and do commerce, well, you can't use credit
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card necessarily. It's going to have to be blockchain tech, right?
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Stable coins and things like that.
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Yeah, look, I think one of the values of blockchains
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is this network of networks that can exist in a
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global manner, effectively a globalist way of moving money. And
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the way I think about it is, look, content and
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information now is borderless. You're bringing that same power to
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money and value. And global value transfer could almost be
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an interplanetary way of moving money. And obviously that's a
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little bit out there, but it's not something that is
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too far away. And so, yes, there is this convergence
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of technologies that are coming together. I think obviously when
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people think about blockchains and AI, there is clearly to
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some degree people jumping on the AI bandwagon. I actually
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think there's a real fundamental reason why AI can be
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accelerated through blockchains and why blockchains can be accelerated through AI.
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And so it's a reinforcing loop is kind of how
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I view that world.
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Yeah, they do complement each other very well in many
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different ways. I've been noodling a lot about that and
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looking at how there's the cross-pollination and how they can
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work together. It's really fascinating. Give us an overview of ZeroHash.
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What made you want to start ZeroHash? What do you
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guys do? What's the mission?
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Yeah, so... We provide on-chain infrastructure for partners, and we
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abstract away the technical complexity as well as the regulatory
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and compliance technology, the compliance lift for partners. And we
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now power some of the leading banks, including Morgan Stanley,
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leading brokerage platforms like Interactive Brokers, leading prediction markets like Kaoshi,
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leading on-chain money companies, Providers such as Biddle, we provide
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stable coin rails into Biddle. We work with the leading
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networks like Visa to do global payouts. We work with
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the leading PSPs like WorldPay and Stripe. And the commonality
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of all of that is that we believe value is
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coming on chain in different forms. And it's the same
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problem set, which is how do you build secure, scalable,
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and trusted technology? And how do you build scalable, trusted
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compliance and regulatory frameworks? And you abstract away that complexity.
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So that's what we do at scale now in a
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global fashion with some of the leading partners and platforms.
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And partners integrate into our APIs and increase now through
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MCPs to access our infrastructure to build quickly. And so
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the driver for this, I mentioned my previous business was
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a regulated business, and it took us two years to
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get to the start line. And then we got to
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the start line and we said, wow, probably not that
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great a business. And so there's this mindset in startups
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to fail fast. When you're operating very complex technology and
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regulatory spaces, it's nearly impossible to fail fast. And it's hard, actually,
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to innovate fast. And so we provide the infrastructure to
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allow businesses to scale quickly. I just did an interview
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this week where I was interviewing someone, and it's Manuel,
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the founder of Felix Pago. And I met him a
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couple of years ago, and just to see their trajectory, right,
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they just raised $ 200 million from Andreessen. And we allowed
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Felix to scale more easily and to focus on their
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differentiation and to focus on their product. Equally, we've allowed
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very large complex G-sits to go live in under six months,
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such as Morgan Stanley. And so we allow partners to
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do things that they otherwise cannot on timelines that are
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incredibly aggressive. whilst also not creating a zero-sum trade-off between
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trust and innovation. We allow partners to innovate in a
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trusted way, and that is very, very important when you're
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servicing some of the largest institutions in the world.
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You mentioned Morgan Stanley and these institutions that are coming
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to you for these services. What are they most interested
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in right now? Is it stable coins, tokenizing assets, or
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all of the above?
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It's all of the above. I think it's a sequencing question.
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So I think Increasingly, people have realized that this is
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a technology that can rewire the way the value is transferred.
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And different banks and different FIs will take different views
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on the sequencing because it's hard to do five things
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at once. And so I'll give you a real example.
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And Morgan Stanley has spoken about this publicly. They've launched
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a trading application in partnership with ZeroHash that gives partners,
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at least initially today, access to Bitcoin, Ethereum, and Solana.
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And that same wallet infrastructure that we power for them
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to allow partners to invest in Solana can also be
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leveraged and extended to any tokenized assets. And they've spoken
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about this publicly. So it's about viewing these things not
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as separate and distinct. I view these as more a
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sequencing event that is increasingly becoming clear. But right now,
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especially in the bank side, the two core drivers are
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wealth and security. um, tokenized deposits and their intersection and
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interplay with, with, with other modalities of stoke of money,
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which includes stable coins.
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So with the rise of stable coins and these banks
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looking to possibly launch their own or integrate the existing
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stable coins out there, what happens to the traditional payment rails,
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such as ACH wires and Swift? Is it, they simply
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upgrade or some of them go by the wayside?
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So they still exist. Um, Business is around interoperability. That
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is what we do. And so in the same way
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that communications, there's different modalities of communication. There'll be different
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modalities of transfer of money for different reasons and different instances.
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I think 100% stable coins and on-chain money in blockchain
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take a meaningful share of today's rails. But to get there,
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you need to abstract away technical complexity. You need to
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abstract away the compliance friction that we've spoken about. as
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well as provide interoperability because payments is ultimately a two-sided marketplace.
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You are sending from part A to part B. And
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so interoperability needs to exist, which we provide between, for example,
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traditional dollars and stable coins. You also need to provide
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interoperability because the space has become fragmented from a technological
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perspective between different chains. So the same asset on the
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same chain, so USDC on Ethereum to USDC on Solana.
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And equally, you need to provide interoperability between different assets
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in the same asset class. So meaning, for example, different
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forms of stable coins. So OUSD to USCC. So the
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goal here is that on-chain is the technology. There's going
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to be different chains and different assets. But those need
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to be abstracted away by how things work. So in part,
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the reason why people are paid either on every two
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weeks or every month is because of the cost, the
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complexity of moving money. And that creates this construct where
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there are ways to solve that through, for example, payday
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lending and other constructs. My point is, if you can
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make money cheap, instant, and programmable, You can change that
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paradigm that it's less of a batch process to more
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of a streaming mechanism or a more frequent mechanism to
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move in money, which brings real value to a lot
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of people. 70% of America cannot deal with $ 1, 000 shot
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to the system. And people forget that. On a global scale,
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that is true as well. And so look, we have
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people across the world. And without stable coins, if you
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just use traditional rails, we pay people every two weeks.
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And then there's a five to 10 day delay on
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those people getting the money. Right. That is a paradigm
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that can be broken with this technology. Same thing with
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the way that global money is moved. Huge amounts of
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money are locked up. So I'll give you one example
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of one of our clients, Gusto. They have 500,000 SMBs globally.
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The biggest cost to these SMBs is people. If you're
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a Brazilian company looking to pay a freelancer in the Philippines,
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you have to lock up a huge amount of money
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to pre-fund the accounts, move money early because of the
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frictions of moving the money. That brings more value, allowing
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people to invest more in their business. Same thing with
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our partnership with Visa. Partners having to pre-fund global amounts.
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If you look at the capital market space, there's over
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$ 1 trillion locked up in effectively pre-funding through margin account.
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And that's because these concepts are created because of the
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inability to move money 24-7, 365, globally, instantly, programmably. And
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so imagine if $ 1 trillion of the capital markets could
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be freed up. And we've seen this. So this is
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what the velocity of money matters. This is why it matters.
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It's because it allows for innovation. It allows for investment.
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And it allows, frankly, for people to get their money quicker,
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allowing them to then reinvest that in the economy or
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not have to do things they do today. such as
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taking high rate interest rates, high rate loans. Bringing that
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down to the personal level as to why velocity of
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money matters, I think is critically, critically important.
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That's going to be game changing for businesses, but also,
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like you mentioned, individuals across the globe. Typically here in
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the United States, we have it kind of easy. We
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have the most modern technology and things like that. But
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there's a lot of people around the world who don't
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have access to proper financial services or banking services. I mean,
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that could be life-changing for them.
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This is something that you mentioned AI and robotics. And
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having seen the work that AI has done in terms
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of explaining the value of this technology, despite pretty material
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fears about the technology, this space needs to do the same.
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and bringing it back to the personal stories or making
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it more tangible, less about the technology, more about the utility,
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that is really, really important.
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I know there's usually what I like to call the
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dial-up phase of technology adoption, right? The S-curve adoption. And
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it feels like we're still in that early 90s, AOL, dial-up,
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clunky phase you know, it works, but it's not fully
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there for mass adoption. It's not broadband.
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It's not 5G.
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It's not my mobile phone. It's not my laptop that
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I can easily take anywhere. How far away are we
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from that moment where the UX and the onboarding is
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very easy for the masses? Are we five, 10 years away?
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Way closer. So I'll tell you where I think we
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are in this journey. So you mentioned other forms of technology,
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and I think we can look at those. It's a
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great paradigm. So firstly, You need technical distribution, right? You
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need to create a mesh network for different technologies. And
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that exists today. We project that there's about 2.5 billion
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on-chain accounts enabled through existing financial partners. So, for example,
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if you have a Revolut account, a Robinhood account, a
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Cash App account, a Gcash account, a Nubek account, you
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now have access to this technology. So we have distribution.
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We have sufficient regulatory clarity, which is also very important
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for technical evolution. And then equally, you mentioned these different
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forms of technology. If you look at every form of technology,
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interoperability is critical. So just one example, when text message started,
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you could only text message people on the same network
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as you. So Verizon to Verizon, as opposed to Verizon
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to AT & T. And we saw that interoperability question.
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So that's where we are on the journey. You're absolutely
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right that this is largely an unusable technology for most
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people in the world. This space is growing. So what
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does that say? It shows that this space is incredibly
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valuable from a utility perspective, and imagine what could be
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solved through usability. And so one of the products that
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we've launched is a product called Orth, which brings an
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open finance experience, an account-to-account link, making it truly usable
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for people. And people often say, well, this technology becomes
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usable when my grandma can use it. This is what
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Orth does. It abstracts away the complexity of needing to
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copy alphanumeric addresses, making chain decisions, and simply making it
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a value transfer. And we're very, very excited to keep
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investing in that product. And I think all these areas
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are going to grow together. So I really think we're
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at this point now where we have a lot of
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the building blocks needed. And we're now at the kind
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of the application layer. You're going to see this explosion
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in utility in the same way that once you had
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those right building blocks from distribution from the iPhone, you
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then saw this explosion on the app store. I think
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that's where we are on the journey.
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Yeah, it's exciting to be in these different phases, to
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be this early, to go through, you know, the scrappy
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days of trying to figure it all out. But eventually,
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like to your point, it's going to get there for
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mainstream adoption. And I'm assuming the majority of people won't
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even know necessarily that there's stablecoins or blockchain tech running
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behind the scenes, just that it works really well and
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it works better and it offers a greater benefit to them.
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That's exactly where we are very, very close to going.
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Yeah. I did want to ask you about Wyoming issuing
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their state stablecoin, which is pretty profound. And they did
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it on the zero hash stack. Tell us about that.
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And are other states approaching you to do something similar? Yeah,
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so we work with Wyoming to support the Wyoming stablecoin.
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And so we are an active distribution partner for players.
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We are this critical infrastructure across payments, banks, FIs, merchants. Look,
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it goes back to this point of the different modalities
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of money. So the way I break down the space
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is that there's stable coins and there's on-chain deposits.
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These two things are different modalities of ultimately dollars. But
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one is defined under the Genius Act and one is
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effectively just a new rail for fractional reserve banking. And
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then within that, you then have different issuers of those assets.
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I do think states are one player. Obviously, right now
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in the US, a central bank dollar is not going
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to exist. That may change. It's certainly not the case
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in other parts of the world. So again, I just
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view this as different modalities of money for different drivers,
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for different rationales. And it just reinforces the value proposition
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of zero hash around technical abstraction, compliance and trust, and interoperability.
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Talk to us a bit about your security layers, because
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you're working with states, governments, massive institutions like Morgan Stanley
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and the others you mentioned. How are you, what are
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the security layers, you know, for custody and all these
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different things? Because I'm sure, you know, these folks have
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those same questions. They come to you and they say, hey,
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we want to do this. but what are your security layers? Yeah, look,
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it's a complex question, but I'll just give you one example.
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And this is applying AI to increase the security of
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your posture.
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So Mythos has obviously changed the game. AI has obviously
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changed the game in terms of cybersecurity. And it's changed
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the concept of patching. It's changed the concept of Even
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the way that you think about how you categorize vulnerabilities,
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because of the ability for agents to more effectively link vulnerabilities,
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that series of low-risk items that were previously categorized as
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low could be linked to create a material risk. Historically,
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the way that cyber worked was, what is the probability
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and what is And this changes the construct as opposed
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to treating these things as distinct, you're treating them more
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as linked structures. So one of the things that we've
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done is we've worked with our banking partners that have
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access to Mythos to review everything. But it's not about
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time and point. That is what has fundamentally shifted and
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I think is often overlooked in the discussion. And so
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one of the things that we've been able to do
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is to actually change our software development lifecycle. That every
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deployment in our software development lifecycle process runs through an
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agentic screen. And so the way that things used to
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work was you run a vulnerability assessment once a week,
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once a month, once a day. You have an external
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pen test once a month, once a quarter, once every
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six months. That's changed. And we are incredibly proud of
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that process to now be able to say that we
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run our entire code base on every single deployment through
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effectively our own internal agent. to ensure that you are
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deploying it in a very secure manner. And that's what's
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fundamentally shifted. And of course, a business like ours, our
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largest cyber threats are state actors, right? Yeah. And explaining
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that to partners, explaining how you use AI as a
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defensive mechanism against the tools that adversaries have is very,
474
00:28:35.690 --> 00:28:40.140
very important. And that's one element of our cyber program
475
00:28:40.420 --> 00:28:44.539
that I think is relevant, new, and frankly, something that
476
00:28:44.559 --> 00:28:45.460
we're particularly proud of.
477
00:28:46.680 --> 00:28:49.210
Yeah, it's pretty incredible that you can have that internal
478
00:28:49.369 --> 00:28:55.369
AI agent or agents constantly running these checks. It's game-changing
479
00:28:55.450 --> 00:28:59.930
versus the employee, so to speak. And I've been an
480
00:29:00.009 --> 00:29:02.559
employee before where I get tired, I have to go
481
00:29:02.599 --> 00:29:05.259
to the bathroom, I have to eat, I have to sleep, right?
482
00:29:06.250 --> 00:29:09.650
you can have that constant check in place, which is game-changing.
483
00:29:09.690 --> 00:29:12.730
It's going to change a lot of industries, of course,
484
00:29:12.789 --> 00:29:13.490
not just crypto.
485
00:29:13.509 --> 00:29:17.289
Yeah, 100%. It changes the game from a cyber perspective.
486
00:29:17.710 --> 00:29:20.150
Along those lines of security, just a question that popped
487
00:29:20.190 --> 00:29:21.769
in my mind, because we've been seeing a lot of
488
00:29:21.809 --> 00:29:25.349
data breaches across all industries. It seems to be a
489
00:29:25.710 --> 00:29:29.880
problem that we cannot stop. And SEC Commissioner Hester Peirce,
490
00:29:29.900 --> 00:29:33.859
I think, this week talked about KYC, AML, and we
491
00:29:33.900 --> 00:29:37.150
need to put the data on chain and have ZK technology.
492
00:29:37.769 --> 00:29:41.640
Is that something you're looking into helping your clients do
493
00:29:41.700 --> 00:29:45.220
as well? And eventually, overall, we have all these industries
494
00:29:45.259 --> 00:29:46.279
putting data on chain?
495
00:29:47.240 --> 00:29:52.799
Yeah, look, I think the concept of identity can be
496
00:29:52.900 --> 00:29:57.309
accelerated and that the effective controls around identity can be
497
00:29:57.329 --> 00:30:01.410
accelerated through blockchains. And just to bring that As an example, look,
498
00:30:01.470 --> 00:30:05.549
I'm looking to buy liquor. Right now, the way that
499
00:30:05.609 --> 00:30:09.099
it works, if I do a DoorDash or Uber delivery,
500
00:30:09.880 --> 00:30:12.430
they're taking a picture of my ID, they're storing it,
501
00:30:13.279 --> 00:30:18.099
and your ID is now in hundreds of places. Wouldn't
502
00:30:18.140 --> 00:30:20.519
a much better mechanism be that I simply need to
503
00:30:20.559 --> 00:30:23.690
share the credential and simply the only thing that needs
504
00:30:23.710 --> 00:30:26.049
to be shared with Uber or DoorDash is my age?
505
00:30:26.670 --> 00:30:29.640
That's it. They don't need my ID number. They don't
506
00:30:29.700 --> 00:30:33.160
need a picture. They don't need my address. And so
507
00:30:34.039 --> 00:30:37.220
that is the beauty of what blockchain can offer. We're
508
00:30:37.259 --> 00:30:39.369
working with a number of consortiums. I think when you
509
00:30:39.380 --> 00:30:41.220
look at the AI space as well, you need the
510
00:30:41.240 --> 00:30:45.069
ability to identity to flow down to agents, effectively no agents.
511
00:30:45.089 --> 00:30:46.990
There's a lot of innovation that can happen. And again,
512
00:30:47.430 --> 00:30:52.750
blockchains can accelerate that in particular. But look, I think
513
00:30:52.789 --> 00:30:55.609
when you talk to most people that deal with identity,
514
00:30:56.029 --> 00:30:59.289
when you talk to governmental agencies, So much of this
515
00:30:59.369 --> 00:31:03.410
is leaked and there is this fundamental break. And then
516
00:31:03.529 --> 00:31:06.450
how do you create a more secure mechanism, a more
517
00:31:06.490 --> 00:31:10.410
controlled mechanism, a more trusted mechanism around identity that is
518
00:31:10.450 --> 00:31:14.380
more effective in a world where identity ultimately is necessary
519
00:31:14.779 --> 00:31:17.299
and is only going to accelerate in terms of importance.
520
00:31:18.099 --> 00:31:20.859
So we don't have necessarily all the solutions. I'm simply
521
00:31:20.900 --> 00:31:22.779
laying out kind of how we think about this and
522
00:31:22.799 --> 00:31:25.119
how blockchain can plug in very, very effectively.
523
00:31:25.799 --> 00:31:31.440
So Edward, this week, OpenUSD, OUSD, the new consortium stablecoin
524
00:31:31.460 --> 00:31:36.380
was launched. ZeroHash is part of that consortium. You're seeing
525
00:31:36.440 --> 00:31:39.069
big names who are part of this group like Visa,
526
00:31:39.109 --> 00:31:42.410
MasterCard and other big companies. What are your thoughts or
527
00:31:43.130 --> 00:31:47.029
outlook on these consortium stablecoins? Could they have a significant
528
00:31:47.069 --> 00:31:50.200
advantage in the future because they have the distribution with
529
00:31:50.259 --> 00:31:51.680
all these big companies involved?
530
00:31:52.880 --> 00:31:54.819
Yeah, look, again, it goes back to this point of
531
00:31:55.019 --> 00:31:58.200
different modalities of money and different forms of money. So
532
00:31:58.279 --> 00:32:03.660
OUSD is a stable coin defined under Genius. And it's
533
00:32:03.680 --> 00:32:09.140
obviously exciting. And look, we support close to 20 different
534
00:32:09.200 --> 00:32:17.279
stable coins now across 25 different blockchains. And providing that
535
00:32:17.319 --> 00:32:23.079
technical abstraction, trust, compliance, and interoperability is absolutely critical. And so... Look,
536
00:32:23.099 --> 00:32:25.440
what I think is really interesting about the OUSD framework
537
00:32:26.359 --> 00:32:32.240
is incentives are flowed down. And the metrics for success,
538
00:32:32.299 --> 00:32:35.170
I think, will differ historically to the way that economics
539
00:32:35.589 --> 00:32:38.890
are focused today for stablecoin issuers. Today, stablecoin issuers is
540
00:32:38.970 --> 00:32:42.150
largely an AUC game because you make most of the
541
00:32:42.190 --> 00:32:45.730
money on interest. This changes the paradigm, which I think
542
00:32:45.769 --> 00:32:48.130
it makes it more in terms of a total process
543
00:32:48.170 --> 00:32:50.880
volume incentive structure. and the way that that kind of
544
00:32:51.019 --> 00:32:54.000
is effectively flowed down in different ways. So I think
545
00:32:54.059 --> 00:32:57.109
it's incredibly good for the space. Obviously, the backers of
546
00:32:57.210 --> 00:33:00.190
it makes a very clear statement. This is an endorsement
547
00:33:00.230 --> 00:33:03.069
of the technology. And look, our goal is to make
548
00:33:03.150 --> 00:33:06.890
it exist side by side as easily, transferable, extract away
549
00:33:06.910 --> 00:33:09.829
the complexity that we do today for a whole host
550
00:33:09.869 --> 00:33:12.589
of different stablecoins, making it easy to go from USDC
551
00:33:12.750 --> 00:33:17.740
to OUSD, USDT to OUSD, OUSD to tokenized funds such
552
00:33:17.779 --> 00:33:20.539
as Biddle, all of that. driving that forward.
553
00:33:21.059 --> 00:33:24.940
You mentioned the tokenized fund Biddle, BlackRock's tokenized money market fund,
554
00:33:24.980 --> 00:33:30.539
of course. Do you see stablecoins being the default form
555
00:33:30.559 --> 00:33:33.269
of payment for how those may be settled or the
556
00:33:33.329 --> 00:33:36.589
yield may be payout because of the 24-7 nature?
557
00:33:37.410 --> 00:33:41.130
Yeah, so we have a partnership today with Biddle where
558
00:33:41.250 --> 00:33:44.890
you can access Biddle 24-7, 365 and go instantly from
559
00:33:44.930 --> 00:33:49.539
stablecoins into Biddle. And Zerohash does that conversion from stable
560
00:33:49.599 --> 00:33:54.589
coins in and out of the BlackRock fund. And so again,
561
00:33:54.609 --> 00:33:57.470
I think people sometimes question, why do you need all
562
00:33:57.490 --> 00:34:00.269
these different modalities of money? The reason is, is because
563
00:34:00.410 --> 00:34:02.890
right now they differ. So Biddle can be yield-bearing, stable
564
00:34:02.910 --> 00:34:07.710
coins cannot. Biddle has more restrictions in terms of portability globally,
565
00:34:07.880 --> 00:34:11.219
stable coins do not. Just at a very fundamental level.
566
00:34:11.340 --> 00:34:14.300
And so the importance of moving between these two instruments
567
00:34:14.860 --> 00:34:17.159
is very, very important and doing that instantly globally 24-7
568
00:34:18.360 --> 00:34:19.400
is very, very important.
569
00:34:21.099 --> 00:34:23.619
So, Edward, we're seeing a lot of assets go on-chain.
570
00:34:23.980 --> 00:34:27.559
You have stocks being tokenized, money market funds, yield-bearing products,
571
00:34:28.500 --> 00:34:32.760
gold as well. You know, by 2030, do you think
572
00:34:32.800 --> 00:34:37.500
we might see 10%, 15%, 20% of all assets on-chain?
573
00:34:37.760 --> 00:34:41.420
Or maybe not. It may not move as fast. Maybe
574
00:34:41.619 --> 00:34:42.820
by 2035, we might see 20% or so.
575
00:34:46.510 --> 00:34:47.989
I mean, the short answer is yes, and I think
576
00:34:48.010 --> 00:34:51.050
it's happening quickly. I think it's happening at different paces
577
00:34:51.130 --> 00:34:55.070
based on the asset and based on the use case. Look,
578
00:34:55.429 --> 00:34:59.019
money is clearly coming on-chain. That's been accelerated by, for example,
579
00:34:59.059 --> 00:35:02.699
the banks launching tokenized deposits and different forms of on-chain money,
580
00:35:02.739 --> 00:35:05.619
such as JP Morgan. And I think the utility is
581
00:35:05.699 --> 00:35:11.079
going to be very accelerated through... collateral mechanisms, again, being
582
00:35:11.119 --> 00:35:15.679
driven by some of the macro drivers, such as T0 settlement, tokenization,
583
00:35:15.760 --> 00:35:18.380
prediction markets, all that require velocity of money to be
584
00:35:19.440 --> 00:35:21.039
more top of mind in terms of the way that
585
00:35:21.059 --> 00:35:26.329
we think about money. Obviously, we're seeing a huge amount
586
00:35:26.349 --> 00:35:30.789
of innovation on the stock and equity side with NYSE, NASDAQ, DTCC,
587
00:35:31.010 --> 00:35:34.829
all accelerating that. And so I think it's going to
588
00:35:34.849 --> 00:35:37.880
be asset contingent. But yes, we're bullish on the timeline.
589
00:35:38.280 --> 00:35:42.010
We're bullish in terms of how quickly this happens and
590
00:35:42.050 --> 00:35:43.429
the role that Zerohash starts to play.
591
00:35:44.360 --> 00:35:47.639
Yeah, it's really, really exciting. And I'm very curious to
592
00:35:47.699 --> 00:35:51.400
see what the next major asset class may be. Personally,
593
00:35:51.420 --> 00:35:54.980
I'm looking at if we get real estate on chain,
594
00:35:55.539 --> 00:36:00.139
I would definitely look to invest because I am diversified
595
00:36:00.219 --> 00:36:02.869
in my own personal portfolio, of course. And if I
596
00:36:02.889 --> 00:36:06.309
could get a token ownership of the Empire State Building
597
00:36:06.349 --> 00:36:09.519
or something along those lines, That'll be really fascinating. And
598
00:36:09.559 --> 00:36:11.420
I can hold that and put it to work and
599
00:36:11.440 --> 00:36:13.179
also hand it down to my daughter.
600
00:36:12.920 --> 00:36:15.739
If I want. Yeah.
601
00:36:16.159 --> 00:36:18.980
It'd be such a fascinating thing. So, Edward, what's on
602
00:36:19.000 --> 00:36:22.079
your roadmap that you can share? Yeah, look, it's an
603
00:36:22.139 --> 00:36:25.670
acceleration of the vision. And so it's doubling down on
604
00:36:25.889 --> 00:36:31.130
usability of all on-chain finance. It's continuing to extend our
605
00:36:31.150 --> 00:36:34.840
technology stack to more and more asset classes. The core
606
00:36:34.860 --> 00:36:37.119
technology is the same, but there are these slightly different
607
00:36:37.159 --> 00:36:40.690
building blocks that have to go into supporting different forms
608
00:36:40.710 --> 00:36:42.670
of on-chain assets, of course.
609
00:36:43.829 --> 00:36:47.269
And so that's the core vision. It's continuing to focus
610
00:36:47.449 --> 00:36:53.010
on this usability and friction that still exists with on-chain
611
00:36:54.090 --> 00:36:55.639
and solving those problems.
612
00:36:56.579 --> 00:36:58.699
I did want to ask you about some of the
613
00:36:59.519 --> 00:37:03.059
regulatory aspects of what's happening in the markets. Obviously, the
614
00:37:03.079 --> 00:37:05.480
Clarity Act did not pass. We were hoping it would.
615
00:37:05.840 --> 00:37:08.659
But the regulatory agencies such as the SEC and CFTC
616
00:37:08.679 --> 00:37:12.610
have been providing guidance. The SEC, I think, doing a lot,
617
00:37:13.119 --> 00:37:15.030
which applies to what you guys are doing, like the
618
00:37:15.110 --> 00:37:19.050
tokenization exemption. They just provide the custody rules yesterday. And
619
00:37:19.070 --> 00:37:24.369
then the regulation crypto on token issuance. What are your thoughts?
620
00:37:24.389 --> 00:37:27.030
Do you think these are sufficient enough for institutions like
621
00:37:27.050 --> 00:37:29.360
the Morgan Stanley's to say, okay, we didn't have the
622
00:37:29.400 --> 00:37:31.840
Clarity Act, but we got the agencies giving us the guidance,
623
00:37:31.900 --> 00:37:32.920
we can go ahead and build.
624
00:37:33.800 --> 00:37:38.039
Yeah. So, look, there's been a lot of movements and
625
00:37:38.059 --> 00:37:42.059
a lot of shifts. And obviously, we've seen a number
626
00:37:42.079 --> 00:37:44.960
of partners be announced in the banking space, the FI space.
627
00:37:44.980 --> 00:37:47.260
You know, we have a number of partnerships that will
628
00:37:47.280 --> 00:37:53.000
be announcing with other very large G-SIBs over the coming months. Look,
629
00:37:53.059 --> 00:37:58.079
I think related to Clarity in particular, I think in
630
00:37:58.119 --> 00:38:01.760
some ways it's helpful that the conversation, you know, people
631
00:38:01.780 --> 00:38:05.219
can make decisions now with the structure that exists. And
632
00:38:05.260 --> 00:38:08.239
I think this, it's coming, it's coming, it's coming. I
633
00:38:09.079 --> 00:38:12.730
think created almost a wait and see approach from certain players.
634
00:38:13.829 --> 00:38:16.329
Now people are able to make decisions. Now that may
635
00:38:16.369 --> 00:38:18.610
be enough for some, it may not be enough for others.
636
00:38:19.750 --> 00:38:23.860
I personally believe we have sufficient regulatory clarity. across a
637
00:38:23.920 --> 00:38:26.820
number of areas that has been provided in different forms,
638
00:38:26.880 --> 00:38:35.849
including legislative ways through genius, through, uh, rulemaking, uh, through letters,
639
00:38:36.389 --> 00:38:40.389
through opinions. So I think there's sufficient clarity for an
640
00:38:40.429 --> 00:38:43.110
acceleration of the space. And we're certainly starting to see that.
641
00:38:44.269 --> 00:38:46.909
Yeah, it's, it, it definitely feels that way. Uh, it
642
00:38:46.929 --> 00:38:49.630
seems like things are not slowing down despite that clarity act,
643
00:38:49.670 --> 00:38:53.690
not passing. And I think eventually it will, um, But people,
644
00:38:53.710 --> 00:38:55.929
I mean, to your point, we're seeing the announcements, right?
645
00:38:55.949 --> 00:38:58.309
Folks are building and it's happening across the globe. It's
646
00:38:58.329 --> 00:39:01.679
just really, really great to see all that. Edward, I
647
00:39:01.699 --> 00:39:05.000
got some wrap-up questions here for you. First, are you
648
00:39:05.039 --> 00:39:06.340
an early bird or night owl?
649
00:39:07.219 --> 00:39:07.639
Early bird.
650
00:39:08.440 --> 00:39:10.000
Do you prefer window, seat, or aisle?
651
00:39:10.900 --> 00:39:11.179
Window.
652
00:39:12.059 --> 00:39:13.920
Do you prefer text, email, or call?
653
00:39:15.420 --> 00:39:20.079
None of those. Slack or in-person. I'm a big Slack person.
654
00:39:20.690 --> 00:39:24.860
Oh, for sure. What's one company you admired outside of crypto?
655
00:39:25.900 --> 00:39:28.210
So with the caveat that I think all businesses are
656
00:39:28.250 --> 00:39:31.610
going to move on chain in some form, so that
657
00:39:31.639 --> 00:39:34.900
will increasingly become a harder question. A company that I
658
00:39:35.199 --> 00:39:39.579
really respect, I respect the founders, is Rampant.
659
00:39:40.400 --> 00:39:42.500
And if you could have dinner with any person living
660
00:39:42.579 --> 00:39:43.539
or dead, who would it be?
661
00:39:43.559 --> 00:39:47.769
I think one, I'm I've been fortunate enough to meet him,
662
00:39:47.849 --> 00:39:50.809
but I would spill off some more time, is Travis Kalanick.
663
00:39:51.469 --> 00:39:58.289
I think just having seen the ability to grow multiple
664
00:39:58.349 --> 00:40:03.050
businesses is just incredibly, incredibly impressive.
665
00:40:04.630 --> 00:40:06.469
Finally, best advice you've ever gotten?
666
00:40:08.630 --> 00:40:11.059
The best advice I think I got have been given
667
00:40:11.079 --> 00:40:13.590
that I maybe best in senses I lean on it
668
00:40:13.630 --> 00:40:15.690
the most or it's changed the way that I think
669
00:40:15.750 --> 00:40:20.989
about addressing sometimes challenges is somebody it's a Buddhist teaching
670
00:40:21.030 --> 00:40:24.929
actually that was repeated which is anger comes from frustration
671
00:40:24.949 --> 00:40:28.940
and frustration comes from fear and often in a startup
672
00:40:29.500 --> 00:40:34.340
you are frustrated and as opposed to just purely being
673
00:40:34.380 --> 00:40:37.619
frustrated I think sometimes a way to communicate that frustration
674
00:40:37.679 --> 00:40:39.219
it's more effective to say look this is what I'm
675
00:40:39.320 --> 00:40:42.940
fearful of I'm fearful of us not being able to
676
00:40:43.000 --> 00:40:46.090
grow as quickly as I would like to. I'm fearful
677
00:40:46.159 --> 00:40:52.110
what this means if we don't do X. And it's
678
00:40:52.130 --> 00:40:54.250
a way to be more vulnerable in leadership. And it's
679
00:40:54.269 --> 00:40:57.050
not about every single thing coming down to that paradigm
680
00:40:57.070 --> 00:41:00.449
and framework. But sometimes it's been very, very helpful when
681
00:41:00.489 --> 00:41:05.039
I see someone be frustrated at something. I say, okay,
682
00:41:05.059 --> 00:41:08.219
let's really unpack that. Or even for myself, as opposed
683
00:41:08.239 --> 00:41:10.179
to just coming into something and say, I'm really frustrated
684
00:41:10.219 --> 00:41:13.280
by this. you can say I'm frustrated, but it's because
685
00:41:13.380 --> 00:41:15.309
these three things I'm fearful of. And I think it
686
00:41:15.369 --> 00:41:20.130
helps unpack the problem more clearly, but also allows you
687
00:41:20.150 --> 00:41:23.090
to be more vulnerable and solve things more effectively. So
688
00:41:23.130 --> 00:41:24.670
for me, that's the piece of advice that I lean
689
00:41:24.710 --> 00:41:25.489
most back on.
690
00:41:26.659 --> 00:41:29.920
I love that, Edward. And I, on my own personal
691
00:41:30.139 --> 00:41:34.840
side of things, I've had that conversation with my therapist. No,
692
00:41:34.880 --> 00:41:37.539
but that can be applied in different parts of your life, right?
693
00:41:37.860 --> 00:41:39.539
Oh yeah, big time. I mean, like the best piece
694
00:41:39.559 --> 00:41:43.280
of advice, like, business and business is life like you
695
00:41:43.300 --> 00:41:45.300
know like this is where you this is what i
696
00:41:45.300 --> 00:41:48.389
spend most amount of my time doing and so yeah
697
00:41:48.409 --> 00:41:51.289
of course the life lessons you learn a lot about
698
00:41:51.309 --> 00:41:55.130
yourself doing a startup and all about life doing doing
699
00:41:55.150 --> 00:41:57.789
that and so obviously you apply life lessons to to
700
00:41:57.849 --> 00:41:58.730
business as well.
701
00:41:59.389 --> 00:42:03.449
Absolutely edward absolute pleasure we are going to do round
702
00:42:03.539 --> 00:42:06.239
two we're going to see each other potentially at ripple
703
00:42:06.300 --> 00:42:09.050
swell and we'll have another conversation I love what Zero
704
00:42:09.070 --> 00:42:11.070
Hash is doing. Thank you so much for taking the time.
705
00:42:11.489 --> 00:42:13.030
Yeah, thanks for having me and looking forward to it.
706
00:42:13.840 --> 00:42:16.340
Thank you so much for tuning in. Please hit the
707
00:42:16.380 --> 00:42:18.840
like button. Subscribe if you haven't as yet. If you're
708
00:42:18.860 --> 00:42:21.880
listening on a podcast platform such as Spotify or Apple,
709
00:42:22.139 --> 00:42:25.199
please follow and leave a five-star rating. Thank you so much.