[ { "start": 2.29, "speaker": "Manuel Klein", "text": "All right, it should record now on your top screen. Should be six, seven seconds, eight seconds.", "end": 6.984 }, { "start": 6.984, "speaker": "Stefan Grasmann", "text": "Yes. Yes.", "end": 10.78 }, { "start": 10.78, "speaker": "Manuel Klein", "text": "Good.", "end": 14.768 }, { "start": 14.768, "speaker": "Manuel Klein", "text": "Hello and welcome to another episode of the Bitcoin Fiat and Rock and Roll Postcast, our BFR podcast, where we dive deep into the intersection of traditional finance and blockchain technology and help you to understand the potential future of digital assets in Tretafi. And today is again a very interesting episode. We have a very interesting guest, who is we. It's again my former colleague or my colleague at the moment at this podcast, Stefan Krasman from Zühlke. Hi Stefan.", "end": 43.251 }, { "start": 43.251, "speaker": "Stefan Grasmann", "text": "Hi Manuel.", "end": 45.368 }, { "start": 45.368, "speaker": "Manuel Klein", "text": "And yeah, we would like to welcome a special guest, McLoughlin, who has a long payment background, but now runs or forms, Ubix, a stablecoin clearing network. So welcome, Tony, to this podcast.", "end": 60.814 }, { "start": 60.814, "speaker": "Tony Mclaughlin", "text": "Thank very much, it's great to be here with you guys.", "end": 64.71 }, { "start": 64.71, "speaker": "Manuel Klein", "text": "Yeah, we're looking forward to this. Yeah, hopefully not longer than an hour, but I'm quite sure this hour will be packed with interesting discussions on your background, on your payment journey. mean, as discussed already, I said, you've a long tradition in traditional payments, long history in traditional payments, but then focused on blockchain adoption and traditional finance. You are basically the father, the thought leader of the regulated liability network. Everything around tokenized deposits has a strong\nTony McLoughlin branding, would say. But then, yeah, that career shifted. Now you're really focusing on public permissionless infrastructure with stablecoins on blockchain. So it's hugely interesting. And we hope to dive a bit deeper into what that journey was, how it looked like and what you're now currently focusing on. But yeah, let's start maybe an intro. This should not be all. I think that listeners, many listeners might know you, but...\nPlease give us a short wrap up where you come from, what you focused on and how that journey first looked like when you discovered, I think five years ago or four years ago, and traditional finance.", "end": 135.372 }, { "start": 135.372, "speaker": "Tony Mclaughlin", "text": "Yeah, of course. Well, I've been working in payments now for over 30 years. My first job way back at the beginning was in travellers checks and that does have a connection to what we'll discuss on stable coins a little bit later on. But over the course of those years working for major banks, I've worked in every aspect of\npayments in traditional finance. And in the past couple of years was investigating the thesis of applying blockchain to traditional finance, which up until the US election last year, I believed was limited to private permission blockchain. And then after the US election, I had to change my thesis.", "end": 192.496 }, { "start": 192.496, "speaker": "Manuel Klein", "text": "And that thesis is still prevailing, right? mean, when you look at traditional finance initiatives over the last years, it's heavily focused on private blockchains. We are covering that a lot in this podcast as well. Many players in the crypto space think private blockchains are completely dead. I mean, you could argue how successful they are. I think that is a valuable and valid discussion. However, the predominant focus I fear or I see in the current setup is still private blockchains.\nAnd now you mentioned the new administration with public blockchains. Was that the pivotal moment where you then said, I want to do something else? has this been brewing, I would say, or you could say over the last years anyhow in your head and your desire to do something else?", "end": 239.79 }, { "start": 239.79, "speaker": "Tony Mclaughlin", "text": "Well, I think the very first thing to do is to establish whether any kind of blockchain is good in traditional finance. And that's an interesting question, which is not obvious because blockchains, know, Bitcoin, Ethereum were not invented to augment traditional finance. They were invented as an alternative to traditional finance. You know, they're trustless.\ninfrastructures and traditional finances based upon trust. So the very first thing I think to do if you want to build this intellectual structure, if you want to build a rationale for why any kind of blockchain, you first have to create a thesis around why blockchains are good in traditional finance. And over the years, I satisfied myself that there is\na thesis there. And essentially it's about recognizing that in traditional finance today, we live in the messaging paradigm where you have thousands and thousands of separate financial institutions with their own balance sheets. And every financial transaction that you can imagine essentially boils down into updating those balance sheets.\nSo you fundamentally have a coordination problem or a coordination activity that you have to perform. For example, Manuel, if I'm making a payment to you, then there's at least three balance sheets that have to be updated. At the beginning of the transaction, my bank owes me $100. At the end of the transaction, your bank owes you $100. And for that to happen, the balance sheet of the central bank has to be updated. So...\nWhat a payment is, is actually updating ex balance sheets. And today we do that through messaging. And the question is whether the addition of a blockchain helps and blockchain is fundamentally a state machine. And I satisfied myself that adding a state machine into traditional finance would help update the balance sheets in a coordinated manner. And I wrote a paper on this called", "end": 382.604 }, { "start": 382.604, "speaker": "Tony Mclaughlin", "text": "Ready Layer 1, where it essentially, I think, lays out that thesis, it lays out that thesis to my satisfaction. And that's independent of whether the blockchain would be a public permissionless blockchain or a private permission blockchain. But I'll just pause there. I don't want to do a big monologue. Let me know if you think that makes sense. I've got a nice analogy that I can go into as to.\nwhy this makes common sense, if you'll let me do that.", "end": 414.545 }, { "start": 414.545, "speaker": "Stefan Grasmann", "text": "Maybe one question in that regard. So, because I also have this discussion quite a lot of times. When you imagine where blockchains are coming from, they come from this peer-to-peer idea with a very different problem to solve than what you just described, actually. So, do you think blockchains are the superior mechanism for this coordination problem? Or do you think there could be completely different distributed systems that are?\nfaster period to blockchains for solving that distributed account management problem.", "end": 449.964 }, { "start": 449.964, "speaker": "Tony Mclaughlin", "text": "Yeah, look, we're getting to the heart of it, which is what's the problem to be solved and what does the tool do? So a blockchain was invented as a who owns what machine. That's what it does, it keeps track of who owns what. And that state machine capability doesn't exist in traditional finance at the moment between the firms. What we have is messaging between the firms.\nAnd so the analogy I like to give is this, is, Stefan, if you are organizing a dinner party for 10 people, would you rather organize that dinner party with email or with WhatsApp?", "end": 492.157 }, { "start": 492.157, "speaker": "Stefan Grasmann", "text": "with WhatsApp.", "end": 494.05 }, { "start": 494.05, "speaker": "Tony Mclaughlin", "text": "But why?", "end": 495.943 }, { "start": 495.943, "speaker": "Stefan Grasmann", "text": "because everybody, I can invite everybody to the chat and we all see the status quo of the invites.", "end": 502.78 }, { "start": 502.78, "speaker": "Manuel Klein", "text": "Shed ledger.", "end": 502.84 }, { "start": 502.84, "speaker": "Tony Mclaughlin", "text": "That's exactly it. Because there's, actually in the WhatsApp chat, there's a common state, right? So I think just in that simple common sense example, you can ask yourself if it's easier to organize a dinner party with WhatsApp, then why is it that every financial transaction on the planet is organized by email?", "end": 510.023 }, { "start": 510.023, "speaker": "Stefan Grasmann", "text": "Exactly.", "end": 531.261 }, { "start": 531.261, "speaker": "Stefan Grasmann", "text": "But here comes the question. do you integrate your WhatsApp chat with your local database? I think that's a problem even in the real world outside of banks, isn't it?", "end": 531.484 }, { "start": 531.484, "speaker": "Manuel Klein", "text": "I mean, I think...", "end": 535.57 }, { "start": 535.57, "speaker": "Manuel Klein", "text": "So no, go, go, go.", "end": 541.825 }, { "start": 541.825, "speaker": "Tony Mclaughlin", "text": "I'm", "end": 546.498 }, { "start": 546.498, "speaker": "Tony Mclaughlin", "text": "Yeah. And look, this comes into the fundamental question of how do you get everyone to agree to use the same state machine? And that's very tricky. And now let's think about the messaging layer. The messaging layer has been abstracted and it hasn't all ended up in the same place. But Swift is a messaging layer which is adopted by 10,000 plus.\ninstitutions and Visa and MasterCard are messaging layers which have many thousands of institutions. And then at the domestic layer, the ACHs and the real-time payment systems are prevalent from a domestic perspective. so structured messaging between banks and between financial systems, financial players like FinTechs also has been organized, has been abstracted.\nIt would be crazy for anyone to try to build their own. An individual bank doesn't try to build its own messaging platform. It uses something which exists at the industry level. But then comes the question about private permission blockchain. And to my mind, they are all more or less functionally equivalent being they're who owns what machines? They're state machines.\nand state machines inserted into traditional financial services would be good. But the problem is actually, and they're all computationally equivalent, right? They're all Turing machines. You can run any computation on them. The question actually isn't, look, the focus is very often, which is the best private permission ledger? That's actually not the real question. The real question is an adoption problem, not,\na technology problem because broadly speaking, technologically speaking, they're all equivalent. Now here's the big difference between the private permissioned chains and the public permissionless chains. With the private permissioned chains, you have a boot problem. You have to boot the network. On the public chains, they already exist.", "end": 682.296 }, { "start": 682.296, "speaker": "Tony Mclaughlin", "text": "So.", "end": 682.417 }, { "start": 682.417, "speaker": "Stefan Grasmann", "text": "And by the way, you see the same problem in public chains. So if you try to compete nowadays on a layer one basis, you see the chicken egg problem. How do you get the cold start problem actually solved? So you see that in every network, I guess. And some of them are a bit more mature. And even if they are maybe not so competitive in certain aspects, like scalability, speed, transaction costs or so, they still prevail. So actually you see the same game.\nplaying out on public chains that you just described.", "end": 715.616 }, { "start": 715.616, "speaker": "Tony Mclaughlin", "text": "And look, often in history, we don't see the superior format become the mass adopted format. And the classic example of that is the Betamax versus VHS on videotape that many of your listeners will be too young to even relate to. But the truth of it is that the public networks already exist and the private networks have, every single one of them has struggled to scale.", "end": 746.096 }, { "start": 746.096, "speaker": "Manuel Klein", "text": "And coming back maybe to what you said, what your thesis was and what you described also in the white paper, this has become the regulated liability network movement. would already rather call it right where there was a couple of proof of concepts in the UK, a couple of proof of concepts in the US. There were some discussions also to do such a proof of concept in Europe over the last years. And now I would say it has led to also project Agora, which is\nmore or less the same philosophy, right? To have, as you say, different types of money, different liabilities of different issuers, the debtor agent, the creditor agent, so the debtor bank, the creditor bank or the beneficiary bank, and also the settlement bank, and eventually even more settlement banks as per a correspondent banking transaction, eventually also central banks on the network. So that vision...\nis still not forgotten, I must clearly say, right? So it's central to what is happening in traditional finance to say, how can this new technology, the state machine, be used to process payments more efficiently? Now, you also said, obviously, a state machine for multiple players in the financial sector would be good, but then there's also transparency issues, right? And this is then...\nAlso what came up, what had to be solved or still has to be solved, right? There is now, for example, Partio that is in production. They use a transparency layer on top of it, which then diminishes a bit the value proposition of this open, very flexible infrastructure, right? So where do you see this all playing in, saying, is there still a route for that? Do you still see a future for that and, you know, solutions to all these problems or?\nWould you rather say, look, we have tried it. This concept of using blockchain technology, of using a state machine is interesting, but so far has not come to fruition. There's no private chain that has scaled up, which everybody agrees to. Let's now focus on what we have, which is public infrastructure. It's there. Just use it.", "end": 874.274 }, { "start": 874.274, "speaker": "Tony Mclaughlin", "text": "Yeah, there's a lot to unpack there, Manuel, but I think I'd like to explain another one of my foundations on this work, which is the same across public permissionless and private permission. And the reason why I worked on RLN in the first place is because I didn't want sovereign currency to...\nbe overtaken by non sovereign currency. I saw, obviously witnessed the rise of cryptocurrencies and again, founding ideology of Bitcoin was not to create this digital gold that was to make a peer to peer method of payment.\nSo in its own terms, in its own kind of like ideologically pure terms, it hasn't fulfilled that objective. It's become something else. And I think when I read the Bitcoin white paper very early on, I had to ask myself this question. Do countries, is the sovereign state, does it have a right to the monopoly over money? And...\nThat's a kind of deep question. I, again, I live in a very safe country. And so my answer to this is probably quite subjective. But I would say that in general, the monopoly that the government has over money comes from quite a deep place. It comes from the social contract.\nThere are certain monopolies that we as citizens give to the government. That's a monopoly over lawmaking and the use of force and also a monopoly over money. And so my fundamental belief is that the money that we use in most countries should be sovereign money. Now, again, there are countries where that statement...", "end": 1010.04 }, { "start": 1010.04, "speaker": "Tony Mclaughlin", "text": "doesn't make sense because the government hasn't been an effective steward of money. But in general, I think I come to believe that money should be something which is controlled by the nation state as part of the social contract. that's the root of RLN. And the root of RLN was if we need to upgrade sovereign currency, let's use blockchain.\nand let's put the different aspects of the sovereign currency system onto blockchain. And the different aspects of sovereign currency are central bank money, commercial bank money, e-money, and licensed stable coins. So the RLN thesis actually is independent of the type of blockchain used. What it really says is, wouldn't it be interesting to have a common sub, a common.\nprogrammable substrate that was 24 by seven, a state machine that could express central bank money, commercial bank money and fintech money on the same platform. Would that be interesting? And then because I'm Scottish and I don't like spending a lot of money, I thought the best way of doing that would be to gather together a bunch of banks and others and we explore that thesis together with 10 or 20 or 40.\ninstitutions putting in a small amount of money and testing the thesis. Because what I hate to see, I hate to see people spending a hundred million dollars to build a mousetrap and then encounter an adoption problem. This I find tragic and this I will never do.", "end": 1119.603 }, { "start": 1119.603, "speaker": "Stefan Grasmann", "text": "But then, then you, you pivoted end of last year and you, you always boil that down. I heard that pitch several times now. I just said, okay, the U S election came and some, somehow it made click in your head. Can you, can you describe that process? I think it was not just happening overnight. I think you were led to that decision over, over time. Please, please describe that process.", "end": 1145.549 }, { "start": 1145.549, "speaker": "Tony Mclaughlin", "text": "It was a click just as dramatic as the Thanos click in the Avengers movie. And it was literally the day after the US election. And the day after the US election, came to the following. I realized that banks would be able to participate in public permissionless networks.", "end": 1155.474 }, { "start": 1155.474, "speaker": "Manuel Klein", "text": "You", "end": 1156.242 }, { "start": 1156.242, "speaker": "Stefan Grasmann", "text": "Ha ha ha.", "end": 1175.406 }, { "start": 1175.406, "speaker": "Tony Mclaughlin", "text": "I realized that as an inevitability. And here is the rationale. It became clear to me that a stablecoin bill in the US would pass at some point and stablecoins live on public permissionless blockchains. And it would be intolerable from the bank's perspective and from the regulator's perspective only to allow non banks to participate in stablecoins.\nand therefore banks would be allowed to participate in public permissionless networks.\nSo that was literally the click the day after the election. And frankly, I decided on that day not to spend another second of my life on private permissioned blockchain adoption.", "end": 1223.634 }, { "start": 1223.634, "speaker": "Manuel Klein", "text": "That does not answer the full shift, I would say, right? Because it's only the infrastructure that you touched. It's also then focused really on a new type of money that was so far not as you were working at a large organization at a large bank that provides deposits that was not part of your focus or the core of your focus, right? You now then shifted from tokenized deposits or representing deposits on a blockchain into stable coins, which is\nDifferent, maybe not so different. think we're going to discuss this, nevertheless, it's currently at least being used very differently, right? What was that shift as well? So next to the infrastructure shift.", "end": 1266.758 }, { "start": 1266.758, "speaker": "Tony Mclaughlin", "text": "So this was another Thanos type click, actually, this story or not, but on the 30th of November, to my shame, took me 30 years to come to this realization. Well, maybe not 30 years, but on the 30th of November, I realized that a stable coin was a traveler's check.\nSo let me describe to you a travel of check. A travel of check is a US dollar instrument. It's a bearer instrument. It's a negotiable instrument. It's issued by a non-bank. It is pre-funded and fully collateralized.", "end": 1301.158 }, { "start": 1301.158, "speaker": "Manuel Klein", "text": "Yeah, please.", "end": 1317.942 }, { "start": 1317.942, "speaker": "Tony Mclaughlin", "text": "and the first travelers check was issued in 1891. And I think it was actually redeemed in Germany. From memory reading about it, I think it was redeemed in Germany. Now, the only difference I realized on the 30th of November that the only difference between a travelers check and a stable coin is that the travelers check is made of atoms and the stable coin is made of information.", "end": 1345.106 }, { "start": 1345.106, "speaker": "Manuel Klein", "text": "So walk us through how would the funding of a travelers check work. Is it really so it's also new to me because I am not a check person and the only check I know is against a deposit. So here in this case really there is pre-funded balance that is put aside held at an account and then you issue a paper against it that can you know be transferred as a bearer instrument. The one who holds it ultimately can clear the\ntravelers check, but the deposits sit in a dedicated account that back this traveler check.", "end": 1381.88 }, { "start": 1381.88, "speaker": "Tony Mclaughlin", "text": "Manuel, it's like really to me, because I lived through that era, it's so funny that something that was very familiar to me is like science fiction to you. You know, back in the day, Manuel, we used to have space planes as well. We used to have the space shuttle and we had supersonic jet back in the day. know, isn't it crazy? We had supersonic jet passenger jets.", "end": 1392.58 }, { "start": 1392.58, "speaker": "Stefan Grasmann", "text": "Ha ha.", "end": 1402.032 }, { "start": 1402.032, "speaker": "Manuel Klein", "text": "Yeah.", "end": 1411.286 }, { "start": 1411.286, "speaker": "Tony Mclaughlin", "text": "And though we don't, this is tragic. So anyway, these instruments, everyone used them to go on holiday. And you would buy them in the home country and you would take them on holiday and you could redeem them universally in hotels, bureau de change, banks. And they were ubiquitous. And they were ubiquitous.", "end": 1414.994 }, { "start": 1414.994, "speaker": "Manuel Klein", "text": "Yeah, yeah, I do remember.", "end": 1440.583 }, { "start": 1440.583, "speaker": "Stefan Grasmann", "text": "I am actually old enough to have used them, but it's a long time ago.", "end": 1443.022 }, { "start": 1443.022, "speaker": "Tony Mclaughlin", "text": "Ha ha ha!\nNow, Manuel and Stefan, you guys are not as young as the crypto bros, but you can just imagine the reaction that I get when I try to explain traveler's checks to the crypto dudes.", "end": 1461.009 }, { "start": 1461.009, "speaker": "Stefan Grasmann", "text": "That will be complicated.", "end": 1461.266 }, { "start": 1461.266, "speaker": "Manuel Klein", "text": "They're like, shit, it's the same, but digital.", "end": 1464.91 }, { "start": 1464.91, "speaker": "Tony Mclaughlin", "text": "Yeah. So essentially when you realize that this instrument that was invented in 1891 is the same as stable coin. And then if you kind of understand how checks work and how checks develop, you actually see the future of stable coins is written in the past of checks and everything fell into place and\nI can prove this to you guys when we meet, but my resting heart rate usually is about 47 beats per minute. And I'm not joking with you, on the day I had that realization, my resting heart rate went from 47 to 55. And it stayed there ever since. mean, genuinely, yeah.", "end": 1519.738 }, { "start": 1519.738, "speaker": "Manuel Klein", "text": "Stay there ever since.", "end": 1520.083 }, { "start": 1520.083, "speaker": "Stefan Grasmann", "text": "You", "end": 1522.316 }, { "start": 1522.316, "speaker": "Tony Mclaughlin", "text": "Genuinely an idea has overclocked me, right? That's just because of an idea overclocked me. And the real thing was I realized that if these things, if these stable coins could be cleared, then they have singleness of money and they become cash equivalents. And then they just become part of the fiat currency system. And then once you have a stable coin, which is a cash equivalent, then stable coins,", "end": 1526.194 }, { "start": 1526.194, "speaker": "Manuel Klein", "text": "Yeah.", "end": 1552.002 }, { "start": 1552.002, "speaker": "Tony Mclaughlin", "text": "Dominate stable coins become the biggest form of payment on the planet. Now there's a lot to unpack there but essentially It all came from this realization that stable coins or travelers checks", "end": 1566.003 }, { "start": 1566.003, "speaker": "Stefan Grasmann", "text": "But let me make an analogy because I think if we go through the whole podcast up to now, then what you say actually is that you still have this different technical system, accounting systems in all these banks. And your thesis is actually that you use public blockchains and stable coins to interconnect them. And as soon as a stable coin is sent from A to B,\nYou use kind of a clearing system on the destination side to bring it back into the normal system. So actually you try to prolong the life of the existing system. in the first part, just use stable coins as an interconnection mechanism and get back to the old system as soon as possible and then take it from there. That's how.\nI understand your thesis for now. Is that right?", "end": 1625.902 }, { "start": 1625.902, "speaker": "Tony Mclaughlin", "text": "Well, I think that's part of it, but what you get by integrating stable coins into traditional finance is much more than that because actually what you do is you preserve one of the original crypto building blocks, which is peer to peer transactions over trustless networks. And Stefan, here's the point. Once you can deposit stable coins into your account at UBS,", "end": 1644.774 }, { "start": 1644.774, "speaker": "Manuel Klein", "text": "to you.", "end": 1656.166 }, { "start": 1656.166, "speaker": "Tony Mclaughlin", "text": "or I'm sure Stefan, you'll be with one of the high net worth private banks in Switzerland. So I can't even imagine what is your bank. But once you can deposit stable coins at par value into your bank account, you don't need to.", "end": 1675.914 }, { "start": 1675.914, "speaker": "Tony Mclaughlin", "text": "And this is one, so here again by analogy, once you can take all the money out of your bank account into cash, you don't need to. Because you trust.", "end": 1687.091 }, { "start": 1687.091, "speaker": "Stefan Grasmann", "text": "because you trust. Okay. So you, what,", "end": 1691.42 }, { "start": 1691.42, "speaker": "Manuel Klein", "text": "So it's the infrastructure behind it that provides the trust ultimately, right? It's the clearing system behind it that gives you the option to always redeem your check, right? You will know that there is the clearing system behind it. You will know that your bank is connected. And at least to my understanding of the whole proposition of Ubix, now we call the baby by the name, of Ubix, which is this clearing network that you are now building and forming.", "end": 1691.448 }, { "start": 1691.448, "speaker": "Tony Mclaughlin", "text": "So I'm not.", "end": 1696.258 }, { "start": 1696.258, "speaker": "Tony Mclaughlin", "text": "That's right.", "end": 1702.434 }, { "start": 1702.434, "speaker": "Tony Mclaughlin", "text": "Yes.", "end": 1720.236 }, { "start": 1720.236, "speaker": "Manuel Klein", "text": "is ultimately that the credit in your bank account might even happen before the clearing, meaning the liquidity enters at the beneficiary bank, right? Because there's so much clarity through that clearing system that the bank feels comfortable to give you the money, similar to how you would hand in your check and say, credit it onto my bank account. And then the bank does the clearing in the background.", "end": 1745.825 }, { "start": 1745.825, "speaker": "Tony Mclaughlin", "text": "Yeah, when you take a, like imagine you are again in Germany or Switzerland and you receive a dollar check, which is not unusual because people in Germany, they own stock in American companies and they receive a dividend check. So let's say that you receive a dividend check in Germany and you take it to Deutsche Bank. There's two things that Deutsche Bank can do. They can negotiate or collect.\ninto check clearing, this is how check clearing works. If Deutsche Bank negotiates the check, they don't wait for the item to be cleared. They give you the money straight away. If Deutsche Bank collects the check, they send the check to their dollar correspondent and their dollar correspondent sends it through the US dollar check clearing system and the check clearing system is just a machine for collecting money from the issuer.\nThey get the money from the issuer, they give the dollars to Deutsche Bank and then Deutsche Bank gives you Deutschmarks, not euros. I'm only joking. I was getting back to the days of travelers checks. Deutsche Bank gives you euros. So this is a beautiful transaction for many reasons. Number one, if we apply it now to stable coins. So my argument is that Deutsche Bank or any bank today that accepts dollar,", "end": 1814.045 }, { "start": 1814.045, "speaker": "Stefan Grasmann", "text": "Ha ha ha.", "end": 1834.134 }, { "start": 1834.134, "speaker": "Tony Mclaughlin", "text": "checks, no problem can accept dollar stable counts, no problem, under existing law. Well, if there is such a, well, there's two options. mean, the bank could have a bilateral relationship with each issuer, but that soon becomes impossible as the number of issuers expands. So what the bank needs is a way of clearing those items.", "end": 1841.082 }, { "start": 1841.082, "speaker": "Manuel Klein", "text": "if there is such a clearing system.", "end": 1860.918 }, { "start": 1860.918, "speaker": "Tony Mclaughlin", "text": "But the beautiful thing about the transaction is the bank is not acting as an exchange. It's not acting as a custodian. It's accepting a negotiable instrument from you and it's collecting the money on your behalf. The bank is taking no risk because if the issuer doesn't pay, then the bank just gives you back the stablecoin as if it's a bounced check. As if it's a bounced check.\nSo this is actually a very, very beautiful business for banks to get into. And my strong recommendation to every bank on the planet is open hosted wallets for your customers and accept stable coins on behalf of your customers and process them exactly like you process checks.", "end": 1913.36 }, { "start": 1913.36, "speaker": "Stefan Grasmann", "text": "And this is the perfect pitch for Ubik now. So that's what you've built, Tonium.", "end": 1916.974 }, { "start": 1916.974, "speaker": "Tony Mclaughlin", "text": "I don't think I've mentioned that company's name once and we could get through the whole podcast and if what I'm building just becomes a logical consequence of this, then so be it. But I don't think your audience is that interested in me selling my product. More interesting is to talk about the market structure because...", "end": 1923.666 }, { "start": 1923.666, "speaker": "Manuel Klein", "text": "Yeah.", "end": 1943.901 }, { "start": 1943.901, "speaker": "Stefan Grasmann", "text": "Absolutely.", "end": 1944.546 }, { "start": 1944.546, "speaker": "Tony Mclaughlin", "text": "The market structure that emerges from this is very different from what most people believe. And the policy recommendations, I mean, I hope we get on to talking about digital Euro and CBDC and what should central banks do and what should banks do and what should regulators do. But the consequences of this are profound and profoundly good, profoundly good across the ecosystem.", "end": 1971.684 }, { "start": 1971.684, "speaker": "Manuel Klein", "text": "One of the assumptions I think you already mentioned, meaning that there might be a future where there's not only one or two stablecoin issuers, because ultimately then you could argue, well, there is a reserve bank, it maybe offers a public address to which banks, other banks can send the stablecoins and then an automated transfer is being taken to clear that transaction. what are the assumptions on your\nproduct build and what market problems do you actually solve in providing this clearing system? Where is it actually needed or when in which situation is it actually needed?", "end": 2004.493 }, { "start": 2004.493, "speaker": "Tony Mclaughlin", "text": "Yes.", "end": 2011.094 }, { "start": 2011.094, "speaker": "Tony Mclaughlin", "text": "Okay, so I will make a prediction and we can revisit this in five years time. I believe the market structure for stable coins will be, and I mean this literally, every bank and fintech on the planet will receive and every bank and fintech on the planet will send.", "end": 2018.13 }, { "start": 2018.13, "speaker": "Manuel Klein", "text": "Sounds good.", "end": 2037.762 }, { "start": 2037.762, "speaker": "Tony Mclaughlin", "text": "Now, let me give you the historical parallels. In the age of checks, everyone can send, everyone can receive. In the age of ACH, everyone can send, everyone can receive. In the age of correspondent banking, everyone can send, everyone can receive. In the age of plastic, there are 16,000 issuers, 16,000 issuers of Visa cards. Everyone can send, everyone can receive.\nexactly the same dynamic will drive everyone to be able to receive and everyone to be able to send. But the trouble is people are looking at the wrong place. Everyone defaults to issuance. The first, and so here's what you do. You start thinking, well, stable coins are coming. I'm gonna be a stable coin issuer. Well, how can I build an acceptance network? I don't know how to do that. Then I give up.\nThis is the wrong place to begin. The beginning manual, including for your institution, the first thing to do is to open hosted wallets to receive stable coins on behalf of your clients. This is the first thing to do. They usually say it's better to give than to receive. In the case of stable coins, it's better to receive than give.", "end": 2127.484 }, { "start": 2127.484, "speaker": "Manuel Klein", "text": "What that?", "end": 2127.5 }, { "start": 2127.5, "speaker": "Tony Mclaughlin", "text": "Now, because you can make a lot of lovely money by receiving. Now, let me just give you, let me just try to prove this with incentives and some math. So let's imagine, you know, the current stablecoin market cap is about 250 billion. And let's just say that it goes to a billion dollars.\nAnd let's say that for the time being it's driven by US dollar stablecoins. That's not always going to be the case, but let's say that to begin with it is. So imagine there's a trillion dollars worth of stablecoins, of US dollar stablecoins circulating around the planet.\nIn today's world about half a percent of stable coins are redeemed per day. Half a percent per day. So the calculation is one trillion dollars times half a percent times 365. You get annual redemptions of 1.825 trillion dollars of stable coins. And then let's think about how much money banks and fintechs can make by catching those stable coins and converting them into local currency.\nSo you can look at what other people are charging for this service at the moment, but let's say just to make up some, just to have a model, again, I'm not saying these are what the prices will be. I'm just giving you round numbers to do your own calculations. Let's say that you charge the customer 100 basis points fee to catch and convert the stable coin and 100 basis points FX.\nThen you have 200 basis points on $1.825 trillion. And then you have a revenue pool of $36 billion. And your only question is how much of that $36 billion do you want to capture in your institution? And so if you believe, well, what do you have to believe? You just have to believe there's gonna be a large supply of foreign stable coins.", "end": 2262.912 }, { "start": 2262.912, "speaker": "Tony Mclaughlin", "text": "and that you will be able to charge your customers some fee and some FX to catch them and convert them into euros. And that is just math. will banks and fintechs sit on the sidelines and not compete for that revenue pool? Impossible. that's the reason why. And so that's an immediate business case to receive.\nthe business case to send, the business case to issue, actually is a lot easier once there's a universal acceptance network. So ask yourself this question, which is, why is it that the smallest bank in the world can issue a Visa card? Because they don't have to build the acceptance network.\nOnce the acceptance network exists, it's trivial for anyone to issue a card because they don't have to do the hard work.", "end": 2321.716 }, { "start": 2321.716, "speaker": "Stefan Grasmann", "text": "you", "end": 2329.551 }, { "start": 2329.551, "speaker": "Stefan Grasmann", "text": "So what you say is actually it's the immediate business case. It's quite easy to start. I think issuing a stable coin is much more work to do, independent of setting up this whole acceptance network, but you need to do your homework actually. And especially for smaller or mid-sized players who don't even might imagine nowadays, maybe in five years, but nowadays they don't even think about issuing a stable coin, but to...\nget your fingers dirty and because that's what we see most banks doing. They want to show off that they're actually part of this revolution. They go along with this innovation somehow. So apart from doing marketing projects, your recommendation would be, hey, start with receiving stable coins and create a business out of that.", "end": 2381.122 }, { "start": 2381.122, "speaker": "Tony Mclaughlin", "text": "Yes, yes, and my argument is you can, there is no change of law necessary because if you're a bank that's already processing dollar checks, at dollar checks in Germany are not regulated in Germany. The issuer is not regulated in Germany. And so a German bank is happily processing dollar checks and it can happily process dollar stablecoins. And by the way,\nThis is not only good for the individual bank, the central bank and the government will be delighted. And let me explain why. So, Stefan, I'm going to appoint you as the head of the ECB and ask you a couple of questions. So Stefan, here are the questions. And this is very, very easy logic.", "end": 2431.251 }, { "start": 2431.251, "speaker": "Stefan Grasmann", "text": "my god.", "end": 2431.73 }, { "start": 2431.73, "speaker": "Manuel Klein", "text": "Really nice.", "end": 2440.952 }, { "start": 2440.952, "speaker": "Tony Mclaughlin", "text": "Stefan, do you anticipate a wave of foreign stablecoins coming towards the EU?", "end": 2446.587 }, { "start": 2446.587, "speaker": "Stefan Grasmann", "text": "Absolutely, that's unavoidable.", "end": 2449.068 }, { "start": 2449.068, "speaker": "Tony Mclaughlin", "text": "Okay, do you, and now Stefan, I know you're a crypto guy, but I'm asking you as the head of the central bank, okay, do you, head of the central bank, prefer those stable coins to arrive in unhosted wallets or hosted wallets?", "end": 2456.881 }, { "start": 2456.881, "speaker": "Stefan Grasmann", "text": "Okay.", "end": 2466.599 }, { "start": 2466.599, "speaker": "Stefan Grasmann", "text": "I assume in that role hosted wallets.", "end": 2469.442 }, { "start": 2469.442, "speaker": "Tony Mclaughlin", "text": "Yes, now here's the next question. Again, you're the head of the central bank. Do you prefer that once those stable coins are in the hosted wallet at Deutsche Bank, do you want them to remain as dollar stable coins or be converted into either euros or dollars on the balance sheet of Deutsche Bank?", "end": 2488.893 }, { "start": 2488.893, "speaker": "Stefan Grasmann", "text": "We need to go for Euro, I guess.", "end": 2491.872 }, { "start": 2491.872, "speaker": "Tony Mclaughlin", "text": "Okay, so as a consequence of these three questions, your next step is to call up all of the European banks and say, you need to offer hosted wallets and fintechs. And this, and convert, and convert because you want the money on the balance sheet of your local financial system. You don't want them circulating on hosted wallets to", "end": 2507.633 }, { "start": 2507.633, "speaker": "Stefan Grasmann", "text": "And convert, and convert. think that's the interesting point.", "end": 2520.606 }, { "start": 2520.606, "speaker": "Tony Mclaughlin", "text": "proliferate tax evasion and financial crime. So the logic there is, and this is why I get crazy when I hear people in Europe saying that the answer to stable coins is CBDC. No, wrong. The answer to stable coins is to catch them and convert them. I call it the Pokemon strategy. Pokemon is...", "end": 2547.699 }, { "start": 2547.699, "speaker": "Stefan Grasmann", "text": "Catch them all.", "end": 2549.666 }, { "start": 2549.666, "speaker": "Tony Mclaughlin", "text": "You gotta catch them all, you gotta catch them all. you know, if you're in a bank, just your strategy is Pokemon. Every stable coin you catch and convert is fee and FX revenue and the central bank will be delighted.", "end": 2552.85 }, { "start": 2552.85, "speaker": "Manuel Klein", "text": "catch them all.", "end": 2568.151 }, { "start": 2568.151, "speaker": "Stefan Grasmann", "text": "So to nail that down, sorry Manuel, I need to go deeper because I'm deeply involved in these discussions. So we have a provider, build a CBDC, we help with stable coins. And I think we need to broaden our horizons somehow because usually it's very often about this issuance thing. So yes, do we need, and I think we need Euro stable coins, we need Swiss franc stable coins.", "end": 2572.304 }, { "start": 2572.304, "speaker": "Manuel Klein", "text": "Yeah, sure.", "end": 2597.725 }, { "start": 2597.725, "speaker": "Stefan Grasmann", "text": "But maybe the beginning is on the other end, if I follow your narrative actually, Tony. It's about getting into doing mode, accepting stuff that's already there, which is US dollar stablecoins actually unavoidable. They are pushed into the market on a global level. That's also, I think, the big argument against the digital euro that...\nAll the CBDC stuff is usually invented for the Euro zone and not so very much beyond that. the stable coins are a global phenomenon used outside your own currency system, actually. So that's another argument, I think, for your ideas that in a global world, despite all the geopolitical assumptions and motivation, you actually need to accept reality and at least air stay with\nwith the nose ahead of the water or above the water line. And that's actually your thought line, I guess.", "end": 2659.756 }, { "start": 2659.756, "speaker": "Tony Mclaughlin", "text": "It is, look, let's think about how this might play out in a country like Switzerland. So if the first thing, look, if the first thing you try to do is to launch a Swiss stable coin, you come across all of the adoption problems and the acceptance network problems, all of this stuff you come up against immediately. If you start in a different place, start by seeing every bank and fintech in Switzerland.\nshould be able to offer hosted wallets to catch and convert foreign stablecoins. Then what do you have? Then you actually have an acceptance network for Swiss stablecoins.", "end": 2703.126 }, { "start": 2703.126, "speaker": "Tony Mclaughlin", "text": "And it's the same in Europe. If every bank in Europe opens hosted, Bank and Fintech opens hosted wallets to accept foreign stable coins, then European stable coins can circulate on the same network. And then by the way, we will have a very beautiful and resilient financial system because every bank in Europe would be connected to many public blockchains.\nAnd what does that mean? If one circuit, if SEPA goes down, SEPA instant goes down, that's okay because Solana is still working and Solana goes down, that's okay because Polygon is still working and Polygon goes down, that's okay because Stellar is still working. So if we get to a situation where, and this is Manuel back to your previous question about what extra do you get? Or Stefan, you were saying, do you just revert back to traditional finance? We'll know what you get is.\na very resilient world where every financial institution is not connected to one state machine, they're connected to multiple and multiply redundant state machines. And this is a good place to be.", "end": 2776.028 }, { "start": 2776.028, "speaker": "Manuel Klein", "text": "Coming back maybe, let me ask one more question on exactly the market problem that is about to solve. Obviously, there's lots of hype at the moment. Everybody is talking about stable coins. Everybody wants to have a stable coin strategy. But where do you really see the added value of providing payments via stable coins? And let me add one more thing to that.\nat what blockchain technology so far has brought out, right? I think, and you mentioned it already, the big benefit is peer-to-peer transactions, right? It's a bearer instrument ultimately that is sent from A to B where the transaction is settled within the same or by using the same instrument. It's a liability of the issuer. If we only had one single bank in the world, for example, also a central bank and only CBDC,", "end": 2812.227 }, { "start": 2812.227, "speaker": "Tony Mclaughlin", "text": "Yes.", "end": 2832.854 }, { "start": 2832.854, "speaker": "Manuel Klein", "text": "consequence would be the same, right? You settle, you transfer, it's one book ledger entry that settles it very, very efficiently. This is not how our current monetary system works where we have deposits that settle in central bank money. So as you stated in the beginning, at least three balance sheets are involved, right? Now, when we think about stablecoins, they are not that, but they are bearer instruments. So it's obviously much easier to transfer them. Isn't that\nFirst of all, the key value proposition, but then also when you think about UBIX and Stefan, you mentioned it as well. UBIX is about transferring back from stable coins, which might not be a good store of value because they don't bear in a bear yield, right? But rather a good means of payment, right? But then very easily and efficiently transfer back into a deposit at a bank, right? So what is the value proposition that that consequence has?\nWhy should stablecoins ultimately be used if it's only just for the transfer but everybody's interested in the deposit anyhow and then you end up having to go through the existing settlement systems anyhow?", "end": 2903.534 }, { "start": 2903.534, "speaker": "Tony Mclaughlin", "text": "So great question and again, I'm very keen to be clear on this point. Stablecoins are more than what we see today. Now, I want to again, by analogy, let's say that the only check you had ever seen in your life was a traveler's check.\nand you looked at the travellers check and said, okay, so we've got a US dollar instrument which is a bearer instrument, a negotiable instrument, pre-funded, fully collateralised, issued by a non-bank. And then you said to yourself, okay, that's what a check is and forever shall be. Now, do you guys agree that if you looked at the travellers check and said, that's all a check ever can be, in fact,\nIf you made rules, if you made a set of regulations and said a check must be issued by a non-bank, it must be fully collateralized, must be, you can see that that would be a fundamental error. Because clearly, many different types of issuers can issue checks. Not only American Express travellers checks, but big banks and small banks and.\nIn the US, you can write a check against your money market fund. And back in the day, if you had a credit card, your credit card provider would give you a checkbook and you could write a check against the credit limit. the point I'm trying to make is, regulators, everyone at the moment is looking at a travellers check and saying that is a check.\nAnd in the case of stable coins, they are looking at a stable coin and they're saying that a stable coin is a pre-funded, fully collateralized instrument issued by a non-bank that doesn't bear interest. And this is just a category error. This is just wrong. Totally wrong. Because what we have to do is, and this is not my phrase, someone said this to me, we have to separate the stable from the coin. And we have to understand these two things independently.", "end": 3046.774 }, { "start": 3046.774, "speaker": "Tony Mclaughlin", "text": "Let's think about the coin. The coin is an item, a digital item, like a digital check, that's capable of being cleared at par value. But just because I say that it's got check-like qualities doesn't mean that it can't also have cash-like qualities. And this is the beautiful thing about stable coins. So the beautiful thing about stable coins is,\nStablecoin is to money, what streaming is to music.\nIt's the general purpose technology. So if we think about the evolution of music reproduction technologies, in my life I've seen vinyl, magnetic tape, cassettes, I've seen mini-discs, I've seen iPods, I've seen CDs. These are special purpose technologies which have been replaced by a general purpose technology which is streaming over a phone.\nknow, obviously some people still use vinyl, but the history of technology is the general purpose technology takes over.\nIn payments, I have seen cash, every kind of check, every kind of card, every kind of ACH, every kind of faster payment system, every kind of cockamamie blockchain system in the private permission side. And they're all special purpose machines for doing payments. And Stablecoin is the general purpose machine. And...", "end": 3150.07 }, { "start": 3150.07, "speaker": "Tony Mclaughlin", "text": "the general purpose machine, when it's unleashed, will subsume the functions that were previously expressed by the special purpose machine. So the stable coins that you see today, the oligopolistic market structure, non-bank issuers, the cash-like qualities, all of these are, this is just like we're in the America online stage of the development of the internet.\nDon't mix up America online with the internet. Don't mix up stable coins that we see today with stable coins as they will be. Stable coins, there is no problem with a bank issuing a stable coin against its balance sheet. There is no problem with a stable coin being issued against a line of credit. No problem. There's no problem with a yield bearing stable coin.\nthat you can write a digital check against. That's just like writing a check against the money market fund. So the constraints that we're placing on stable coins at the moment is a little bit like legislating that checks can only ever be travelers checks. It's a category error.", "end": 3227.57 }, { "start": 3227.57, "speaker": "Manuel Klein", "text": "That implies also, if I understand you correctly, that you do foresee a future where end users also actually hold balances in stablecoins and not only use it as a means of payment and then transfer it when received, maybe even the bank automatically transferring it into a balance in their account, but rather also a role of a store of value of money when we think about the three functions, right? Not only means of payment, but store of value.", "end": 3256.674 }, { "start": 3256.674, "speaker": "Tony Mclaughlin", "text": "Well, here's what I call the singularity. The moment that stable coins in their native form, I mean on a blockchain and your wallet on a blockchain, the minute that those become cash equivalents, it's game over. It's game over. Stable coins will become the dominant form of payment on the planet because they are the general purpose technology.\nAnd we don't see it yet because stable coins do not embody all of the features that we see in the traditional payment space. So let me give you a bit of evolution on this. At the moment, the stable coins display their cash-like features. When there's a clearing system, they will display their check-like features.\nover time they will display card-like features and wire transfer-like features and they will subsume them all. I'll give you a very specific example which is if we want stable coins to be used for business to business corporate treasury payments, you must have data. You know, if in a business setting I am sending you a million dollars,\nto pay five invoices, you need to know which five invoices I'm paying. There must be data. And so someone will develop ISO 222 messaging associated with stablecoins and then the stablecoin will look like a wire transfer. And then someone will invent a way of having stablecoins natively in Apple Pay.\nwithout, and then you'll be able to tap them without going through the card rails. And then they will have card-like features, and then someone will invent a way of issuing stable coins against the line of credit. And someone will build loyalty points on stable coins. And so what will happen is the old special purpose form factors will fade away.", "end": 3389.553 }, { "start": 3389.553, "speaker": "Stefan Grasmann", "text": "And there are proof points, that are happening. Our Circle is building exactly what you try to do. They try to establish a new standard to have metadata on top of payments and they create their own payment network. But it's somewhat reduced to their own stable coin thing. And I think it's easy to imagine that might not be enough actually in a world of multiple stable coins and multiple currencies and that most banks won't accept.\nthat dependency on one single issuer. And that again, makes your case somehow that you say, okay, let's accept stable coins as a concept, let's say, and make banks take part in this peer-to-peer system in a kind of standardized and safe way. That's how I understand your arguments on a higher level, actually.", "end": 3442.348 }, { "start": 3442.348, "speaker": "Tony Mclaughlin", "text": "Yeah, look, the market structure is pluralistic. The market structure, no, today the market structure is oligopolistic. The market structure of stable coins will be pluralistic. It is going to be everyone can receive, everyone can send, every currency. By the way, look, Stefan, when you fly to New York, you can shop and you can buy stuff in Bloomingdale's with your Swiss franc card, no problem.\nstable coins from, there's no problem that a Deutsche Bank stable coin will be accepted for payment in Japan, no problem. Think about it, the Japanese bank will be delighted to receive a Deutsche Bank stable coin because it will convert it into Japanese yen and make FX.", "end": 3491.973 }, { "start": 3491.973, "speaker": "Stefan Grasmann", "text": "And they can charge fees on that FX. One question that comes to my mind through that discussion is I completely get the business case on this cross border thing. So you accept a US dollar stable coin, you convert it into Euro or Swiss franc, and the user doesn't even notice that they make some fees out of that. How do you see the business case on a domestic level?", "end": 3494.144 }, { "start": 3494.144, "speaker": "Tony Mclaughlin", "text": "and the charge fees. No problem.", "end": 3518.279 }, { "start": 3518.279, "speaker": "Stefan Grasmann", "text": "Let's take PayPal. If I have a Euro in my PayPal account and I withdraw that to my bank account, I get a hundred Euro for a hundred Euro. So that at least me as a retail client, I don't see where somebody makes money out of that. How do you see the business case in this more singular currency use cases? Is there a business case for banks in that?", "end": 3525.358 }, { "start": 3525.358, "speaker": "Tony Mclaughlin", "text": "Yeah.", "end": 3540.91 }, { "start": 3540.91, "speaker": "Tony Mclaughlin", "text": "in single currency? Well, yes, once there's an acceptance network. Once the acceptance network has already been built, then I think the natural benefits of the general purpose form factor will come to the fore. And, you know, look, I remember very well in 2004, I joined the last bank that I was working for. They gave me a BlackBerry.\nand I was amazed. I don't know if you guys remember blackberry. Manuel, did you ever use a blackberry, Manuel? Yes, no? You did? The blackberry was so addictive that people called it the crackberry. You could not prize the blackberry from someone's And it was supplanted by a more general purpose technology.", "end": 3576.53 }, { "start": 3576.53, "speaker": "Manuel Klein", "text": "Of course. Yeah, yeah, yeah, I did, I did.", "end": 3598.038 }, { "start": 3598.038, "speaker": "Tony Mclaughlin", "text": "And this is just the...", "end": 3598.93 }, { "start": 3598.93, "speaker": "Manuel Klein", "text": "which also had a keyboard, not physically but digital.", "end": 3603.14 }, { "start": 3603.14, "speaker": "Tony Mclaughlin", "text": "It did, but...", "end": 3603.155 }, { "start": 3603.155, "speaker": "Stefan Grasmann", "text": "You", "end": 3603.461 }, { "start": 3603.461, "speaker": "Manuel Klein", "text": "same digitization.", "end": 3606.762 }, { "start": 3606.762, "speaker": "Tony Mclaughlin", "text": "It's very, very difficult to stop the rise of general purpose technologies. It's very, very hard. And it's not about, know, people often say, what's the use case? think asking what's the use case is looking through the wrong end of the telescope. If you asked me when I got my BlackBerry in 2004 and I started using it and then someone described to me the iPhone, I would say, what the hell do I want an iPhone for?\nWhat is the use case of an iPhone? When you're using the BlackBerry, you don't see the use case of the iPhone. It's useless, it's a terrible question. It's like, and it's a, I don't know why the use case question, for some reason, it seems to have become a sign of sophistication to say what is the use case. I think that question has to be deployed very, very carefully so that you don't appear dumb.\nLike if you have a computer, a computer is a general purpose technology, and then I go to a senior manager on my bank and I say, know, we now have a computer, and the senior manager says, well, what's the use case? You quit immediately and go to work somewhere else because that's a dumb question to ask of a general purpose technology.\nYou know, in blockchain land on private permission blockchains, we have wasted 10 years because senior managers don't understand Turing machines. So they have, we've been going through this cycle, which is to say, hey, I wonder if my use case can work on a blockchain. And they pick up their use case and they've got it on a blockchain. And guess what they find out?\nThe blockchain is a Turing machine and all Turing machines are equivalent. Any computer can process any computation. They're all equivalent. So all of these proof of concepts on private permission blockchains have just demonstrated that Turing machines are Turing machines.", "end": 3741.912 }, { "start": 3741.912, "speaker": "Tony Mclaughlin", "text": "So, yes.", "end": 3742.034 }, { "start": 3742.034, "speaker": "Manuel Klein", "text": "which you could also do on a central laptop.", "end": 3745.608 }, { "start": 3745.608, "speaker": "Tony Mclaughlin", "text": "Or you could probably make your microwave run. You might as well ask, can I make my use case run on my microwave? And probably you can. So this, it drives me crazy that for some reason people have got into their head that use case, what's the use case and demonstrate the use case. I've just seen a lot of evidence that that's a very, very, very dumb question that people think is smart.", "end": 3776.914 }, { "start": 3776.914, "speaker": "Manuel Klein", "text": "Looking at the time, are already over an hour. The time has been flying. Maybe as a last question, let's maybe spend two, three minutes also on that, how Ubix and how the clearing system that you aim to build or are already building would fit into what we currently see in the market. Obviously, nobody knows what will develop in detail over the next years in this market. But at least over the last weeks and months, there have been very interesting developments, Where Stripe's offering now\nstablecoin accounts in more than 100 countries based on stablecoins circle as discussed is running his own payment network or try to build his own network. You know, where do you see Ubics fit into these market infrastructures that are maybe at the moment developing? Or are you completely open to anything and say, look, the major use case is cross border payments, banks should join.\nto be able to offer them very efficiently. I don't care about the rest, right? So how do you look at the current market developments?", "end": 3844.03 }, { "start": 3844.03, "speaker": "Tony Mclaughlin", "text": "I-\nLook, people who know me through the RLN project have heard me say that my approach to this stuff is one of thesis testing. And if you're gonna be scientific about something, you develop a thesis, then you test the thesis, and you cannot care about the result.\nright, you should be completely objective about the result. So I have a thesis which is that everyone will receive, everyone will send, and in that environment there needs to be a cleaning house and a cleaning house brings great benefits. And that's the thesis that I intend to test. And the news flow, day by day, I don't pay that much attention to. And also, again,\nThis is just me. I am not trying to force this thesis to work. I very much believe in the phrase man proposes, God disposes, and either the thesis is correct or it's not.", "end": 3924.882 }, { "start": 3924.882, "speaker": "Manuel Klein", "text": "So there is this thesis, you're trying to build it out, showcase that there is added value. What would be the next steps of interested institutions? Reach out to you, become UBIX members, become a settlement bank.", "end": 3937.87 }, { "start": 3937.87, "speaker": "Tony Mclaughlin", "text": "You guys keep trying to make me sell and I'm not gonna do it.", "end": 3943.25 }, { "start": 3943.25, "speaker": "Manuel Klein", "text": "No, no, we have 30 seconds left, so that's the only chance.", "end": 3947.148 }, { "start": 3947.148, "speaker": "Tony Mclaughlin", "text": "I'm not sure if it's held. And what I'm saying is, I just look at interests. It's in the interests of every fintech and every bank to offer hosted wallets to catch and convert those stable coins. The Pokemon strategy is in the interest of every bank and fintech. It's in the interest of every central bank that the stable coins get captured in the local financial system and converted to local currency.\nNow if a consequence of that means that all of your listeners contact me to join Ubix, then so be it.", "end": 3984.082 }, { "start": 3984.082, "speaker": "Manuel Klein", "text": "So be it. That was great. I remember the story that you told about the ECB where Stefan was the ECB manager. I think that's a perfect story for comic. Maybe you think about that. Without further ado, I think that was a great hour. We overran a little bit, but extremely interesting. Thanks a lot for all your insights and this great discussion. We hope to have you back.", "end": 3999.137 }, { "start": 3999.137, "speaker": "Tony Mclaughlin", "text": "Ha", "end": 4013.211 }, { "start": 4013.211, "speaker": "Manuel Klein", "text": "Let's continue that discussion maybe in a year or so or even further to get an update on where you currently stand.", "end": 4017.25 }, { "start": 4017.25, "speaker": "Tony Mclaughlin", "text": "Manuel, have me back, Manuel, have me back whether the thesis fails or succeeds. Either way, it's fine.", "end": 4021.491 }, { "start": 4021.491, "speaker": "Stefan Grasmann", "text": "you", "end": 4023.996 }, { "start": 4023.996, "speaker": "Manuel Klein", "text": "Correct.", "end": 4025.363 }, { "start": 4025.363, "speaker": "Stefan Grasmann", "text": "Tony, Tony, that was the greatest pitch without pitching that I ever witnessed. That was really, really cool. And you know, for the listeners we said beforehand, hey, Tony, don't pitch your product too much. you took it literally. Cool.", "end": 4030.683 }, { "start": 4030.683, "speaker": "Manuel Klein", "text": "Hahahaha", "end": 4043.484 }, { "start": 4043.484, "speaker": "Manuel Klein", "text": "Tony, thanks a lot. Happy to have you back again.", "end": 4046.67 }, { "start": 4046.67, "speaker": "Tony Mclaughlin", "text": "Thank you.", "end": 4047.175 }, { "start": 4047.175, "speaker": "Stefan Grasmann", "text": "Thank you, thank you, very entertaining. Bye bye.", "end": 4050.79 }, { "start": 4050.79, "speaker": "Manuel Klein", "text": "Bye bye, cheers.", "end": 3869.596 } ]