The $100 Trillion Stablecoin Opportunity - CEO Sam Kazemian

Transcript

There will be a short list of real money genius compliant stable coins. They are trying to prevent the stagflation scenario, deep depression, collapse, etc. at all costs. The infrastructure that is underpinning both of these stable coins. What is the composability between the two? Welcome back to the rule. This is your home to learn from the biggest guests, the brightest minds at the tip of innovation. Our goal is to help spread the collective knowledge of everyone in our community. We are breaking crypto out of its echo chamber and taking it to the real world.

Welcome to episode one of Stabled Up presented by no other than Fracks. We've got Sam in the house. Here he is. What up, man? GM, what's up guys? GM uh or GN from wherever everyone's been watching from. Yeah, man sir. Sam, it looks like a new background for you. Dude, it also looks like a new background for our show because we are uh producing the first episode of Stabled Up. Um, thanks for all of your help supporting us. Uh, you've educated us and our audience about stable coins for a very long time and now it it seems like all that education is paying off because stable coins are all the rage. Um, what is your view on like this moment right now in

stable coins? and we'll we'll get into kind of the vision for the show and and all the exciting things happening. Yeah, for sure. Uh first of all, uh it's uh our our pleasure. Uh obviously love love the show and love it even more now that we're uh doing it together. And um I think like we're at a really interesting economic time and time uh in in the industry for stable coins. I think you guys probably just saw um the the Fed uh announced rate cuts, right? Um what what is this? Is this the first rate cut in like uh years or something?

Right. It's been Yeah, it's been a while. Yeah. With like projected uh 50 bips potentially and and in the next, right? So, I think we're at probably the most interesting juncture where stable coins are the hottest technology in in the entire world other than maybe AI, right? These are the two uh things that have the largest mind share and the economic winds are literally about to change, right? And um it'll be interesting to know what is the main like meta, how will stable coins compete in a uh lowering rate environment um and what will be the main GTM strategies that'll be really successful in the next 12 months.

Yeah, the the these are the important questions to ask. Um, so as we uh as we kind of embark on this journey to really look and uh and continue to educate ourselves as well as the audience on the path to $3 trillion in stable coins, this has been the benchmark set by uh Scott Bessett, the Treasury Secretary. Um there's been a lot of patterns, there's been a lot of launches and uh I think I think we ought to get into it. Uh we've got USDH, USA. Uh in addition to all the things that you guys have been making waves when it comes to fracknet, um I want to get your take on the USDH saga. We saw I mean Andy spoke to Jeremy yesterday. We had uh USDC go

native. You guys put in a proposal. Native markets ended up winning the proposal. So generally how was the experience going through this this Dow governance process? It was pretty controversial. It was a great marketing for Hyperlid. I want to I want to get a sense of your experience and then we'll we'll get a sense maybe what this means for Hyperlid and USDH. Yeah, for sure. So, f first of all um yeah, obviously the the FRA proposal didn't win. We were in the in the top five uh final running which was great. Um we obviously worked really hard to put it together on the fly which I think uh excuse me everyone did. um uh and so I think like it it was very interesting because there there's two main takeaways

for it from us. First uh this is probably going to be uh not the last time an ecosystem uh asks for a uh public proposals for issuance of essentially a quasi uh quasi official or unofficial. I know people have said it's just like a ticker and stuff but but the obviously the shelling point around this makes it not just a ticker. um you know I have a ticker I can sell you as well right but that it doesn't right but um I think the important thing from this is this is the opening of like the floodgates right obviously Hyperlid was um the biggest platform I don't think there's that many um bigger than it but we're already actually um talking to a few other both chains that have not yet

launched uh for issuance um I obviously can't reveal their names but uh also other platforms that aren't chains but have wide distribution. And so um actually before the hyperlquid vote even ended um there were uh so many that that hit us up but then two of them were very very far along uh with and one of them is about to be a done deal um thankfully. So I I think you guys will see that and I think from a factual perspective this will happen a lot obviously like Fraal win bunch of them Athena did uh mega ETH right the um mega USD uh there there will be there will be a lot of these and I think the most important thing to take away from this

is that the issuers that are the best brands the most reliable that have the best infrastructure uh they will be the ones that uh benefit from this and are able to work with large distribution ecosystems and everything. And uh I guess the second thing is that um I'm very excited to see how uh Native Markets does uh and and how the whole thing goes in terms of um the plans that they have. You know, we we'd love to work with them um at FRA in terms of the the DeFi integrations. FRAUSD, like I said on the show here and also on space, we're coming to Hyperlquid anyway. um in fact we're like building out our

infrastructure to do that. So um that's not going to change. We're we're very close to actually finishing that that uh build out as well. So there's definitely a lot of opportunities there. Um I think since Native Markets was uh such a native team uh on on Hyperlid, they had a lot of community uh recognition and and buyin. So I'm interested to see if there is a lot of um you know extension of like hand to build with you know new teams uh cuz like one one thing about the whole saga was like okay the this the native market team knows the hyperlquid uh you know ecosystem better than everyone else. Fine, great,

fantastic. Uh I I accept that. We I think everyone uh you know, Athena, Maker, Sky, you know, Paxos, they probably would agree with that, right? But I think there's a lot of things that that uh we know in terms of like DeFi, flywheels, the the ability to actually build liquidity in all this area that is very complimentary. So um we'd love to have that conversation and see where uh they think that, you know, FRA and probably others can can fill out. So, um, but other than that, we're already doing our own, uh, issuance partnerships that I think we'll announce very soon.

So, we're excited about that. Very cool. Very exciting. And Sam, just kind of on the on the USD note, one last thing for you and then I really want to talk a lot about FRA, FRANET, what your vision is, how you guys are are planning this out. There was um, USAT came out as well. So, Tether came out and announced that they're going to have this USA token. USAT. It is their their domestic US stable coin. Uh Bo Hines is going to be leading this charge here. Um I'm I'm sure you've met Bo at some point in your runins in DC or in Las Vegas or wherever. Um and you're also, you know,

been working closely with the stable team, uh which is a a basically a a blockchain for Tether. What is the what is the status of USAT? Why is this you know let's just start there. What what is USAT? Why is it important? And then I think like the the real question is like is this thing going to eat circles lunch or not? Yeah, that's a good question. So I I was actually in in New York uh on the launch uh like last week on on Friday. Uh I was with um Paulo Bo and uh the Caner guys. There's a a lot of um others there. uh that they that were invited Anchorage.

Obviously, this issued through um Anchorage Bank and uh I think this kind of basically solidifies my thinking of everyone that is like a major like player in the stable coin space, they will have to issue a genius compatible stable coin, right? they they will have to actually uh do because the the market is a 20 trillion dollar market and to just be entirely absent from it is is is not an option, right? And so um I'm interested to see how the GTM is. I I'll be honest that there wasn't that much in the in the presentation uh given in terms of GTM. It was basically uh the the announcement and everything and I

think that it'll move fast. I think the first issuance um when I when I asked uh Paulo and and some of the Anchorage guys is like slated for sometime in November or December. Obviously the these are tentative. I'm I'm not in any way affiliated. So um but that's pretty fast, right? That that is a um very big turnaround if that's going to be the timeline that they hit. Um, I think where these stable coins fall in line with each other is going to be the most important because I was just thinking earlier today if rates go to zero or or near zero like some some insignificant amount, right? Um, the entire underlying economics of how stable coin issuers

make money will will change, right? And so how that affects GTM, the ability to share yield when there is no yield, right? Um, who benefits the most? Will will it be Athena that benefits the most because assuming rates go to zero? Uh, probably there's a glorious bull market. Uh, I but that's not also a given, right? You can have stackflation, right? So like the the just examining all the possible scenarios, right? The the worst scenario for example for Athena would be zero rates but no bull market like super stagflation. Uh then that would be utter disaster, right? like like the carry uh yield is is is very low, but then everyone's like, "Holy what's

going on?" But then the T- bill rates are also very low. So, it's like hopefully that doesn't happen, right? But we're going through all of the the different uh things, right? It could be the glorious super cycle uh this time of stable coins, right? Low rates, all risk assets are are rising. Uh everyone is rich. What was that New York Times article and the the ICO? Everyone is getting rich and and you're not, right? Like it could be that that that would be great. So I think uh everyone's uh stable coins will grow because the because the purchasing power of the dollar goes down, right? So you need more stable coin supply to actually trade against all of these uh risk assets that are increasing in value. So everyone will get like all-time highs or growth and and get crazy P& multiples.

Um or there could be some mixture of you know in between these things and it's it's hard to know right. And so the I think the best uh outlook is which stable coin issuers or projects are best positioned no matter which of these situations happen, right? Because we we don't we don't know which one of these situations will happen, right? And so for example with uh FRAUSD, it's a genius compatible stable coin. We're building a full integrated uh stack with Fracknet that has payments that has virtual cards that has uh other integrations with onetoone mint and redeems with with banks, virtual bank accounts and wires. All of this stuff

that makes it extremely useful as money regardless of what the uh interest rate is, right? We do have a uh reward program, but then we also assume that these rates go to zero, right? T bill rates are zero. So the the rewards there are like zero. We also have uh one of the best DeFi uh yield systems too when you can stake your FARXUSD in in the SF FRXUSD both earn benchmark yields including uh carry trade strategies CDPs right the the the classic benchmark stuff right like maker DAO FRA Athena we have that uh as well if if things go in that direction then the last thing is if it's a more infrastructure uh provided

thing where you have to issue for partners, right, that have distribution. We're in that game and uh making deep progress, right? So, it's ma mainly like where are all of these things uh growing in what categories and what verticals and which projects are going in all of these and having success. So, for example, um I don't think as far as I know like state uh circle has an issuance platform, right? it is just USDC. Um but we know Athena does, right?

They they were another uh proposal. Um we know Agora does, right? They have an issuance platform. So they are also uh live players in that area. And um we we know that Tether doesn't do uh yield share in any way case or form, right? So I was actually talking to Paulo about this. He he was like, "I would love for uh rates to go to zero because it would crush any uh competition or talking points against Tether. It would just be a total uh domination, right, of of the field by by Tether." Um that's that's one way to think about it. I'm I'm not sure if uh I think he's right.

Obviously, they would benefit in a lot of ways, right? Um but who knows, right? Like maybe maybe it's zero rates and stackflation then um then what happens? So, I think we'll we'll have to see. Uh we'll have to get Arthur Hayes on, right? Uh we will definitely will. He talks about yield curve control. Tell me uh Yeah. Yeah. Yeah. Yeah. Tim, tell me how um uh you're different from Athena's design or other yield balance stable coins like obviously uh you know, Superstate is is a big part of of the FRXUSD design. Um what is the state of or or kind of what is the Yeah. How is FRAUSD going to be different in an environment where each

of these, you know, scenarios play out? Yeah. So, my my view and and and theory on market structure is there's basically two uh types of stable coins. There's the regulated genius basically riskless as much as possible economically. uh digital dollar that is a payment method, a settlement uh me you know currency and it it is actually things that you know you can borrow right you can lend this this asset and then there's uh DeFi unregulated permissionless yield bearing stable coins things like uh SFRXUSD or SUSD or SUSDS right um and these are the only two

things that that if you fast forward time actually will exist all other things will uh go not go to zero but their their market share will drop as a function of these two types of stable coin assets. Genius yield bearing DeFi stable coin. And lo and behold, that's what we have. Genius and and and uh yield bearing uh benchmark strategies. The these are uh the benchmark strategies for SFRXUSD is our system which FRA invented and we're we're famous for. When you have this underlying backing, right? You programmatically push the protocol and liquidity to the um most blue chip but best yield adjusted uh risk adjusted yield venues, right? like a oiler fraen uh curve carry trade um you know all of

this stuff right and um the thing is there's this kind of interesting weird middle ground where uh like for example USDS or USDE right where it doesn't bear yield obviously there there's there's token rewards for these right but it doesn't bear yield like like natively and it's not regulated right like like literally legally banks or institutions and things like like credit cards like Visaet like these things they can't use it as as settlement media it's not like they don't uh even if they wanted to they they they can't literally and it bears the risk of the underlying balance sheet right um I think these will over time go to not zero but lose market

share to the the the genius compliant payment stable coins and spicy yeah and and and but credit to Athena that the reason they have USDTB right and they're uh issuing it with Anchorage to make it genius compliant is I think uh guy and the team who are absolutely brilliant um they they know this or I think I I think he would agree with certain parts of this I think they obviously have a slightly different strategy but the point is they clearly see this delineation right and and and they clearly see the fact that uh they are the market leader in yield bearing stable coins Like basically most of the the TVL in and defi a pendle Athena is like the the commanding thing of yields

like kind of how fra curve convex was in the in the def right and so what my view is is that okay that was curve convex fra last cycle a pendle athena this cycle what is the thing here what is the 2026 uh thing here can uh frack with sfrxus USD the yield bearing system and then also it's uh genius compliant for axd can we uh leaprog back into being the commander of the the entire uh infrastructure clearly it's it's not the same thing every cycle by by the sheer fact that the the defi

cycle was frag curve convex now it's pendal athena um and I don't think it'll be the same uh next cycle you know whether it starts early 2026 or or or now right or or mid Um, I think that the the the main meta is changing and um I'm really excited to uh make sure that FRA is at the forefront of it this cycle. Yeah. And it seems like Tether is prepared for this with USAT, USDT, but one is going to be genius compliant, one won't be. Um, you know, I suppose same with FRA. And then when you kind of uh zoom that out even towards uh the bigger problem at hand here Sam is I saw a tweet it was like the new L1 fragmentation is stable coin fragmentation right

and and so I'm curious how you think about that at scale right so let's say you know obviously all all these some of these stable coins will be used for domestic use and then international use is that just the right way to to think about how it's going to be like uh separated or how do you kind of view the actual usage of you know the genius compliant and the more yield bearing versions within the US outside the US and then how do you kind of see that fragmentation situation happening? Yeah. So I think there will be a short list of real money uh genius compliance stable coins and what I mean by that is there will be a short list of stable

coins hopefully fraud is one of them that's what we're trying to do uh where and and probably it's going to be USAT given tether's reach but they are widely accepted as as money across wide swaths of payments uh services, institutions, banks like Visaet, Mastercards, Settlement Network, they'll they'll settle in these things the way they currently actually do with USDC. Um, and then those will have onetoone liquidity against a wide set of branded uh stable coins. You could think of them like Walmart USD, Starbucks USD, you know, I don't know, um, uh, whatever is is like the the longer tale of these things

where you're not obviously going to buy something at Costco with Starbucks USD because it's not in Costco's interest, for example, as like a big wholesaler to accept that. So there there's no even reason or integration or communication between these these two distribution channels really, right? And so what these branded stable coins and the longtail will be is they're more similar to tokenized gift cards, right? They're just a new architecture. They're just a new structure, right? And and so the they they'll be better than gift cards. They'll be composable, right? You could kind of like do stuff with them or swap between them. But what people will really hold as real money in between spending between all of these different places is the short list of genius compliance stable coins that are liquid

that are money that are useful in both decentralized and traditional finance and there won't be that many of them and and those will be in the next uh 5 years as as you guys said with the three trillion you know estimate from uh Secretary Besson those will be those few will be what the three trillion is mostly composed of right it'll be like 80% of the money uh genius compliance stable coins and then the rest of the 20% will be the genius gift cards essentially is uh is the way that I like to think about it and so how uh each of these money like stable coins solves the fragmentation problem make sure that they're onetoone accepted everywhere so

like for example with FRAUSD one of the things we're focusing on right now is making sure as many of these new uh visa card products, other card products. We're talking to um a few issuers that I I can't say today, but we're talking to all of these payment systems so that they have full usage and settlement of of FRAUSD, so it's as good as money. The way that USDC right now is in like Rain Cards and Ether Fi and Pay uh and all of these places. And the second part is making sure banks uh actually accept the the short list, right? Banks aren't going to be like we accept 580, right?

they're they're not going to be a genius compliant like come deposit your uh Starbucks USD, Walmart USD, you know, uh etc. there, right? There's going to be like five, right? And we want to make sure that we are uh one of those because everywhere else accepts it and so the marginal utility of the next place that accepts it is even higher for them and for us and then you get this network effect that's very sticky, right? And there yeah that Lindy effect will continue to grow as the adoption for those the ones that have a seat at the table that are classified as money like you're saying uh is going to proliferate as the network effects expand. And so you're starting to kind of place your bets on both personal but also FRA. You you're an adviser to

stable. They're plugged into USDT. Obviously FRA has its own FRA USD uh stablecoin product. describe how these things work together given that you're kind of the shelling point between the two. What would you say is the composability layer for Tether and FRAUSD to work together? And then generally the infrastructure that is underpinning both of these stable coins. What is the composability between the two? Yeah, that that's a good question. So there's there's a few things I'm not allowed to say uh because of what the the stable team won't let me say, but uh they're they're very bullish. They they'll be announced in like a I was going to say that sounds bullish, Sam.

Uh pre-eposit campaigns and stuff, but I I can't I'll get in trouble with saying it. But um we'll have we'll have you back on. We'll make the announcement then. We won't we won't give away all the alpha. Oh yeah, definitely. Like uh I'll I'll come back. I think um Matt, who's the the CEO of Stable, he he should uh come on and uh it it'll be really fun. But the the the actual like answer and and on like a high level is there's certain things that that like Tether does it at size that zero other entities in in crypto do. They have 500 million users worldwide across completely different geographies. And uh that is just so powerful because if you think about like the onboarding problem, right? Like

there there's always this thing of like oh how do we get people to exchange their cash for whatever? It's like okay there's actually if you use a blockchain that has tether as gas you don't need to onboard 500 million people they're already onboarded so like you can actually uh directly interact with them and then uh tether it's it's in tether's interest to promote that chain to its 500 million users of uh of tether across the entire world right lad middle east asia and so the the idea is that if you can have infrastructure for those 500 million and growing people, then you can build the other things like deep liquidity on this chain, DeFi, uh other

yieldbearing stable coin options, right? All of these things that we've always assumed is is positive sum and we've we've seen that the more liquidity there is between these like stable coins, the more places you can lend them, loop them, the the larger the piece of the pie becomes for everyone, right? And so Tether is basically this huge huge onboarding uh like cheat code, right? And every single day, Paulo actually shared this in New York, every single day about 300,000 uh new uh Tether users is expend like they they obviously estimated because these aren't all civil, right? But but around 300,000 uh new users of Tether is uh is onboarded across the world. That's

absolutely insane, right? like that that is uh it's it's in I don't even I don't even know uh like if Binance or any I don't think they even have that that level of reach, right? And so um this is like a pretty big hack, right? like for onboarding and and getting exposure to uh new users, especially users that genuinely are using like crypto like stable coins rather than looking for like airdrops or or yield and and these things. And so the the the synergy here is who's going to be leading the DeFi on stable? Who's going to be doing that kind of stuff?

and then all of the new people that are going to be using this chain will then uh have a gateway to the onchain world uh in the the stable ecosystem. And so we're um super excited to make sure that FRA is one of the all stars there and hopefully in a few weeks we can um announce it in in a in a very uh big manner without me getting in trouble. Introducing extended exclusively on Stark, a nextg per trading platform live today with 50 plus trading pairs from crypto to tradi. You get the best experience on chain today. Deposit in the community vault for attractive returns compatible and engage in unified margin spot trading lending and per

trading. Yeah, definitely. Sam, um, you know, one thing that stuck out to me in the way that you're thinking about this design is first of all, you you're You're not trashing any competitors. You're being very real, objective, straight up. And you're building FRANET in such a way, if I understand correctly, which I, you know, I think our audience really would appreciate an explanation here as to the thinking in such a way that you can benefit as a network, as a FraUSD, the asset pending uh you know, some some execution things, you can benefit from the growth of Tether. can benefit from the growth of these kind of as you said uh like a Starbucks you know uh loyalty uh credit

type of uh stable coin you can you can you can kind of be a place where a lot of these different assets coales and still bring a lot of value directly to FRXUSD as well as the frack network. So, I think you're being very cognizant in the way that you're seeing this play out and and the reality of and when I asked Jeremy from Circle about this yesterday, his response was just that look man, you can use um Google Chrome on Apple now. You can use Apple TV on your Samsung TV. These technologies are just going to be, you know, mish mashed coexisting across all different forms of smart wallets, smart TVs, smart refrigerators, phones, iPads, computers, etc. Right. And it's

going to be this in this very diverse ecosystem as some other technologies are. And so I think it's helpful to understand your your vision that you've laid out for the types of stable coins, how you see them growing, what the next kind of idea is as we've just discussed. So I think it's a good time to kind of understand why you feel fra is well positioned to dominate in this world, right? So why is the fracknet's design specifically meant for this vision that you're seeing play out and how do you kind of view yourself and frack kind of capitalizing on this uh you know next couple years with with this design?

Yeah, for sure. So that that's actually I loved what you said Jeremy said and I I'll weigh in on that too. So Fragset is basically a a fintech app uh just oneliner and it's supposed to just replace ever needing a bank account ever again. Obviously you can have a bank account but what it is is that you can make make wires you can spend um FRAUSD in uh Visa cards virtual cards. You'll get virtual uh bank accounts for wires uh that people won't even know that they're sending it to your fra account, right? It'll be a it'll be a virtual account with a um bank routing number and and an account. You'll be able to mint and redeem FRAUSD by all major stable coins onetoone like USDC, PYUSD, USDT, uh Stripes, USD, right? Um and

then more, right? And then if we issue your stable coin, uh your your stable coin will be there too. So literally everything I'm talking about, uh you immediately get um all of those benefits. your stable coin will be spendable on cards. They'll be able to you'll your users can sign up for virtual accounts. They'll be able to uh mint and burn them on 20 plus chains that were uh already on, right? All of the the plethora soon hyperlquid uh as we said and so it's a very very powerful way of moving cash around and uh like you said abstracting it out. These are just technologies, right? You can mint it on uh hyperlquid and move it to base and or or to Solana and then or you can burn it for USDC or for wire or this and

then or or load it into a Visa card. And then there's um obviously the uh reward streaming uh aspect of it whatever the risk-free rate happens to be whe whether it's one four whatever five when you're doing all these things um this actually gets streamed to uh your Fraal chain fraet account. So you basically get a savings account on on our Fraal chain. Uh and then everything that you hold on all the different chains, you just get streamed the risk-free yield. So you basically get a savings account on our Fraal chain. And so um that's basically if you think of it, it's like a super app, right? And uh and there's obviously um an SDK and API. So you can actually uh hook this into whatever app that

you're building, whether it's onchain or offchain. if you want to redeem FRAXUSD accepted onetoone um make sure that if you hold it in like a DAO treasury you're getting the uh risk-free yield streaming or any of these things right and so it basically brings all of the utility uh that you can think about um to FRAUSD and any any stable coin that we do issue right if if we do issue like you you'll be literally in the same um fraet infrastructure and that's obviously really needed because otherwise this is just like uh you know the this the stable coin will like those tokenized gift cards, right? There's only a very narrow certain sense that you can use them. And so, um, in terms of the, you know, positive sum view that I've always evangelized and everything,

um, I'm really happy to see actually Jeremy said it even better than me. Uh, I love the way that he said it where, you know, you can you can use, uh, Apple TV streaming on your Samsung or LG TV. you can, you know, use Google Chrome on your Mac, which is what I'm currently doing right now. And yeah, um the that's a very good point because like look, Arc is going to Circle is going to launch ARC, right? And they're also on base, right? Does that mean that uh you know, Circle and and and Coinbase have beef?

That would be absolutely crazy to think that that they do. they obviously get value out of working together and increasing each other's uh value market cap and and the ability for them to solve people's problems, right? And in their own ecosystem and so uh I've never believed in the negative some way if if both sides agree on it, right? So like I'm I'm not I I the three, right? Yeah. Yeah. Exactly. it like if if the other side doesn't want to do like like this in positive sum, right? If they don't want to do integrations or or like onetoone redeems or what whatever their infrastructure stack is, right? Like if if LG bans like the Apple streaming like

you know app or something, right? If if like the Apple um breaks compatibility with Google Chrome, that's not positive sum, right? So it's like it's not like it's always uh you know happy you know hugs and and stuff like that but until there is good integration at at all times there's always a path that maximizes value for users and both sides um and I always search for that uh from the very beginning. Now what's interesting is there is going to be uh tussles and and things I mean there is for sure I mean stable and plasma do not like each other. That is a fact. Plasma think stable is just like the copycat. Stable's like we're going to do what you can do better. Like that like that is already going to

happen. Yeah. I uh I'm uh you don't have to comment on that, but I'm just I'm just saying that it's going to happen or it is happening. Yeah. More insane backstory than whatever uh each of them say publicly, but I'll definitely get in trouble for for that. We're not going to talk about that. But competition's real. That's the reality where it's a big market that we're going for. It is a blue ocean. It is a new market. It is. And the US is all in on it. So there there's a lot at stake and when it's high stakes it's competition. How do you kind of think about that? Yeah. I I think like first of all a lot of things in the US like like like like banks or entities or even startups and stuff they they actually aren't exactly sure where they're which area they're

even competing in currently, right? Like they everyone's kind of trying to figure it out so to speak, right? And there's there's a lot of opportunity to uh create like like value like issue someone stable coin so then they can go do what what they do better than you do right uh they can go do the thing that is their strength and they can use your infrastructure for what's uh what what you're good at right like the stuff that we've built for fraet and interconnected all these features that's not easy to build that that's actually the the reason it's it's taking so long is like if someone else had that we would just be using it ourselves, right? We would just actually be uh using that as as like a uh a white label solution or

something, right? It's it's very very difficult to build because it takes a lot of uh technology that's like integrated like crosschain messaging, banking layer, card spending layer, uh all of these relationships between different issuers. So you can mint and redeem between them at onetoone or allow people to connect their bank account and and burn FRAUSD for a wire backwards etc. And so the the the thing is there's so many layers to it that yeah uh the opportunities are are basically wide open but in the next one year in the next 12 months I think what'll happen is like as battle lines are sort of drawn a little bit right like

tempo versus arc versus stable or plasma or whatever um then we'll know which area they're all competing uh against each other. I don't think it's very clear right now. Right. Right now it's not like like a very clear map. Yeah, it's it it's too general to really get a nuanced view on where each of these companies has an edge. And none of them are launched yet too, Robert. That they're just all all in, you know, pre-made as far as the chains go, right? The issuers obviously are launching stable coins left and right. What we what we haven't seen so much is the Walmart stable coin, the Amazon stable coin. And something you were talking about earlier is like look, Fracknet kind of removes the need for a bank. You can still have a bank if you

want one. We don't need one. Well, these banks aren't just going to go quietly into the night. They're going to try to fight and compete as well. And so what's now in this new economy, what's their edge, right? Like they didn't want some aspect of genius to offer yield and and there was kind of going back and forth on the genius act. And so I'm curious on a certain level all these stable chains and stable coin companies are working together and then you have because they're all the new guard and you have the old guard which is all these banks and then on another level there's kind of the infighting that happens. This happens at DeFi at large and and across several sectors in the industry. And so do you do you sort of and maybe this

gets into the composability? Maybe you can't talk about it so much, but how do you view the competitive landscape? Is it similar or different the one that's kind of internal to the stable coin and the stable chain industry and then external when you look at the traditional bank banking competitive landscape? How how do you are these kind of the same or do do you view them differently? Uh that's a good question. So, you know what's actually would be really funny is that uh if this the yield clause you brought up like that's the thing that's like the tip of the spear for like attacking like like genius uh stable coins. It would be so funny if like yields went to zero so they don't even have that as like a as a as a way to fight them and then they still get crushed by by stable coins. Um I I think

there's a good chance that that that'll happen. It's like I think that that answers your question, Rob, but there it is. Doesn't have to say anything else. That's it. That's the takes D5 for the win. Yeah. Well, I I think I think that's exactly it also crushes it also crushes the stable coins that are not positioned to capitalize on a low rate environment. So then you sort of have this other dimension of competitive competition where it's companies whether they're traditional banks or they're new neo banks in DeFi that are positioned for a high rate environment and then ones that are positioned for a low rate environment. They might be traditional or more part of this modern era.

Yeah. Well, if if you think of if you think of like genius like fiat coins, they can't do anything with the they can't massively hypothecate the the underlying. So, they're going to have to find uh other revenue streams, right? Like mint and redeem fees or or like control the settlement, right? Whether it's their own chain or like cut deals with uh specific other chains or payment providers. And I think like the the important thing is if you don't have moneyiness, right? Like if if you if you literally do not have moneyiness where people actually come in and out of this and use it for real economic activity uh during low rates, you can't even

monetize your distribution because you don't get anything from from treasury bill income, right? So like it's actually um it's it's actually good for the issuance business like like FRA or Agora or things cuz we can issue we already have the infrastructure and even if it doesn't make a lot of money for for the for the brand like during the low rate environment they have it so that they can continue to use it. It's not a song cost. Like imagine if you had to actually do all of these things uh in R&D versus just literally letting us do it with a push of a button, right? So, it actually makes issuance as like a a service um much more veable because it's like you you can literally outsource it to people that know what they're doing and then um figure out the right way to

monetize it because you can't monetize it with with T bills or or hypothecation, right? And so um I think the other question is what is the actual macroeconomics going to be? Is it stagflation or is it uh is it glorious super cycle? Because both banks and DeFi have very different uh like modus operandi of like what they do in that those kind of uh economic times right like if it's super cycle everyone pack into like SRAXUSD or Athena SUSD and and just just print right like the the the yields on those yield bearing stable coins will be like 20 30% or I think Athena hit like what 38 or 9% I

think at its highest like uh epoch rate Absolutely insane, right? But what if that's not the case? What if the case is that the like economic activity slows down? I think that's actually literally what Jerome Powell was quoted as saying today, right? The economy is slowed down. That's just code like different way of saying stackflation, right? And so if that's the case, if the Athena or the SRAXUSD yield is like 3%, right? And then the treasury yield is like 1% or 0.5%.

What do you do with your your dollar capital? And then also what what exactly is the are the stable coins that benefit the most in that situation? I I'm I'm interested. Well, hopefully we don't find out because I don't want there to be stackflation, but if that happens, I'm interested to see how it pans out. Yes, Sam. I think I have a a really kind of more a question that's more on the philosophy side to to wrap us here. Uh come to a close. No, no rush. I don't know your schedule, but what you're saying here is describing where we're at and what feels like we're, you know, each year passes, we get closer and closer to uh this like fiat experiment that the Bitcoiners will tell you was, you know, doomed to fail from the

beginning. feels like we just get closer and closer to uh you know this this kind of experiment going wrong in some way and I'm not going to be a doomer here but the reason why I bring up this context is because I think it's important to understand from the highest level in the US government that they are trying to prevent the stagflation scenario deep depression collapse etc at all costs and by doing so there are they are looking at all of their options And in one of their, you know, the in one of their hands of cards, aces of spades, we're looking at stable coins. And they see stable coins as a way to extend the US dollar's regime globally, to extend

the demand for the USD globally, to create the digital dollar, to fight CBDC's as well. And so when we're thinking about stable coins right now in this macro sense, we're looking at them from a purely economics perspective. I'm curious what your take is on the more geopolitical power perspective that stable coins are playing right now. It feels like a small amount, but I could really see this being a big part of the US's economic plan with regards to the deficit with regards to uh you know kind of just generally extending their power.

Again, very broad here, but what is your take on the more geopolitical power that stable coins have in today's world? Yeah, I I actually think about this a lot because I I try to be like way forwardlooking and I think that there's a few different schools of thought, right? I think Arthur Hayes is like the yield curve control like like era is coming because they need to uh the the US government needs to be able to borrow at like 0%, right? And and the the the uh current payment interest on on the massive debt is way way too much. So, they need to figure out some funny way I love his writing with all the jokes, but like basically some funny way of like moving jiggling the Microsoft Excel

sheet around where like they're basically paying deacto nothing, right? On on like they they basically um wreck bond holders, right? The other way is this, in my opinion at least, this stable coin uh maximalist view where if you actually think about who holds like currently who holds treasuries the most in the world, they're they're sovereigns, right? It's like it's Japan, it's it's China, it's uh European countries. And for the first time, very large stable coin issuers like Tether hold very very very large amount of treasury bills that are essentially decentralized and and tokenized among all of uh USDT's holders, right? Like they're basically when you hold USDT,

you're basically holding uh treasuries without the yield, but your ability to zap them to any computer and anything in the entire world as a form of payment, right? And um I think that that is where they're getting their strategy is if they can actually decentralize and distribute the holdings of treasuries, right, to pretty much everyone on on Earth, their ability to borrow is is much cheaper, right? Like if you actually I think I think uh Paulo said this or or someone I don't quote me on it but he someone said specifically if you go around to every single country in the world and you actually ask them without any repercussion in your laws or something. Would you rather hold the the

dollar or the national currency of of your country? I think everyone would would pick the the dollar. Almost everyone. I don't know maybe Switzerland they this currency is super strong but um everyone would pick the dollar right and how do you actually execute on that right there there's the the the fact that if this is a true like statistic right assuming it is how do you get the dollar in every single person's hand because that would really really really help uh borrowing costs for the the US obviously it would be bad for other national currencies as they get displaced so there's going to push back, right? There's going to be central banks that try to limit the amount of USD stable coin holdings, like stable coin

capital controls. Uh it'll be even more impossible to do those compared to even the current like analogy capital controls. Um and and so especially with like decentralization, uh privacy preserving transactions in in some of these blockchains, right? Um and so it's it's not going to be possible to fight it, but they they will uh fight it, the other countries. And so if the strategy is not yield curve control or maybe it's a combination of both but if the strategy is the stable coin maximization of uh the entire world the USD stable coin uh maximization then the treasuries become very cheap for the US to issue and so they need to tap into

that and I think obviously the current administration believes that um I hope that uh whoever whether it's this administration another Republican or Democrat or whatever administration is that they also realize how powerful uh of a strategy this is. If we can do it as as the United States of America, it'll actually cement US financial and geopolitical dominance for at least another 50 to 100 years uh unquestionably if it can be executed properly.

Sam Casmin Frack OGD DeFi Curve Convex Fracks we got double, we got dual wielded stable coins coming, Robbie, we've got genius compliant, we've got yield bearing, we've got Sam in the house with Paulo and Bohind just absolutely just grinding behind the scenes to bring crypto to the mainstream. Stable coins have done such a great job of changing the perception of our space. Um, there's a lot of interest. This is going to be one of the best stable coin shows, if not the best in the space. Stable Dash is interested. This is going up on their on their site. We're already collaborating there. They're going to push more. This is going to be a hot spot for really, really important conversations over the

next 6 to 12 months as this space evolves and longer. Sam, we're stoked to have you on to kick us off. As you can see, we're still putting the nuts and bolts together, but the, you know, the foundation is here. This was a great kickoff conversation and we are really looking forward to executing on this show being a part of this stable coin growth with Fracks with our other investments in the space venture and liquid and uh man I mean what a time to be alive first rate cut is on. We'll see how the market reacts and there's just going to be a lot of moving parts and pieces and you know no one better than yourself to navigate predict and see the vision here. So we appreciate your time today Sam. Uh, it's been a three-hour

stream for me. I'm starving. Probably need to, you know, stand up, get some blood flow. So, I'm going to let you go. Rob, as always, been great. And yeah, guys thanks man. Thanks. Congrats on the show, guys. And see you soon. All righty Sam. Thanks, Sam. Peace.