Coinbase and Stripe bring USDC on Base to merchants

Transcript

GM good morning welcome to the milk Road show The Daily crypto show that's as irresistible as a buy one get one free deal I'm your host Jay Hamilton and today we're telling you everything you need to know about the coinbase and stripe partnership which could bring Stripes 1.3 million Merchants processing over 1 trillion annually on chain this is freaking huge joining us today to break it all down is Tyler D who once tweeted 300 times in one day Tyler welcome back to the show Jay GM it's good to be back reporting live from Indianapolis Indiana We're visiting the gall for the weekend but happy to take some time away to talk about this big

big story I love it thank you for taking the time all right let's jump into first up start with the news can you break down this partnership for us let's do it so blast may have been in the headlines more this week but it's coinbase and base which have made the bigger Splash So Yesterday coinbase announced a major your new partnership with stripe the goal of the partnership is to increase onchain adoption and provide faster cheaper Financial infrastructure so what does that all mean the partnership has three key components stripe is adding usdc on base for its crypto payouts so base stable coin payouts on stripe that's part one part two stripe is also adding usdc on base to its Fiat to

crypto onramp so you'll be able to buy base stable coins via stripe and then part three coinbase is part of the deal coinbase is going to add stripes Fiat to crypto onramp to its smart wallet so stepping back higher level Stripes huge Global Network now has access to cheap and fast money transfers via base coinbase's user base gets to take advantage of Stripes infrastructure within the coinbase wallet allowing instant buys via credit cards and apple bu like this is the news that is such a big deal but it's not sexy like speculating and price price action is so nobody really we don't talk about this stable coin these like Payment

Processing use cases a merchant saving 3% like we're not talking about that stuff enough but people are missing the forest of the trees here because this is we're gonna stick around to the end of this episode we're going to tell you guys why this is such a big deal why it matters how it's going to bring the next 500 million people on chain that's going to get us to a billion and why it's going to happen faster than you think but Tyler let's just take a pause here stripe this isn't strip's first time on chain building on chain can you get us a little bit of a history lesson of what strip's been up to yes they've got a long history but the the story picks back up in April of this year so after being out of crypto since 2018 when stripe drops support for Bitcoin and

crypto payments all together they made the surprise announcement they are re-entering the crypto game and will support Global stable coin payments so this was huge news this meant that businesses using stripe will now be able to accept usdc so stable coins with onchain settlement and then they will receive Fiat or US Dollars on their end of the transaction this was a massive unlock for strip and 300,000 plus integrated Partners around the world so how this will work stripe ends up taking the crypto so the the stable coins and settling with the business who gets the Fiat US dollars in this example effectively meaning that stripe is

the usdc here the payment rails will be available on salana ethereum and polygon with the business and or the customer able to choose their rails and then the roll out will begin this summer um I think for me initial reactions the biggest part of this announcement wasn't that you can just pay in crypto it's that the seller can receive Fiat so they don't even necessarily need to know that they're being paid in crypto so even if they're anti- crypto it doesn't even matter uh which felt pretty big yeah you're right because one of the the biggest hurdles here is just teaching people how to receive crypto and what to do it do with it and how to have a

wallet and so if you eliminate that then why wouldn't you want that and it's funny also you mentioned strip wants the stable coins I bet because they're sitting there saying great if we get stable coins we can collect yield on those stable coins which is a massive unlock for them a imagine the amount of stable coins they could hold can't that would be a huge Revenue stream for them just to hold those stable coins let's just take a look at Stripes metrics quickly uh just to put into perspective how big stripe is so I've got up uh here their annual letter to shareholders which went out in March uh so just a few months ago uh and they say strip's mission is to grow the GDP of the internet we all know here the internet

the future of money on the internet is on chain so they clearly see that this is the future and just to give you an idea of the size of stripe collectively move one trillion in total payment volume each year this is actually in 2023 they moved a trillion and that was up 25% from 2022 so you can only imagine this year they're probably on track to do 1.2 1.3 trillion in movement of money that accounts for approximately 1% of global GDP just to give you an idea of the scale of stripe is absolutely massive and them bringing this onchain which you

know it's not going to happen all of a sudden here but Tyler I don't know what your expectations are but my guess is is that a lot of merchants see this and they say oh wait I can get my money faster and I can pay less fees great why not the the benefits are obvious right once you sit down and actually look at it you get get instant settlement your fees are are fractions of the cost you you would pay with a typical credit card processor and then once you go the level deeper and start learning about like what you can actually do with the stable coins you know with respect to to yield opportunities it it makes the this just an obvious decision to at least make this a part of your business if not the entire you know way you do payments and

it really feels like this is the Trojan Horse for how crypto can really be adopted by the masses it's via payments stable coins with some of these companies e-commerce corporations leading what yeah and so the obvious question of that is how does an investor one of our listeners capitalize on that I'm not going to get you to answer that quite yet though you guys are gonna have to stick around at the end to hear the answer to that question uh and Tyler I agree man this is this is the Trojan Horse this is it right here this is definitely what is going to be the biggest onboarding ramp and it's not just stripe let's be clear they're not the only ones playing in this sandbox at the coinbase crypto Summit which was

just a few weeks ago Brian Armstrong pointed out that 56% of Fortune 500 companies are currently building on chain we're not seeing that yet because a lot of that has happened behind the scenes but it is coming we also have Visa Mastercard both of them doing a lot on chain they're they both have payment settlements using stable coins they both have crypto payment integration with Partners where you can use a Visa or a MasterCard and spend your crypto they both have crypto advisory Services where they're basically advising all their merchants on how to build and use crypto in your business then we have PayPal which has P py USD I hate that God damn

stable coin name so PayPal is their own stable coin they have their own exchange we have Robin Hood bit stamp at the beginning of June just a few weeks ago in a big deal for $200 million clearly signaling that they're trying to get more into the European market where bit stamp is quite large so we have a lot of fintechs that are really focused on building on chain and seeing this opportunity and that is a big deal obviously let's talk about Tyler why does this matter in such a big way and I'll tee you up with I think we have four reasons and that we talked about earlier today is this matters because stable coin usage is huge it

matters because crypto payment processing is better than Fiat payment processing it matters because this is the moment that we might actually finally be able to help the world go bankless let's let's break each of these down for a minute first I want to talk about uh stable coins and I'm G to show some charts here that are just going to blow your mind man first up I've we got this chart up on screen that shows that today stable coins represent 55% of all blockchain activity and handle more than3 trillion in monthly volume so just to put that in perspective Visa handles $1.2 trillion in monthly volume unbelievable it it's staggering I think so many of us get caught up in like the

speculative use cases of crypto and the trading and investing but when you take a step back and look at this you see what what the real use case is it's payments and that that's that's a good thing that is that was a foundational use case of crypto like the ability to send that was what Satoshi wanted it to be right exactly the ability to to send money and crypto form on chain anywhere in the world without anyone being able to tell you no and to be able to do it instantly and now more benefits are coming out but I mean it's just staggering there's it's just such a positive for the larger ecosystem and I think we'll get into that later but

stable coin growth is is one of the the most important Health metrics for this larger crypto economy and the health metric is looking pretty good yeah exactly I've got another chart here uh for those listening this is total stable coin Supply and basically shows that total stable coin Supply 2020 just four years ago was close to zero on this chart you know maybe in the in the low Millions very small and then it's just skyrocketed since then and in less than four years we're at over 160 billion stable coins globally today which is about 1% of all USD globally so we're at

1% and the growth of this if you're looking at this chart I mean the chart does dip because terona blew up and really screwed up this chart but the growth of this is very impressive to see how fast this is happening stable coin usage and maybe not so much in the US because in the US and a lot of developed countries you don't necessarily need stable coins you have good bank using your bank ways to send money but outside of the US you don't have that and that is where we are seeing most of the adoption happening uh let me pull up another chart here that you shared with us Tyler about stable coin usage in Turkey what's going on here this is an unbelievable stat until you take a look

at it but 4% of turkey's GDP is going to stable coin purchases right now just in an overwhelming amount of their GDP compared to to all the other countries in the world and when you take a step back and think about that and think about the trend it makes sense like for one it's a way to combat you know inflation of your own National currency and then you get into all the other additional use cases here uh but I feel like this number is just going to keep going up and spreading across the globe and then these announcements from Partners like uh stripe just continue to amplify and compound the signal right

all the major corporations are just making this easier and easier well and what is the announcement from stripe enable as you mentioned it really enables two main things one is that you can get paid you can either get paid out you can either receive payment in usdc on on your website but then decide to get paid out in Fiat so you don't ever see the crypto or you could decide to get paid out in the stable coin and receive the stable coin yourself and as a merchant when you think about you're a you're a business and you have to wait you know 3 days to receive the pay out of your money or

five days and then you also have to pay all these fees on top of it like why would you want to do that it's slow it costs money oh wait I can do it faster and re it's a no-brainer why wouldn't you want to do it a different way of course and then the the next aspect of all this is that while you're you're holding deposits you know waiting on things to be processed on chain you've got the yield opportunity on top of this right which can be easily upward of four to to 8% or even higher you know depending how how out on the on the curve you want to go with it it just feels like the most obvious thing that is happening to the financial system that just we're not talking enough about

because like I said before it's just it's not as sexy as speculation and trading nfts and memecoins uh which is uh much more exciting in many ways but also much more risky uh okay the final question here really is you're a listener of this and you're saying okay great coinbase partnered with stripe and stable coin usage is skyrocketing but what does that matter to me as a crypto investor how do I capitalize on this opportunity what would you say Tyler for one I me coinbase has never looked stronger than they do right now and when I think about buying coinbase stock versus like a crypto major to me it's a levered bet to a degree because

effectively when the crypto markets go up historically we've seen coinbase stock go up as well but then you get all their revenue everything else that they're doing with base the fees they're generating the income on top of that so you're getting crypto growth with with a bonus effectively we've seen that in the market in the last year right in the last year bitcoin's up roughly 100% coinbase is up 200% so so there's your lever bet of course it doesn't mean it's going to continue trading like this for forever but at least for the near term it feels like wall Street's just starting to understand the income that basis and L2 is generating so base coinbase they look incredibly strong and the other the other area here this is a little more basic advice I think you did

a show earlier this week on the 8020 and putting portions of your portfolio in crypto Majors as stable coins grow in size it is a natural like segue to think that they there will be rotations and flows into the crypto Majors into the native currencies of the chains being used for stable coins and that's eth and salana and I think there's also a case be made for for rotation to bitcoin as well so I think it's coinbase stock and Bitcoin Majors it's not the sexiest answer but this is these headlines are long-term headlines like this is not a headline you can trade today you know for a fast return but it's something that deepens the conviction in someone who is willing to make a one to five to

10 year bet on this industry yeah I think it it lowers the risk on investing in the majors while increasing the reward because the use case of the majors is only growing and is only proving I mean we talked about about where does all of this happen well in the case of this partnership all of this usdc is on base where is base Bas is on ethereum okay you can't sure you can't go buy Bas as token but you can buy e ethereum you could even buy op because Bas is on the super chain and so that could also be a play here right and then also salana has the most stable coin

volume happening over all the chains right now so there you go so there's your I like you said it's not the sexy exciting hey here's a token you've never heard about but everyone stops like stop looking for the token you've never heard about have 80% of your portfolio in the majors and just sit back and chill like it's all good sure go around with you know 10 20% of your portfolio but be ready to lose it all maybe you make it big but maybe you lose it all then there's no worries or maybe you can be like Tyler D and risk risk more and you know sweat it out at night I'm sure yeah for everyone to to know I am further out on the risk curve but with the end goal of rotating all that back to bitcoin l e the the majors so like

that's where I want to end up and just maybe last comments on this announcements like this from stripe make folks who are true crypto Maxis we are approaching a world that is actually bankless the more that you can buy in the real world using crypto because of infrastructure like from stripe it removes the need to sell crypto to Fiat to fund your everyday life and up until now it hasn't actually been a reality it's been a pipe dream we're still not there yet but we are getting closer and the more this gets rolled out it really enables that that world and I think there's going to be a lot of folks who are very happy about that I'm very happy Happ about that let's go I'm fired up this is awesome Tyler thanks so much for joining us again today thanks for having me in case you missed it here's what

else happened in crypto news today first up 21 shares filed for a spot salana ETF this is the second we saw vanic earlier this week who's going to be next one thing's for sure the Salos spot ETF is coming in the future also the SEC has sued consensus the company behind metam mask for unregistered brokerage activities and security sales allegedly metamask swaps generated over 250 million in fees and unregistered staking Securities with Lio and Rocket pool were sold finally poy Market following yesterday's presidential debate saw a

notable increase in the odds favoring Donald Trump to win the 2024 election the surge in traffic was so significant that it led to Temporary disruptions in markets website currently the platform's prediction Market contract for the 2024 election outcome holds 192 million in total value of this approximately 23 million is backing Trump and 20 million is placed on Biden to win poly market yet another fantastic use case for onchain showing that people want to speculate on everything from the presidential debate to sports to everything in between poly Market is where you go to Taylor Swift that's where you can spec speculate incredible to see use cases like this picking up

steam thanks so much for listening in everybody have a wicked awesome day thank you for listening to milk Road radio the easiest path to get smarter about crypto if you like this episode share it and hit subscribe or follow so you don't miss out on the next one there's also a link in the description to our free 5minute daily newsletter where we simplify crypto for you while making you laugh and if you're willing to step up your crypto investing game then we'll leave a link to milk Road Pro as well well your number one resource to help you invest successfully in crypto one final note this podcast is for educational purposes only and nothing we say is financial advice crypto is risky so you should never invest more than you're willing to lose thank you friends

and we'll see you in the next one