ETH Rio 24 - Stablecoins: The Killer User Case | Matheus Moura, Guillermo Goncalves, Antonio Neto

Transcript

Bo H stable coins right well we have some as I said there are so many use cases for crypto but stable coins are a killer use cases one of the killer use cases if you take for example Venezuela as a country you see how that is important for people to flee the the devaluation of the currency but other than that it also connects economies markets um different Industries and so on so I'd like for you guys um to introduce yourselves your businesses um and what you're building

uh in your businesses okay hey everyone I'm Matos from brla digital we are basically built a stable coin of brl because we have a vision that Global Payments will be transacted from a connection of local payments and blockchain and to create this Vision we need to have deep liquidity of stable coins interacting with each other for many many occurrences so we decided to build the Brazilian part of it and now we are connecting BR with many potential Partners to build this liquidity and go after our

vision hopefully elor well so hi everyone my name is GMO gonalves I'm super happy to be here um I'm originally from Venezuela born and raised um I started working in crypto back in 2013 I built one of the earliest uh Bitcoin mining companies in Latin America uh co-founded the ethereum Venezuela community and have been advocating for the use of stable coins uh since the very early days and for the past four years I've been leading El Dorado which is a peer-to-peer stable coin Marketplace that operates in six countries of Latin America including Brazil Venezuela Argentina Colombia Peru

and Panama and uh and yeah excited to be here and share uh some insights about the usage of stable coins in some of the countries where we operate and um share some of my excitement uh towards the crossborder use case of uh crypto that's cool um so let's get right into it and I will start with the question that is in the in the slide what's more to it what's more to stable coins and what I mean is um we see the use cases the clear use cases for payments and so on but we are also seeing um creation of ecosystems around it so if you take for

example U Dy right of course different types an algorithm um type of stable coin but it is structured in a way where um it's part of a money market fund right you use that money to um to to take um to borrow uh usdc against your your uh crypto assets so looking at examples like this what do you guys think that there is more to stable coins where where are some of these opportunities that we don't usually see like frontf facing like cross B payments um helping people have access to it and I mean like even in Industries like

where can it this r um structures cool I I think until now most of the use case of stable coins are concentrated on trading so basically you trade and you want to get your money back and you prefer to go to usdt so it's easier to trade again or usdc then to go down to your own fiat currency and then have to offramp again it's more expensive and inefficient and also for people that wants to hold USD stable coins right in other countries uh I do think that we have space for other Curren is to have their stable coins to the same use case

but much less than to start building things for the web CH uh traditional companies as you want to say so one the first that I you already mentioned now is the the time that companies like brla and elor are building some uh incen and platforms for companies to operate in companies and individuals to operate in this will build liquidity between many currencies in these stable coin formats uh own chain and this will be used to be the killer app for crossb payments because as of now anyone using stable coins for crossb payment is basically using them banking rails converting to crypto and using the

banking rails again to off ramp right so basically you are Less in less efficient and not more efficient than most because you have to use the banking system but imagine a word that we have billions of dollars of liquidity on chain this is a word that crossb payments could do on chain very efficient this is the way we think the other thing very that people are building is those you baring stable coins everyone that uses apis here and try to go after like uh compos yields of treasure me in in a automated system through apis it's impossible to do that with the traditional Banks like even

like Banks like btg they don't have functional apis not either for the bank account imagine for the investment account so having a composable uh treasure on chain is something that could also be a use case for many many things yeah that's pretty interesting we'll get right into one chain later um because think is the next step but um what do you think about um what's more to it in in the stable coins GL one yeah so to provide some uh metrics uh into the picture I think that it's uh valuable to say that stable coins are already pretty big uh so this year we we will have over 20 trillion

dollar in stable coin volumes around the world uh this is more than visas uh transacting volume and the other side uh stable coins are playing a a pivotal role in the macro and even geopolitical uh world uh let's remember that stable coins today are the 16th uh holder of us bonds and if if that goes like 5x or 10x it's going to be pretty interesting all of us holding uh us bonds and the the the US government getting more power thanks to uh all of us using stable coin so that that's going to be pretty

interesting but in terms of next steps I believe that stable coins are the underlying technology for many other use cases and I think that a good analogy is like something like pigs once you have Real Time payments the sky the sky is the limit and you you never go back that's right so some things that I'm excited about like I'm excited for instance about local stable coins uh like the a Brazilian race stable coins I often yoke with some friends that I would love to eventually uh CH 100x the Venezuelan bolard against usct so whoever wants to build that um I'm

willing to I'm willing to be a customer I don't think anyone wants to take the other side the other side um so yeah that's one of many different uh use cases that we will see popping up with stable coins local stable coins saving products and buy now pay later and so on and so forth yeah that's cool so before we got into on chain stuff and so on you touch on a point that is very very interesting so in Brazil right now usdt is the main stable coin us it I won't remember the number of um of our Rams and deposits but it got to a point that got the government worried about the flee of

capital so uh when we look at that it it could be a function of many things but one of them is the distrust in in who who takes care of the money right so when we look at that and like Latin America is clearly a great place for it um where are you guys in the demand is coming from I mean you from your Marketplace and you from the industry like who is of course again we have people that send remittances we have these front-facing things but where are you guys seeing this demand because we see here in Brazil like there's already 60,000 CN patas like um businesses that are touching crypto somehow they have

that in their treasuries they've bought it in some um exchange and so on so um what do you guys see on that on the demand side okay I think in Brazil what we see is there are basically four big markets the first one would be uh traditional like centralized exchanges so mostly for trading use cases uh the other one is crypto startups building like many many things uh for example uh defi protocols or people selling coupons for crypto or tokenization uh they are also using a lot of this the stable coins to make their operations and also there's a lot of other Market in Brazil

that uses a lot crypto which is the gambling industry so the gambling industry is very big and they uses a lot crypto and we know that many Shoppers uh small small Merchants that sells products that they buy in China also use cryptos for settlements so this is another big Market in Brazil uh I think those are the four with 90% of the volume for at least for us today nice where are you seeing that money coming from uh in count is like how is it looking yeah I think this is where we have uh quite different use cases so uh El Dorado has a decent uh presence in countries like uh Venezuela or Argentina

and there the the number one use case is hedging against inflation so something interesting that what we see on El Dorado is that every end of the month when people get paid we we see spikes on on on our volumes on the platform and that's because Venezuelans and argentinians are rushing to exchange their local currency uh to USD or usdc so I think that's uh fascinating uh on on the other side we also have uh many people who use uh usdt for crossb payments there are over 7 million Venezuelan migrants uh all over Latin America and the US and the USD has

uh become a pretty interesting way for them to connect back uh with their with their families back home with uh paying very little fees that uh they would be otherwise using something like Western Union or maybe some sketchy like Instagram website Instagram page or something um so that that that's the second use case and and third uh we also have a bunch of uh Freelancers and remote workers who use a Dorado so imagine argentinians or Colombians who work for companies in the US or Europe and they get paid in a variety of payment methods like wise revolute PayPal Pioneer and so on so they are

using El Dorado peer-to-peer um to basically streamline their own money between different accounts so they're just using USD as a as a kind of a smart route to get their money to um to something like pigs or to something like Mercato Pago that they can actually uh use in in their local economy yeah this um we see many of these use cases coming up um and again they act they solve actual problems right um the cross B payments and so on um when we look still before we get on chain because that's

another thing before we get into that I wanted to get your your thoughts on the cbdcs right so in Brazil we have the DRS coming um some people say it's a wholesale cbdc that is just for commercial Banks some people say it's a platform maybe it's um a bit of all of all these things um so when we look at that there is two things that I would like to touch here first your opinion on on the on the cbdcs in itself they use what's the case for them and the second is um in this scenario where

where things are connected how does the financial institutions that usually want to have the Reserves will play in this scenario how do you guys are seeing that okay so the way we C cbdc today is basically it's going to legitimize a lot of things that we do on blockchain and it's that that today doesn't have the clear regulatory path around it so payments is is one of those but also uh it will be possible to create decentralized exchanges for things like cars or real estate and even create exchanges to compete against the stock

exchange B3 in Brazil in a way that the government can keep keep track of the exchanges of stocks for example and also can be us it for tokenizing collateral for that and M and make the managing of collateral and interactions with the legal system much efficient than they are today so we see a lot of use cases for cbdcs we we understand that this will legitimize a lot of the blockchain activity in the country and we put a lot of companies that are now afraid to interact with blockchain blockchain solutions to okay this is normal this my country is doing uh there are some service providers around that uh the

same way there are some provides around the traditional Financial system that they don't know how they works just like they don't know about blockchain so we see a very it depends on how it goes but it could potentially have a very positive spin in the for Innovation and for new companies coming up nice yeah that's why we are here we want that to happen and not being something restrictive and so Ono yeah on my side um I'm a big fan of private initiatives so I'm I'm a bigger proponent of private stable coins uh but I I have to appreciate the the work that the Brazilian Central Bank has done over

the past few years including things like paks that uh for anyone who is uh from outside of Brazil is just massively impressive to to see everyone paying everything for free basically so in that context um I think that real world assets and tokenization of of D digital rise or stocks or bonds uh with the government or the Central Bank uh playing an active role could be massively important for the tech ecosystem here in Brazil like as you mentioned the the use cases are um are quite broad you can you can build

from decentralized exchanges to Market places to products on top of these real world assets like lending protocols on top of this real world assets so I'm very excited to see what's coming uh for Brazil on on that regard let yeah so we when we look to the own chain word now so so we have a onchain summer coming soon hopefully uh when we look at onchain sorry when we look onchain um we see many try outs I would say many types of stable coins we have

seen stable coins that are tried to be based out of the trading bases basically the difference between the Futures price of a um an asset and its current price on this SP on this