An Onchain Alternative to Global Transaction Banking

Transcript

[applause] >> Hello New York. How are you? Um today I'm going to talk about a big idea and you're all lucky here to witness that. Uh the idea is how do we build an alternative to a system that has been dominant for decades to move money globally. And that system is called global transaction banking. There's an alternative to it and that alternative is on chain and that's what we've been building for the past 4 years.

But before we get into what we have built and why it's working and why it's scaling so fast, we should first understand the the build-up of the global banking and the global transaction banking and what the challenges that are that are they're facing right now as we speak. Even though the name is global transaction banking, the reality is the system is not very global. It's actually very local. The majority of global transaction banking happens locally here in New York. New York is the heart of global transaction banking.

Why? Because there are two major types of settlements that happens to happen in New York predominantly. The first one is USD Fedwire. Any type of USD wire goes through New York and that's around $1.1 quadrillion a year volume. And the majority of FX transactions also ends up happening in a system called CLS, continuously settlements, also happens to be in Manhattan, New York. $1.8 quadrillion a volume a year.

And this is crazy if you think about it that this whole global banking system depends so much on a central ledger that's held at the Federal Reserve Bank of New York. And the central ledger and this Federal Reserve Bank holds a type of reserves, but whose reserves are those? The reserves are actually from every single bank that wants to settle USDs globally anywhere they want, they have to have reserves in the Federal Reserve Bank of New York.

And at the top of the list is the largest bank in the world, which is JP Morgan, and this is their new headquarters. And the myth is, when it comes to what these banks do, including JP Morgan, is that people think that banks actually move money. Banks don't move money. Banks do something quite different than moving money, which is they just manage liquidity. And what does it mean to manage liquidity? It means that they actually manage a very large balance sheet.

And that balance sheet is composed of deposits of the commercial companies, the businesses, and deposit of people. And this is the main reason why banks, and especially JP Morgan, is fighting to death the stablecoin movement. Because without deposits, banks don't exist. Without deposits, banks don't have liquidity. Without deposits, banks cannot enable the movement of capital, especially USD, around the world. And that trend has already happened.

That trend is already happening. And this is why we need an alternative. Today, all of these large banks are facing three types of challenges when it comes to fiat liquidity. The number one is higher cost of capital. For a long time, Fed thought that they could print money forever, they could have quantitative easing, and they could grow the balance sheet of these big banks forever, and they would dominate the liquidity of of whole world, and that would help them capture most of the global trade volume.

That gameplay is no more viable. They have to stop quantitative easing, tighten the monetary policy, and the cost of capital keeps increasing. The number two reason is the fragmenting geopolitics. Thanks to the trade wars, thanks to the tariff wars, uh thanks to the shifting global trade, the fragmentation happening at a speed that's faster than these big um banks and the US monetary policy can keep up with.

And more and more countries and more and more federal banks of the countries are derisking from the T-bills. They are derisking into gold and commodities and other types of um commodities and equities. And that's actually not helping. The balance sheet is actually fragmenting the balance sheets of these banks further, causing the liquidity to be thinner and thinner. And the last one is the rise of stable coins, which is also very challenging because it's taking away deposits of large treasuries, deposits of large companies, and deposits of wealthy individuals. So, all of those challenges are not going away.

And there's no going back to old regime, which means now we need to create a new regime. And if you look at the report from JP Morgan, the 2026 payments industry report and outlook, that they published last last month, they talk about every single one of this challenge and how they're planning to tackle this. At the top, they are thinking, okay, the way we've been managing liquidity doesn't work anymore. We have to make sure liquidity is programmable and liquidity is borderless. And they know it's not easy to do using fiat.

And then they're realizing that treasuries of these large companies cannot operate within the old banking system. They need to be always on treasuries. They need to settle every single minute, every single hour. That's the only way they can manage liquidity, they can manage a global fragmented system and a shifting trade flow. And then, they also realize that blockchains are no more experimental, they are here to scale, and they have to shift as soon as possible. But, they don't know how to break through this lemma of supporting stable coins versus not because there's no other way to move on to the blockchain ecosystem.

And the way to solve it, as we imagined 4 years ago, is through Humbl Pay network, which is rebuilding the global transaction banking on-chain using stable coins, using programmable liquidity, and using yield walls. Yield walls don't sleep. They are the 24/7 version of autonomous treasuries J.P. Morgan wished their customers had access to. Programmable liquidity doesn't depend on banking holidays, it's always on, and it's not fragmented. And then, the stable coins can settle anywhere, anytime, do not depend on a central ledger at the Federal Reserve Bank of New York.

And so far, we've been able to prove this with use cases in every single big domain. Credit cards, we started with enabling our first customer, Rain cards, which is now the largest and fastest growing card solution to help them plug in to the uh liquidity solutions on our network so they can settle within this network. Cross-border payments, a lot of our large customers come from this world. They enable themselves using stable coins and replacing their back end for treasuries using stable coin liquidity, tapping into on-demand, just-in-time liquidity solutions, no more depending on the large global

banking solutions. Merchant settlements, Amazon today is using our solutions to settle with their Asia suppliers. Why? Because they had the same problem. A lot of Amazon buyers are in the US, a lot of sellers are in Asia. The only way they can actually get the money to the Asia sellers and Asia suppliers is to use an alternative system. Otherwise, they have to hop from US to UK, they need to do FX transactions and FX um operations in the UK. They need to wait another day or two if it's not a banking holiday or a weekend to file settle in Asia and then from Asia, they have to go into fragmented uh banking rails to settle with the suppliers at the very end. That takes three to four

days, a lot of money, a lot of people, very cumbersome. Using PayFi network, they're able to press a button in the US and money shows up in the suppliers' account in Asia. And then the last one is trade finance. As you mentioned, more and more commodities are actually now flowing through alternative routes. Heavy metals, rare earth minerals, even GPUs are now getting funded using stablecoins and they all need stablecoin liquidity. So, PayFi stack is actively replacing, as we speak, global transaction banking.

As they envisioned this stack four years ago when we launched XUMM, at the very bottom, you should be able to use any transaction layer, any L1 L2. On top of it, you should be able to depend on any currency layer, not just one. This can be stablecoins or tokenized deposits and tokenized funds. On top of it, you should be able to utilize any custody layer. Compliance can come on top of it and satisfy the needs of the regional players uh who needs to operate in a regulatory framework. And then the liquid layer, XUMM comes into play to provide in-depth, scalable liquidity and stablecoins for them. And on top of it, you can build any use case that, you know, all of these different global

companies depend on. And what we have seen in the past 2 years, adoption has infinitely accelerated. We're now every single major payment company adopting PayPie, from Visa to MasterCard to PayPal to Stripe to Western Union to MoneyGram. They're all rapidly replacing their infrastructure. They're rapidly embracing stable coins and on-chain liquidity. And we can see it in the numbers. Our network has grown 3x since last year. We're now seeing $14 million in total transaction volume, growing at $1 billion a month uh uh uh uh speed with only $160 million in stablecoin liquidity, which is used very

efficiently, again and again being recycled. 8% organic yield being generated from this activity. It has been sustained throughout the past 2 years. Doesn't matter if it's a DeFi summer, DeFi winter, we're able to supply 8% organic yield to our depositors. And there are more than 110k depositors right now in our systems benefiting from this, both institutional players and also retail. Have seen $0 in credit defaults even though it is rapid scale, which is unheard of in the trade finance. We are able to programmatically lock down the full settlement cycle and make everything happen in just a few days.

And that has been um an incredible growth to witness with all of our global partners today. And at the heart of it, it depends on this architecture around this token called PayPie Security Token, which is PST. PST is a cross-chain omnibus yield system where the deposits come in. Those deposits collect 8% yield accumulating on chain every single minute. And they can access that throughout a various, you know, DeFi venues um and that goes into our liquidity pools and our partners in trade finance, payment financing, and cross-border payment financing, or card networks can tap into that whenever they need liquidity to settle using that

liquidity and then pay us back in a day or day or two, and that capital gets reshuffled and keeps basically, you know, generating yield and paying the depositors. And it's been nicely growing, and I'm very glad to announce today that as of an hour ago that whole infrastructure is now live on Ethereum mainnet with our launch partners CoinShares Asset Management, Bitwise, Lukka, X, Fluid, Morpho, and Chainlink. And now you can access the PayPie network that has been operating mainly on Solana for the past 2 years on Ethereum. Anybody can access the yield, and the network will continue to grow as we have more stablecoin liquidity, we

will be able to replace more and more global transaction banking, and that will diminish the role of the fiat rails more and more around the world. And with our offices in four different regions across the world, we're constantly expanding our solution architecture to enable more payment companies, card companies, and trade finance flows to make sure that the world that doesn't sleep can depend on systems that doesn't sleep. Thank you so very much. You can find me afterwards um near the stage, and follow us at Centrifuge on Twitter. Thank you.

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