Why Stablecoin Payments Are Finally Going Mainstream with Jess Houlgrave of WalletConnect

Transcript

We handle all of the complexities of crypto ultimately just give fiat out at the back end to the merchant or to the payments company and this simplifies their journey um in crypto completely. >> Where are some of the more stable coin ccentric places in the world so that we can kind of use those as a as a shining example. Similarly, I assume how we want this flow to work for wallet connect pay is either as you guys have a in a QR or a tap with a crypto card. >> Welcome back to another episode of Stabled Up, our premier weekly show

covering the ins and outs of digital dollars, stable coins, and the future of decentralized finance. Show is made possible by FRA and FRA is powering the financial engine of the internet powering FRXUSD and genius compliant stable coins. This is the stable coin super cycle made possible by FRA. Now enjoy stabled up our weekly stable coin show. All righty guys, welcome back to stabled up our weekly premiier stablecoin show brought to you by our friends at FRA powered by FRXUSD fraet and more a leading stable coin provider in the crypto economy for the last five plus years. Today we have Jess Hoggrave.

We are going to be talking about stablecoin payments at scale. Wallet connect pay has been a big big news in the in the neo finance sector from last week. Crypto payments are scaling. Massive cryptocard volumes. Revolute and neo banks are issuing wallets to the mass market. Traditional banks are enabling retail stable coins. And wallet connect pay is going to be offering cashback style rewards and more. Jess, we'll get into all of it, but first of all, how are you? Big week. It has been a big week. Um, one that we've been, you know, working towards for a long time. I feel like I've been working towards it for a long time. I've been thinking about crypto and payments for many years now. Um, and so very excited by it all.

>> Great. Awesome. Yeah, Wall Connect's been in in the in the stable coin space, in the uh multi-IG kind of wallet signing space, in the w in the wallet and kind of user interfacing space. But it really feels like this is like a very like one one-sided jump into where you believe the future is headed, which is payments for stable coins at scale. And I think yesterday actually or the day before, Santiago Santos put out a article about why he thinks B2B stable coin payments are are going to absolutely explode. So let's just kind of start with some of the thesis here of the product, then we'll get into some more of the actual specs and details.

Why are you so bold up on B2B stable coin payments? Why is this going to happen? Why is this going to work? Talk to us about why this specific niche is set to grow big time this year and into the end of of the decade. >> Like I think we see people moving onchain in all the various like for actors and across all of their business lines right now. So businesses are moving on chain and managing their treasury onchain. Um, as a result, people are going to be wanting to pay their suppliers, pay their employees with with um with assets that live on chain. We saw um the zero hash gusto announcement for contractor payouts.

People are going to want to get paid in stable coins. And with Wallet Connect Pay, um, you know, really what we're doing is building on top of our existing network and our infrastructure, which accesses about 700 different wallets, u many thousands of applications already built on the network, and makes a really seamless um, payments flow for consumers, so that when they go in store with an Inenico partnership or with any of our other payments companies online, um, they're going to be able to pay for goods and services with those assets that they now hold. The uh Inenico partnership I think is is one that caught a lot of people offguard and and was a wow moment for the whole industry. Uh this is something that I know I go into restaurants and shops and I see this as the pay the point of sale

provider and so to to associate that with wallet connect was was a big eye openener. Um give us a deeper sense of how it works underneath the hood you know I tap my normal card. What are what is the process for on for businesses to onboard wallet connect pay? Are do we kind of get all the Inenico ones by default? Are they are are you going to be going to businesses and kind of picking them off? Um tell us a little bit about about the ins and outs of this uh this product. >> Instead of a traditional like crypto experience where you're asked to connect your wallet and then sign a transaction, you're taken through what feels look and looks like a payments experience. So, do you want to pay with this asset? Yes.

Click pay, one and done. You don't need to think about anything else. Um and and you can pay with whatever asset is in is in your wallet. On the other side, um we unfortunately it's not a a tomorrow on all Injenico devices. Um uh but it will be a gradual roll out with with both their direct merchant partners and of course also with their acquiring bank partners and payments companies. So um they cover about 40 million uh terminals worldwide today. Um, and you know, we will hopefully if one day be an all Inico terminals, but right now a merchant either needs to opt in um directly with with Enico or ask their PSP. Um, and we hope that a lot more

payments companies, we've got a several in the pipeline. Um, we hope that a lot more payments companies are going to switch this on in in the coming years because we do see demand from merchants because they want to be able to offer this to their end users. um gives them lower fees, uh faster settlement times, um often higher basket value, um higher transaction value for end users. So, tons of reasons why the merchants want it um and why those PSPs should consider enabling it. >> You've argued that that um the with regards to the payments for actual consumers to be interested in using uh some of these payments, right? cashback style rewards is interesting and I'd like to get into that. But when it comes

to the B2B payments landscape, when you're explaining what you guys have built to other enterprises and businesses, is it as easy as saying faster settlement times, cheaper fees, instant, you know, instant payments, um, you know, more profits for your business, less money paid to a credit card provider, less fees paid to Stripe or like what is that conversation like as far as understanding and educating about stable coin based based uh, flows using w connect pay. >> So for most merchants, I think it's very unlikely today that any merchant is going to say, "Right, I'm only going to accept crypto. Um, that means that this needs to sit alongside their existing payment methods. And for a lot of

merchants today, they will accept card. They will accept cash if it's in store. If they're online and e-commerce, then they probably accept other things like Cler as a like buy now pay later method. they might accept other accounttocountbased payment methods like um open open banking in the UK or trulle or or anything else. So already in existence are hundreds of different payment methods and very few of them are global mostly just the card networks and the alternative payment methods tend to be more localized but really wallet connect pay sits alongside all of those other payment methods. Um and that means that when we're talking to a payments company about enabling this we've got to speak their language. they actually shouldn't need to understand how crypto

works underneath the hood. We should just be able to deliver the benefits of this as a payment method to them and to their merchant. So, we plug into their existing systems. We give them the reconciliation data that they need in the format that they need it. Um, we handle all of the complexities of crypto ultimately just give fiat out at the back end to the merchant or to the payments company. And this simplifies their journey um in crypto completely. So really our goal here um is to put it in language that they understand which as you said is um this is cheaper, it's faster, it gives you these additional benefits. Uh it's global and and you can launch it really easily uh with wallet connect pay >> and and do you see a world where this

evolves too? Um, and I guess right give us a before and after, right? We've got fiat coming out when it hits the merchants. But when it comes to the consumers that are coming at the point of sale, are we expecting them to come with stable coins or do you think, you know, we can bring fiat to the point of sale to, you know, a regular consumer? It looks like they're just using fiat. Are we going to end up integrating stable coins in this middle part to improve settlement times, improve settlement costs? So it looks like, you know, fiat in, fiat out, but we kind of move the money with stable coins in the middle. Do you think that's that's one of the end states that we ultimately get to?

>> I mean, I think the ultimate end state is like all all pieces of the economy on chain. So, um, people are paid in stable coins and we're seeing that growing a lot today. Um, so they're getting paid in stable coins. They want to pay for things with stable coins and then those companies are paying their employees and buying from their suppliers and paying all their bills in stable coins. Ultimately everything should sit on chain uh over the long run. Now today um typically we see most people who want to pay for stuff with crypto or with stable coins already have those stable coins.

People aren't going through the painful on-ramping process um just to to make a a transaction. that typically already have that. Um, so that number of people is is growing. Um, and I think actually if you if you look at it the other way around today, many merchants want to take fiat out at the back end. They don't have the right setup to be able to accept these payments directly in stable coin, but they're they are moving almost from a separate thought process. They're moving their onchain um or or their treasury management onchain anyway. And so you can kind of close the loop in a way and eventually we we may remove that fiat offramp um kind of component and the payment goes all the way end to end in in stable coins. So I think really

the long the long-term game should be that we don't need any of those traditional rails. Obviously, that's a a a nice dream to have and um will be a long long time away. But I do think that a very meaningful proportion of payments, B2B payments, consumer payments, um salary payments, payouts, um how people are managing treasury is going to shift onchain over the coming years. >> Not your keys, not your coins. From the team that pioneered cold storage, Treasure has just released its new wallet. Guys, if you are still using hot wallets in 2025, 2026, you are missing the entire point. Secure your coins. Get a treasure at treasure.io. Holiday is

unified crypto payments. Give your users more wherever they are. Go to holiday.xyz to never write a smart contract again. Looking for yield that stands out? Infinifi gives you just that. Deposit stable coins and earn far more than the current savings rate. Infinifi is a battle tested reliable DeFi platform that is ready to go. Head to infinifi.xyz. >> A a study done recently by uh I'm looking at it now McKenzie and Artemis. So, you know, two two data providers in this consulting firm that said um granted the the stable coin industry right now is upwards of $380 billion. Um most of that is currently in B2B transactions. That's accounts for 226

billion. Uh remittances is 90 billion. capital markets is 8 billion. Uh, true stable coin payments represent just 0.02% of the global two quadrillion dollar payments market. And so I I think you guys are currently sitting at where the bulk of the stable coin activity is happening in the B2B payments category. But as we look at payments as a whole, that whole category of payments, where you know, do you see the puck moving next in terms of how we're going to because, you know, we agree with you. We think 100% of the four quadrillion or the two quadrillion dollar payments market will be on chain. But how do we get to 100%. Right now, we're only have

02. Is it more growth in B2B? Do we ultimately get more remittances or is it more retail? How do you think the the stable coin market at large starts to cannibalize and supersede more and more of the global payments market? >> Look, I think all of these things are very symbiotic and I think really you need all of the pieces in place to make it make sense. Um, does it make sense to receive all of your salary in stable coin if you have to offramp it all? Yeah, maybe for some people, but probably not for many. Whereas once you can actually pay for everything, then it might make more sense. Similarly, if you're a business, um does it make sense to move your treasury onchain if then you have to offramp again to pay your

suppliers? Probably not. But if you combine the treasury and the supply chain payments um together might make more sense. So actually you need a lot of this this stuff to come together to make it make sense for people. Um the other thing you need is the right incentives and for people to um have the right motivations to do this. And that means giving them great user experience so that this isn't worse than what they have today. And I think until now crypto payments are arguably a lot worse than than a tap to pay card experience. So that's one of the things that we are really really focused on is making that user experience great. And then you need to think about who is incentivized to do what. And that's where some of the it's really experimental at this stage, but

that's where some of the like cashback experiments that we're running, these kind of like rewards uh or like interchange type rewards that we're giving to our wallet partners and to other people um as part of that flow, hopefully create enough incentives to make people change because we all know that consumer behavior can be really sticky. Um and so we need the right motivations. merchants offering you a discount if you pay in crypto to kind of change that behavior, for example. Um, lots of things that we can do there to to try and experiment with that. But that's definitely going to be one of the um I guess challenges for crypto payments over the coming years is how do you um take what people are used to and make them use something different.

>> And to your point, incentives are a great way to do that. uh could you just could you give us a sense of the incentives that are out there now and and tell us how are businesses and users able to take part in these incentives? >> Yeah. So what we've just announced for like the launch of Wallet Connect Pay is that the initial period end users paying with with Wallet Pay in store um or online will get 2% cash back. Um, and then we've got some other cool promotions, I think, coming up with a few merchants who are going to offer additional um, discounts. We've got a few asset um, like stable coin issuers, for example, who want to offer additional incentives for using their

specific stable coin. So, I think we're going to see that incentive pool um, and and the types of incentives that we can offer grow over the next little while. Um, how do people get involved? I think um if they if they want to become a direct merchant um then then they should reach out to us. We have a few partners that we're doing that with. We're getting great feedback from them. It's a great learning experience. So if people really want to get started ASAP and their existing payment provider can't give them crypto payments and they should get in touch with us. Um but also but I encourage merchants to speak to their payments providers. Tell them that they're interested. Um, a lot of payments providers uh are interested in this, but they want to know that there's demand from their merchants. And so, um,

you know, have those conversations with your with your payments partners. >> Yeah. I mean, this this article about what's stopping you from receiving stable coins is particularly interesting as well as it pertains to the incentives here because, you know, I think I think there's a still just this this big education gap as well as just a convenience gap, right? So let's talk about what actually happens when uh you know someone goes through an inenico physical kind of like toast toast machine and you know taps to pay right you you tap to pay your credit cards come up you just click one face ID scan done similarly I assume how we want this flow to work for wallet connect pay is

either as you guys have a in a QR or a tap with a crypto card um when it comes to actually using the crypto that I have on a mobile app on my phone. How is that going to work from point of sale perspective? Right? So, what is going to stop me from from being able to actually spend my stable coins that I have in a wallet connect app in a MetaMask and a Phantom etc. or if I have like an EtherFi card or a Crypto.com card on my tap to pay. How like what's going to stop me from actually being able to do that in the real world as this like actually rolls out? Is there a specific requirement from the user side that I need to have in order to be able to spend uh my stable coins?

>> So, I think there really important distinction between spending stable coins um on a like stable coin native or a cryptonative payment uh kind of method. It's what we what we see in the market today as stable coin cards. If somebody's got a stable coin card today, um that's usually a Visa or a Mastercard. And what happens as part of that flow is that the moment that you tap your um stable coin card, those stable coins leave the onchain world. They go straight back into the old world and the rest of the payment flow is completed on those old Visa or Mastercard rails. It means that the merchant doesn't get any of the benefits, doesn't doesn't get cheaper payments, doesn't get faster settlement

time. They're basically just a Visa transaction or a Mastercard transaction that are pretty indistinguishable for the merchant from any other card transaction. So those stable coin cards are great for end users because people want to pay with crypto, but they don't bring much benefit to the rest of of the ecosystem. Um, and they certainly don't keep assets on chain. Now, what we're trying to do with Wallet Connect Pay is keep those assets on chain for as long as possible. Make sure that the endto-end payment flow can take place onchain. Um, that means that when you scan your QR code with your wallet, and you mentioned MetaMask, there are hundreds of others that this is compatible with. Um, when you scan that QR code with your wallet, um, the the

money is actually moving onchain. It's not being offramped at the point that you tap it. Um uh for some merchants it's going to be offramped but eventually we can just take that piece out and people can be settled um end to end on chain. Um for you as a user looks like you scan the QR code and then you're asked to basically pay. It's a one-click experience. Um I think over time we're we're hopeful that we can also translate that to NFC experiences. So it's much more of a tap rather than a QR code scan. Um although in some parts of the world the QR code is a very familiar form factor for payments if you go to Southeast Asia or somewhere. Um but we want to make this feel as uh as

close to a like web 2 payments experience as possible so that everyone um feels comfortable making those payments. >> Ye is built for big moments. The most fun you'll ever have with your crypto. Go to yeet.com to yeet into your next game. Trade on anything, economics, weather, sports, crypto, and more. All on kalchi.com 24/7 for the world's biggest prediction market. Havachi is fast and private per trading secured by ZK with Celestia underneath. Go to habachi.xyz to start trading today.

>> Yeah, I mean I think that uh the QR code on the in the western world is a bit is a bit less than like a bit less accepted than the tap. Um, I think generally people want the the easiest flow and I'm not sure like basically what what you're getting at here is that you want to make it so that the that the the stable coins stay onchain and the money stays in the onchain environment throughout the entire sales process into the end of the sale rather than having to do the off-ramp or on-ramp process. Um, and so that would that then require the business that's accepting the stable coins to also be willing to hold stable coins in some sort of like uh wallet or account or or like if I'm a business and

then I get paid in stable coins through wallet connect pay, I have to pay my employees, my property taxes, my rent, it aren't I just going to want to then offramp that as well and and pay that or is the idea then, you know, I guess in the future to be able to also pay your expenses with that same stable coins that you've just received. Yeah. So today we absolutely enable merchants to receive fiat out at the back end. Um to your point, not all of them have wallets. They're not all equipped to do that. Um and so we manage the entire payment process onchain and then at the last mile we do a conversion to fiat to settle to those merchants.

Now obviously the end state is that we don't need that. Um, and as more and more merchants also have the treasury management piece and um, everything else set up, um, eventually we can just take that out and kind of join the dots at either end so that the payments go in in in in stable coins and go out to merchants at stable in stable coins. Um, we'll already see merchants or some businesses anyway wanting to pay their employees. So again, it's about as moving as much chain as much of this onchain as possible. Um, and over time I think we'll be able to remove some of those fiat components, but for now it's really important that a merchant, if they want to, can take fiat.

What would you say is is one of the biggest gaps or or obstacles still today to completing this value chain onchain? Like what what is what are some of the things that you you know are still yet to be accomplished here that that we're focused on going forward? Okay, I think there's there is a lot not all of it within the wallet connect domain. We're really focused on those like payments experiences, but I think um for example um true like payroll for employees is still has some work to do when it comes to things like taxes and reporting. Um a lot of like government tax forms just aren't equipped to understand when somebody's paid out in

crypto. works quite well for contractors but less so for employees in oftentimes. Um so some of that I think a lot of existing um like accounting uh you know tools, accounting setups, accounting methodologies even in top parts of the world need updating. Um you know it's it's very recently that we've got real clarity on like what is a stable coin? What counts as a stable coin in the US that definition is still evolving in other parts of the world. So, um, for for a business to kind of truly truly be onchain and not even need a bank account so that they can pay all their suppliers, pay all their, um, uh, their rent, pay their employees, um, etc., and

then be able to accept all money in in crypto, pay their taxes in crypto. We're quite a long way away from that. Um but I think what we will see is these two worlds kind of um slowly intertwining. Um today maybe like 1% is is taking place on chain. Maybe tomorrow that's that's 5%. Um and maybe in 10 years time that's more like 95%. Um but but that fiat world and the existing setup that we have um has to work hand inhand with the the onchain world. We see that more and more. And so it's important that these two things are seen as being able to work together.

>> Yeah. I I see it very very similarly to the way that we're thinking about legacy finance where we we believe that, you know, banks everywhere are going to be forced to innovate. They're going to be forced to pay higher yield eventually, whether it's a result of regulation or a result of them just getting, you know, innovated by some of these neo banks. Um and and as a result, they're forced to sort of, you know, change and adapt their ways. Similarly to to what you're saying, I it seems like as an industry, the way to think of it of this is look, if we can frontload a lot of stable coin users in the front part of that value chain, these people they want to pay at point of sale with stable coins, it'll slowly start to force merchants and eventually, you know, the the the

merchants at a higher level like the municipalities, the tax collectors, the property taxes, all of these things and the payroll as well as you mentioned will be forced to accept stable coins and be more stable coin centric if we frontload the first half of that marketplace because more people are using them and and so I'm curious if you're thinking about it the right that that same way and if if so where what are some examples of of ge geo uh jurisdictions that are doing a great job of this now you mentioned Southeast Asia as a form factor but where are some of the more stable coin centric places in the world so that we can kind of use those as as a shining example.

So >> I think we're seeing two types of jurisdictions almost where stable coins are are kind of growing very fast. One is actually where like the existing financial system is not doing so well and people want to trans you know uh they want to move into stable coins sooner. So somewhere where people actually want to reduce their exposure to the local currency and want to hold their assets in a dollar denominated currency for example, there's a real pull there from the ecosystem to have stable coins because that's what people really really want. So we see that in Latin America and a few other countries um around the world. On the other hand, um we also see jurisdictions where

actually at the government level, they're very pro prostable coins, pro- crypto and want to see this happen. Um the US obviously has made big moves there in in recent years. Um but also you know the EU put out some announcements today crypto or even payment specific but talking about like EU tech um to move away from like the dependence on on some big US companies. So I think there we will start to see um you know EU uh native payment rails um accountto payments or crypto payments start to be something that people become more interested in. Um similarly there are some other like very forwardthinking um

places around the world where crypto really has to be like legal tender like El Salvador and and other places. So um it comes both top down and and bottom up I think in terms of different places around the world driving forward uh that adoption. >> Yeah. Yeah. I mean last thing from my end just with regards to the adoption side um and globally at at Davos last week Jeremy Lair the CEO of Circle really had a big big headline hit with regards to how he sees agentic payments happening with stable coins o o over the next five years really just this is going to be a massive use case for stable coin payments I think of like micro payments on the internet I think of using uh you know subscription based payments all these different types of

stable coin flows in aentic sense. How are you building wallet connect pay and just generally how are you thinking about your strategy as the agentic kind of payments flows start to trickle in over this year, next year? I imagine next year we probably see some agent to agent payments happening. How do you how do you think about this from a business strategy perspective and uh from from a product perspective? Yeah, look, I mean, Wallet Connect has always been this like network that allows wallets to communicate with apps, and you can translate that pretty directly, which is that agents will probably have wallets, uh, that want to communicate with apps. And so, um, I think a lot of this is is very aligned with with how we've always seen the

world. But instead of the you uh and the wallet, it be your agent is controlling the wallet. Um obviously we need to make those messaging types compatible. Um but everything that we do is sort of in line with that, in line with things like the X42 standards and others. Um and really, you know, we have a a great history at Wallet Connect of creating standards that are open source. We write the a lot of the chain agnostic standards. Um, we've written several in the Ethereum improvement proposal standards and we create a lot of our own standards for how our wallets and apps should interact with each other on an open source basis.

And I think that um there's some great work being done and and obviously lots more to do. Um, but that it's it's really rooted in creating these standards that it's going to make it easy for people to to build on systems. >> Yeah, ma makes a lot of sense. Uh Jess, just give us give us some closing thoughts here and tell us where you wallet connect is headed after this. You guys have, you know, this flagship partnership and uh are doing tremendous work. Um any key milestones uh as far as uh you know, direct merchants or how much volume you'd like to see go through wallet connect pay uh throughout 2026?

>> Uh we had just over $400 billion dollars of of of transactions taking place. So for the network, I would love for us to to build on that this year. We're ahead of plan. I think um although we're only halfway through through January. So I think we at the network level will continue to see that growth. But wallet connect pay it's very hard to know because this is still such a nent industry. But I think if you look um at people's willingness to pay with crypto with these crypto cards, albeit um those numbers have gone up significantly. And so that demonstrates to me that people want to be able to pay with crypto. Um I think we'll have our first merchants with in with the partnership coming online hopefully um at the end of this

month or or early next month. So we'll start to see that. We've already got a few merchants um direct us live. There's a great coffee shop in Lisbon that people can go and use the wallet connect pay experience with. Um, and of course we've got all the existing partnerships we have with other payments companies where you can use that more traditional wallet like connect flow but still execute a payments experience. So um, you know, for me 2026 is about bringing more people uh, a great payments experience and more merchants who want to accept crypto. Um, whether that's with us or or generally I think that's the direction that we're all um, all pushing towards so that we can keep more things on chain. Yeah,

>> feel brewing >> trillion dollars >> quadrillions. Thank you for your time. Congrats on the wall connect pay announcement. Looking forward to the moose in in 2026. Uh it's funny how we've came from payments being such a a big part of the foundational infrastructure of blockchain back in 2017 2018 when Robbie and I joined almost like forgot about it all as if it was too boring for the last six to eight years. And then now we're back and it's like okay we're going to get back to the most important things that we can do guys onchain at scale. Um so Jess again thanks for coming on and congratulations.

Thanks so much for having