Stephen: Crypto yields have always had a bad connotation with, you know, programs that have Celsius anchor and others that have gone completely collapsed. But this guest today, Tarun Gupta, who's the CEO of Coinshift, is bringing something completely different to the industry when it comes to treasury management and even accounting measures in the crypto space.

We talk about all the protocols building and where he's resides. In Dubai, we go over a little bit of regulation, and more importantly, we saddle in and we talk about stable coins, especially the yield bearing stable coins that they're building on top of Zos Stablecoin platform. This is such an interesting episode that covers everything in stable coins, how companies are making money just by having crypto on their books.

This is a really great episode for anyone building in FinTech payment or crypto. Probably should go. Go listen to the full thing asap.

Stephen: This Is your host, Stephen Sargent. This is the Around The Coin. Podcast. We have Tar Gupta from the the CEO of Coinshift. Tarun, tell the people a little bit about yourself and then we're gonna jump into your background. You're gonna talk all about your stable coin. It's gonna be an exciting conversation.

Tarun: For sure. Thanks for having me. I'm pretty excited to be here. So I'm founder and CEO of coins share. Got into the space around 2017 as more of like, you know, helping people running their Bitcoin exchanges in India in terms of helping them as, as running Bitcoin RPC notes, right. And at that time, Bitcoin scaling was the only thing.

So I got into Bitcoin Lightning Network and like a library to. And then after like time I was. What the space needs. A lot of people were losing their mnemonic phrases, this 12 word to 24 word mnemonic phrases, and we thought of like a social key recovery protocol where you have trusted devices or guardians where you can recover in case of loss.

So it was like, you know, never lose your Bitcoin and if you lose, like you can recover through some cryptography based a so, yeah, but ahead talking.

Multi chain was too ahead of the market and nobody was interested in funding this. So we decided to open source this. And fast forward to 2019, I joined by economy through common connection with Sandeep poly from Polygon. So yeah, that's how I, I got my sort of first job in crypto, like official and crypto as a, as a infrastructure engineer led the team with the CTO to build like a gaslist infrastructure for end users and what happened by economy is basically we used to get building crypto and every single month basically, I sometimes need to go back to your CEO and say, like, you know, pay us on time, or, or he forgets to pay on time. And it was like little weird as well. And, and the accounting was happening on WhatsApp or Slack, right? And it was very, very weird. Like the entire flow was weird and nobody was actually thinking.

Very simple. So what I decided to participate in a hackathon build, like a simple solution where you can just pay to multiple people in a single click directly through your treasury and you can tag that transaction and do some basic bookkeeping. Very simple idea, not like crazy social kick protocol or cryptography, but everyone just suddenly got interested in this.

And protocol Labs and consensus sort of, put us like a PC check. Together and, and I was like, as an engineer. Okay. You know, I've been trying like really hard core technical stuff from the last four or five years. Nothing is like, was able to raise venture capital, right? And this like very simple solution.

I built it like in two, three days only. And then it was like very exciting to see and we were able to convert unis, swap grants, balancer grants compound grants, and then couple of like, like synthetic grants, all these grants program of almost in the first month of the launch. So yeah, I think that is like a brief journey and.

Stephen: That's interesting. You talked about Lightning Network and that caught my attention 'cause I remember when like Lightning Network was gonna disrupt the industry, it was all gonna be about Lightning Network and then it slowly started to fade away. Can you talk about a little bit about that?

Tarun: Yeah. I think at that time we were having this thought process as an ecosystem. Bitcoin is money. And, and a media of exchange. People will live on top of Bitcoin and slowly, slowly, when, when the time will come and, and a lot of people will hold Bitcoin and the fluctuations will not be very volatile. So Bitcoin was like more of a money use case.

People were exploring this, but at the same time, the transactions were slow. Right. The block. Lightning network was an idea to, to really scale this money use case so that you can just have lightning channels. And based on that, you can just say, okay, for micropayments, I can set up a channel with you. And for all these micropayments, we will settle in a separate ledger, which is a layer two network.

And then you know, the, the, the entire proofing system is on the, in the, in the Bitcoin. So concept Ethereum was also planning, scaling, and then other solutions. So it was like a scaling time, right? We want to scale money use case. There were no like, real growth of stable coins at that time. And, and, but why?

Its, to be honest, is like the, the, the role of, of all these blockchains were very different and the asset issued by all these blockchains is not only like bitcoin. Not a money as such, yes, you can argue that, but for everyday person it's, it's more of a store of value, but rather exchange it on your coffee shop, you exchange it because. Real, I, I would always argue this thing is if only gold exists and there is no fiat money, then yes, Bitcoin is a better money than gold. I understand that. Right. That makes sense. But is it like a better money right now with the fiat, which is like fully liquid as compared to, as compared to, you know, everyone accepts it.

So that's how the normal user is thinking, right? They're not using Bitcoin for, for normal transactions. And that's why like the stable coins is the biggest product market fit of crypto because it solves very simple use case, which is money. And that is a store like real dollar representation on the blockchain.

Stephen: Right, and the micro transactions just feel a little DI think it's like a conceptual thing. It's hard to picture like you have a hundred thousand, do you know, dollar worth of a Bitcoin and like you're taking a small fraction of that versus sending exactly, you know, $300 to, you know, an outsourced person doing business with you halfway around the, you know what I mean?

It doesn't feel the same. I think you. People are attracted, society's attracted that large value. And to take small slivers off of it doesn't make as much sense as like something like sending stable coins for the exact amount you need.

Tarun: Yeah, exactly. And then we have learned as a society as well how to operate on fiat for a very long time now. Right. So, yeah.

Stephen: You're based in Dubai, which has quickly become like probably the epicenter for like crypto ai. I don't know if they're still talking about the metaverse in Dubai. I think that kind of, that conversation may have slowed just a little bit. Talk to me about some of the projects you're seeing.

Like what's it like being in the jurisdiction? Constantly has people coming from all over the world you know, co collaborating at conferences. You know, there, there's never a dull moment. I've been there a few times and there was literally an event every other day. You could just live by the, the conference center there.

Talk to me about, you know, what your thoughts are on, you know, building in Dubai.

Tarun: Yeah, I think Dubai is a place right now where like 95% or over more like our expats, right? Like not the local population here. So people around the world are, are attracted to Dubai because of like, couple of reasons. First of all, like it disconnected everywhere very easily. The infrastructure is like really world class and, and for me, for example, it.

It's like a three hour flight to my home. It's like, you know, my, another home, very, very close to my native home, right? But for crypto specifically, I see the, the government as taking like huge steps here. So, for example, Abu Dhabi government you know, recently regulated basically the SPAC sauce, stable coin, which we'll talk about later.

But imagine as a company, your government is up with you to work. Like traditional instruments to put it on the blockchain. And there are like, you know, their, their government is also innovating. And as a company you're innovating and you're building something together. Right. And it's fully supervised by the government.

And, and it's pretty exciting to see. And, and yeah, I think, and even with, with to way government now, I think having this licenses to, to issue a stable coin under regulation.

So, yeah, it's pretty exciting. And then local events and all, every day, as you were saying, there are like hundreds of telegram groups you can join and every day some event is happening almost in Marina, downtown area. Like a lot of other crypto founders are there. Almost everyone I know has like, lives here.

So all the Indian founders also live here. And a couple of the large companies also live the founders of that live here and pretty near to each other. Right. So, so it's just a hub and, and very, very attractive.

Stephen: That's amazing. You know, when we look at your background, it's very, I like to use the word textured, if you will. You've been engineering, now you're doing, you know, finance and basic accounting and reporting user experience. Like, where does your mind go? Like what does Torun stand for and like, what do you fixate it on right now?

Like specifically

Tarun: Yeah, I think I always believe, right. I'm a, I'm an engineer and, and you know, believes in like maths. And then I was like teaching maths for like three years since my in, in my college. So, so I really love maths, cryptography, and all from, from very early days of my journey, right? And that's why social recovery protocol was built.

But then what I realized is like, okay, you, you can think very technical stuff and mathematical equations and all, if you can build something real. And the end user uses it. That high is very, very, like great and satisfactory for me as a founder, right? So, so yeah, what I learned is like, try to make things very simple.

For the end user and, and hide all the underlying complexity. But at the same time, when somebody wants to verify it, you have all the details. Right? So, so I think this has been my, my mantra, you can say like, how do you simplify the most complex things for the, for the end user, and at the same time, by learning crypto.

And blockchain, you understand finance much better and easier because you can try it out. You can send the payments like very easily. You understand, okay, I'm not going to pay a percentage fee whether I'm setting sell sending million dollars or a hundred thousand dollars. The cash fees will be same.

Right? So you just start understanding all. And then I started learning about traditional finance almost from last year. You can say. So first I got excited about crypto finance and then then started learning like traditional finance. And now it feels more easy to learn traditional finance because you understand crypto much more technically better.

Stephen: Do you see there's an area to play here, especially with so many traditional financiers coming into the crypto space. We see companies like Ondo Finance, you know, you know, tokenized treasury bills. There's like this, you know, you know, obviously Trump and you know, a lot of the big players in the US.

BlackRock, fidelity are getting into it. Do you, where do you see yourself? Are you more on the crypto side? Are you helping traditional transition into crypto by providing them, you know, the treasury management systems? Where do you feel you sit or explain your, you know, the most common use case you have for Coinshift?

Tarun: Yeah, yeah, for sure. So from the last three years, what is our business, right? Our business have been like more into treasury management for on chain organizations. So you come up with your multi-site treasury, bring your entire back office team here, and you'll be able to do all kind of expense management with your crypto assets.

Right. And at the same time, you are able to do financial reporting, basic bookkeeping and accounting. You can

thesal statements, right? So this has been our bread and butter, and we have over in a. From organizations including awe, Bitcoin, Starnet, uma, like 300 plus clients, right? For the last three years and almost we're touching $1.2 billion in, in payouts volume, right? So Coin Short has been used as an alternative to Fiat Bank when it comes to on chain treasury management, right?

And from there I think we, we understood like the user base. So I like one insight, very simple insight is like all crypto companies are also web two companies as well for, because they're registered entities and they all use bank as well at the same time, it's not like you're a crypto company, will not use bank, right?

So the same company is using a bank account and the same company is using coin. And you learn a lot what has been going in both the worlds, right? So if you are in us, you must have heard about Brex or Murphy as a neobank, right? And what they do for startups or, or web two organizations. You can just do payments, expense management, card management, right?

And, and do automate your accounting. But you can buy a tbi. Just two clicks or automatically they invest, they ask you to invest certain part of your treasury assets into T bills and they have just built it on the entire traditional rails right on top of current banking infrastructure. And we were able to draw very similar parallels to brick or mercury or re and then blockchain as well.

So we were thinking, okay, what is our next big move in treasury management? So that. The, the organizations who are holding money on chain, they should also start earning yield, right? Similar to what they're doing with Brex or Mercury. So that's how, that's how we decided, okay, let's, let's launch like a stable coin, which will work which will give you the table real on a daily basis in a permissionless manner. So imagine you are holding CS u dl, which is our stable coin, which we launched on almost the first version was live in November. But the latest version is like on seventh Chan. And what is like by holding CS UDL, you are just getting people yield daily. Daily, your balances increase.

Stephen: Interesting.

Tarun: Wallet. Right?

You don't need to.

Stephen: And how does that different from somebody's trying to stick? Like, so let's just say I'm holding you know. Somebody's holding a million dollars worth of USDC or USDT on their, their, their banks. How come can they stake that? Would that be against the rules? Is that too complex now? Is there a risk to staking versus what you're doing, which is like, Hey, you have the funds here, you're gonna get a yield on it for just keeping it with Coinshift is what I'm assuming.

Tarun: Yeah, I think let's dig a little bit deep, right? So there are like 50 plus stable coins right now, and then U-S-D-C-S DT are the major ones, right? And end of the day, U USDC is solving like a money use case for the end user. So by just holding U uss DC, you can move money in and out very easily, but under the whole USDC is very highly liquid and.

Some part of their treasury reserves are in short term treasury bills and couple of other cash coolants, which is sort of the revenue for circuit. Right. And for Tether, they, they have diversified their treasury in a lot of other reserves, basically. But the end user is just holding USDC or USDD.

They're not earning any yield rate, but that is like, okay, that is fine. They, they have solved like the major case, what we. At any given time, right? What banks are earning or what SDC is earning at a similar rate in a permissionless manner. And that's why we work with pax. The largest, like the third largest stablecoin issuer after usdc, right? And they work with PayPal, et cetera. So they work, they launch their stablecoin US dl, which gives you the treasury bills yield.

Reba mechanisms

is happening is D is increasing number of SDL every single day. The right. So yeah, so, but you cannot use that directly in Defi, so you need to have a wrapped version of that. And Yeah, and then we are taking that wrapped version and putting into a lending protocol so that you can just earn more interest rate through, through lending it out to Coinbase, BTC holders.

Ordo holders, because those are chip assets, right? So end user. You can permissionless Permissionlessly meant css. DL get the TLL yield and the lending yield almost block by block basis, right? So, and you don't need to stake lock. You can just go to swap and have your USDC and Cs UD in like a single swap.

You don't need to do any additional lockup.

Stephen: Right. And that doesn't seem like a huge deal, but when you're dealing with companies that have a million dollars on their bank or a mil, you know, 1%, one and a half percent starts to make, you know, that's an employee almost a month if they're able to pay out that

Tarun: Exactly. Exactly.

Stephen: I, I have a quick question. You see a lot of this stuff.

Who are companies paying the most? Like who's getting the most? Is it the, the legal counsel? Is it the sales and marketing person? Is it the devs who our company's paying out the most to.

Tarun: Yeah. So technically like it's a very secure, like it's a very private data for. For, for the companies. Right. And then we are like in compliance for not sharing any, any details you can say, but obviously the major ones is like salaries and, and salaries or our use service providers, vendor payments for sure.

And, and yeah, because a. Like, I think after this Trump administration, they'll start accepting USDC as the payment because they don't have, think about a vendor, right? If they don't have set up the, the proper compliance from accepting the crypto payment, they will not accept it. So generally, like the use cases, salaries and grants, right?

Because the other person is sitting in some other jurisdiction and the banking rails cannot raise there. So you accept money in US gc, right? So, so the major chunk is salary.

Stephen: What that you know, you know, you just launched an accounting tool, a sub-ledger, which combines a little bit of payments, a little bit of accounting in it. What would led to that decision to launch? You know, usually you have one thing you're focused on at treasury management. We do. Well, what you know, prompted you to be like, Hey, let's get a full dashboard here and get into the accounting side as well.

Tarun: Yeah, I think, I think we are like very clear. We, we are not, so we are not building a. Accounting solution. Still crypto organizations do accounting on QuickBooks or, or zero or other accounting sort of web two solutions because you need to combine your fiat and crypto Treasury, right? What we wanted to do is like automate their ledger data.

So think about right now your QuickBooks cannot calculate the cost basis of your Ethereum when you sold it, when you bought it. What does your tax look like for that? You cannot do that through QuickBooks, right? So you need like a data engine engine and indexer in a very technical sort of infrastructure site so that you can produce this data so that it can be digestible by your accounting software. About like accounting or our bookkeeping, it's just categorizing your transactions. Right. In a way it is digestible by your web two software, right? So we are not an accounting solution as such. Right. So, so yeah, I think we are very clear, like we want to be the bricks for Mercury for blockchain rather than like an accounting solution.

Stephen: which makes a lot of sense, right? If you can give them the information that their accountant needs to process on the web two side, and we're seeing a lot of demand. You know, the IRS has come up with new rules and requirements. They're losing a lot of money on people not reporting crypto in the us.

Where are you making C-S-U-S-D-L available?

Tarun: yeah. So CS USDL is fully permissionless. Right. End of the day you can mentor without permission, you don't need to talk to us. We don't control the CSS steel token ourselves, right? So by just with USDC, you, you are interacting with like a more protocol, which is like a lending protocol, right? And it is totally mutable.

So more team also does.

Be compliant in terms of how PAWS compliance is. So USDL are underlying collateral, you can say is, is not available for US citizens and couple of other jurisdictions, wherever. The yield is not regulated. So that's why we are not offering C-S-U-S-D-L from our side to any retail or or normal consumers. We just offer it to institutions.

Funds or market makers, or they have offshore entities, et cetera. Right? And from there they can easily as much as

Stephen: Makes sense. You know, the word yield when, like you say, the world yield, it makes so much sense now, but I felt like there was a time maybe about two and a half, three years where the world yield, like was very synonymous with scam or you know, right. Celsius anchor. Like I think we know a lot of those protocols where yield had a bad connotation.

Do you feel that word is, you know, has finally rebranded and it, it means what it's supposed to mean as we've kind of like filtered out all these bad actors that we're offering like 40% yield, you know, year over year, a PR. Like where do you feel the word yield when you say yield in the conversation? Has it changed much from 2021 to when you use the word now?

Tarun: Yeah. I think I. Overall the sentiment because of stable coins, right? So think about right now the, where the is coming. This is like a me, right? Where actually the coming. So if your stable coin is. It's just backed by your own token, right? With some algorithm under the hood. It is very difficult you know, pegging mechanism, right?

You are as good as your underlying token. But if, if it's a stable coin like USDC or, or like a real backed by real reserves, which is over collateralized and, and really liquid assets. Then everyone understands, okay, this is a solid, stable coin, and if you are doing lending on top of it, there are actual real borrowers who are borrowing this asset.

So just like in trade five, if there are lender and borrowers, you have a interest rate as a spread rate. So, so now the yield is coming actually through lending. It's not basically just some random you know, alt coin is giving the tokens only and that industry. And last time it was all like rewards, which were called.

Stephen: Yield, right. Whatever they could, whatever word. Got people to want to, you know, make 20% off their, their money for doing nothing, whatever word they could, they probably, they probably used all the words doing AB testing and then they just like, Hey, yield's getting the most traction. Let's just use that word.

Tarun: Yeah. Yeah, exactly. Exactly. But now everyone like is, is far more learned their lesson. We are still learning as an industry, to be honest. A lot of scams are still there, so I'll not say it's very difficult to detect that in crypto. So definitely need to do the diligence a lot. Right. Yeah.

Stephen: You touched a little bit about the US market. You know, the US has come out with some stable coin regulation proposals. They got the, a stable act, they got the Genius Act like questions going around with like Elon launch his own Stable Co. Like there's a lot going on in the US around, I. Stablecoin legislation what are your thoughts, just high level thoughts about like the progress, at least you're seeing in the US and how hopeful that might be for CS U-C-S-U-S-D-L in the future.

Tarun: Yes, yes, yes. I'll talk about like only the. Still like a, you know, a, a backed by USDL. So US DL needs to be regulated there for us to get regulated there, right? Because we are end of the end of the day, we are at derivative on top of US dl. So for, for, for, for us, I think it is very, very great news because the government is giving a lot of clarity for payment stable coin.

To really have the dominance of US dollars, these payment stable coins needs to. The more dollars will be issued as a stable coin by, by fintechs and, and players like PayPal. Imagine other banks also issue it. It'll dominate the power of US dollars end of the day, right? And dollar as right now as well. Very dominant. So blockchain is just increasing its sufficiency, right? It's a new technical architecture for the US dollars.

In short, how I see this. So definitely they are giving a lot of clarity. The clarity around the reserve requirements, where your reserves should be held. You cannot just invest you know, the underlying reserves into a private credit or, or some random shit, you know, reserves, right? You can only have like T-bills, short term T-bills, or cash.

For the industry, yes, because the regulation is clear. The player like Stripe and other fintechs, right? Why they will work with only banking infrastructure. They will, they can directly work with stable coins and, and they can just, you know, make their services much more appealing and better for the end user across the globe, right?

So I think the more regulation, the more right regulation comes, the more sophisticated. Entrepreneurs and, and, and FinTech applications will integrate these stable coins and the more users will have equal access to these stable coins. So I'm very, very positive on that side. But right now, the yield use case, for example, like U-S-D-L-U-S-D-M on these are not regulated out of us in terms of like, as a, as a bearing stable coin.

Right. So, yeah.

Stephen: It's always tough 'cause they're building basically what the US infrastructure needs. They just can't act in the US as of right now. But it seems like we're getting progress. You talked about, you know, the reserve requirements. What are your thoughts about what's happening in the eu? Like MICA seems to have very strict requirements, almost turning stable coins more into like a traditional financial product, which is already is alike, but maybe stifling some of that cross borner, you know, innovation and ingenuity that, you know, most countries rely on stable coins for.

Do you think they've gone too, you know, constrictive, or do you think there's room, you know, for innovation still in the eu?

Tarun: Yeah, I think it'll become very, the way I see this is like countries have the power to make their fiat. Right. Issued currency as a dominant currency in the world because of blockchain. Right. Just like internet currency is, e-money is like, you know, circulated very, very fast, right? So, so I think it's up to end of the day, obviously current regulations are, are very strict in terms of having these kind of requirements and even the research you need to keep some 3% of that and in, in, in liquid form.

And, and there are I think more requirements on the caps. As well, how much you'll transfer. But still, I think Circle got like a license for their Euro stablecoin in out of France, I think. And, and yeah, I think overall like these kind of regulations will restrict like new entrepreneurs to easily launch like stablecoin there, right?

But at the same time, like more sophisticated players like Circle can have more.

Stephen: Right.

Tarun: For somebody is not transacting large volumes of money, it's still better to accept and pay in, in stable coins in, in, in Euro. Right. So I, I just feel like, yeah, it's like a mix and match of, you know, centralization and decentralization where centralization is more stronger than decentralization, but the way I see this, it'll become more competitive and, and if become more stricter, more entrepreneurs.

Stephen: And, and to your point, like stablecoin issuers, there's some that are very like centralized focused, which it seems like Circle is versus some more decentralized trader focus like Tether. So it's gonna appeal to different types of stablecoin issuers and how they approach, you know, their business model. I.

I'm curious, you know, we had William Quigley, we just recorded in an episode. He's the co-founder at the time of Tether and the wax blockchain, by the way. I'm curious. He made a point that, you know, all these large international, global companies are probably gonna start launching their own stable coins.

We already saw that with PayPal. Stripe, obviously, you know, the strategic acquisition of Bridge. What are your thoughts? Do you think like more global companies around the world, like the Knights of the world, you know, the Red Bulls of the world, they're gonna, you know, start transacting just to settle across border.

They're getting hit with heavy FX charges. Do you think they'll start moving into more of having a stable coin option, or will they piggyback off of like already built infrastructure, whether it's BB and k, Paxos or even yourselves?

Tarun: Yeah, I think, I think. Believe in this, like launching a stable coin will be a commodity, but running a stable coin is, is not going to be the same. Right? So, so yeah, you can launch it. There are like a lot of infrastructure providers, right? And even the large banks can do it themselves, but it's not about launching a stable good's, about the dis distribution and liquidity from the counterparty as well, right?

So, and it not that straightforward. It still take a lot of time to build the liquidity, right? Their total market cap is less than $2 billion, if you see, right? So it's, it's even with the PayPal, their, their market cap is less than a billion dollars right now. So it's not about, okay, the big institution is coming up and launching their own stable coin and they will get the liquidity very fast.

So. So I think the, the main thing is, like, the big question for all these institutions are whether you want to get into like the, the router for example. Like you can use, you know, a couple of stable coins between the routing of moving money in and out, but nobody holds it, right? So if you want to off ramp, there is a stable coin which works with the government properly.

You can just hold it for the time when you.

Like people will hold that. Right, like U-S-D-C-U-S, dt and that is actually a real currency. And for that it is very, very difficult, you know, to get the network effects and all that. So that's why we are not competing with the money use case at all. We don't want to go there. I think there will be like huge competition.

What we really want to go for is like the use case in the lowest risk possible. Right. So can you have the similar risk profile what USDC is doing under the hood and what Maker Dao is doing under the hood? Or, or, or, or you know, and then can you offer like a very low risk yield, like a risk free yield to the end user and without having any additional staking locking?

So it's like a new concept we want to introduce on the yield side, not on the money use case.

Stephen: From a compute you know, from a complete entrepreneurial standpoint. Do you feel like you're at the mercy of Paxos? Like what is that? When you're built on top, and this goes for anyone building on top of a, you know, a native blockchain or you know, an application that's building, how do you feel about like, hey, a lot of what you're doing is gonna rely on what happens under the hood, as you say, with Paxos and their stablecoin infrastructure.

Is that a bottleneck for you? Is that a huge risk factor for you? Or is that something that you're like, Hey, we're just happy to be building. Because you know they're taking their time and doing it properly,

Tarun: Yeah, so honestly it's been like more complimentary what we are doing with Pax Source, right? We are more into the defi native side and they're more on the compliance and infrastructure working with like really government. It is a very difficult work in my opinion. And, and at the same time, we have like a huge.

Team to work with the government who, who can talk to the government in their language, right? So it's been like super complimentary and, and our incentives are aligned. So for every SDL held and, and css, DL, we make like a minting fees out of that. So the incentive structure is pretty aligned. Right. And, and the end user is getting the maximum benefit rather than Paxo and us.

So I think the entire architecture, what Paxo is doing with their U SDL is like beautiful. Obviously these are challenges. They're like a large institution themselves, right? These are challenges. We are not like that big right now. So, so yeah, I think overall, but it's been a pleasure to work with the team.

The S-D-L-T-L is 50 million and CS USDL has 34 million out that, so we are major like

Stephen: you're the, you're the core. They're more worried about losing you. You're, you're a core driver. Who's the company? Like, take us back still on this entrepreneurial track. You know, you're in business, you're trying to land clients. Who was the company or protocol where you're like, oh, we, we, I think we have something here.

Like, what was that moment when you're like, oh, we finally landed that whale. And then because you had them, it was able to, you know, you know, build up that demand of people that wanted to work with you after they saw that you're working with certain companies.

Tarun: I think what played like a huge reputation for us is our B2B business. 'cause we had all the major institutions like our Bitcoin and all these, like big organizations use us on a daily basis almost, right? So we had like a huge respect. And then our, our backing is from Tiger Global, Sequoia, and a couple of large investors within the Web3 space.

So that, that trust also breeds like more trust. And then when we launched our stable coin with, with and financial financials. The, the founder there, man like almost started the 2 billion R right? Big in the, which brings trust to us. And when they say yes to us, it's like, you know, gives me a lot of confidence as, as an entrepreneur to, to really bet on this, you know, vision because it's very hard to, to convince, you know, large institutions to, to, to, and recently we announced our partnership with.

GSR for example, or Amber Group, they're one of the largest market makers. They put like some money in, in C-S-U-S-D-L, on their balance sheet, right? So it's like a good beautiful validation as an entrepreneur. Like, okay, you can convince such a large institution go through their diligence process and trust me, it's very big diligence process.

So to go through that and then convince them as a user, right? Yeah.

Stephen: It's all a trust game, right? This is all like, do we trust you with our money and you're not gonna collapse or run off with it. Or there's a back door for the founders to escape to Bali for the rest of their life. Right. I'm curious, how much are you using? Obviously, ai, blockchain, everyone's using it in the same sentence.

How much are you using ai? You know, is there queries you think you can make AI chatbots to help people Maybe ask some, you know, accounting questions of like, Hey, should I sell my NFT right now? And would that, you know, result in the game? What are your thoughts on where you could po possibly use AI in the future, or where are you using it now?

Tarun: Yeah, I think in the platform we are still very strict on adding any new feature because they are coming up with like very large money of using like, you know, like billion plus in aum. Right. And some of the organizations have like a hundred million dollars in treasury assets to trust it. Like everything.

For our US obviously we can make like a chatbot that is not very hard.

Really big use case, especially for us right now because anything can be automated using, using like normal accounting rules. But yeah, I think for tax and, and knowledge base, I think in the documentation I'm very interested to create like a chat bot where somebody is asking, okay, how does it work?

Or, or help you.

But I'm a big fan of ai, like I'm using AI left, right and center, you can say in my

Stephen: what is the application you think you use the most are, do you use it to help you code? Where do you use it the most?

Tarun: yeah, I, I use cloud for coding. I use GPT, the $200 model for deep research. I use X AI a bit sometimes on Twitter research I use. Yeah, I think these are the major ones. I'm my favorite one is Claude, so far.

Stephen: Interesting. You know, treasury management is never gonna be sexy, like mean coins. Right? Like so, and it's similar to what your point about lightning network is. Like functionally, utility wise, it made sense. We even had William talking about wax blockchain and delegated proof of like, it, it makes sense the utilities there, but it's almost like the industry is not looking for utility.

They're like, you know, forward thinking to speculation. How do you see or look upon the future of treasury management and accounting and Web3? Do you need a rebrand to make it like more sexier? You're like, Hey, we're not trying to be sexy. We're trying to be accurate and diligent, and that's where, that's where we're, we're gonna sit.

We don't need to be popular. We need to be trusted.

Tarun: No, it's a beautiful way to think about it. I think we wanna be sexy for institutions. How about this? Right? So, and, and for retail and all, I think as a brand we are doing a lot of work and in our, our. Definitely our TGS on the horizon for the stable coin. So there will be definitely they can, if they want, they can speculate on the upside of the company, like do in stocks.

Right? But at the same time we are very stringent. We very, very strict in terms of focusing on institutions and. B2B and really large treasuries. And for them I think we are very sexy. So, so yeah. I think as long as the risk management is, is institutional grade we know we are doing the right thing.

And end of the day, any retail can utilize our products and use it, but we don't actively promote and then want to go there. It's like a, sometimes it's a blood path, to be honest, in crypto to, to listen. Too much noise. Yeah.

Stephen: And there's a lot of accounting type software. It feels like everyone's doing a little bit of difference. You know, there's tax bit, there's bit wave. There's, you know, our friends, I trust finance. Where do you feel like, you know, people are coming to you maybe versus the other competitors for certain things?

Where do people are like, oh, we come to Coinshift for this.

Tarun: Yeah. Yeah. I think they, they are like generally like crypto accounting full subledgers, which, which is like acting agnostic to the chain, right? So you can put your NE address and they'll be doing the accounting for everything. And they're much more advanced softwares. To be honest than us, we are focusing as like a brex or murky use case where you are doing the payments from your bank account, right?

Can you just tag it on the spot and, and, and, and you know who pays what, right? So when you are going to an accounting solution, like, let's finance or, or way, or. Even tax be, you don't know the context of the transaction. The context of the transaction always stays where the payment has been done. Right?

And there are no merchant codes like in trade fire you have with crypto. So where are those merchant codes that sets on Coinshift, if you see right as an analogy. So we are a payment system which helps you track and, and which helps you sort of, you know, manage your categories and tag and all that.

You're not like going deep into the account to be honest.

Stephen: Awesome. Are you using any blockchain analytics tools? I'm assuming if funds are coming in, their funds going out, are you using any tools to make sure. That, you know, an address that they're sending to isn't like a North Korean hacker that, you know, you know, integrated within their system, or they're paying somebody that they should be in the country.

You know, that's, you know, sanctioned. How do you manage, you know, your own compliance, especially on behalf of so many high ranking users.

Tarun: Yeah, it's, it's a great question and definitely there are a lot of security audits we do under the hood for our users and all, all these hackers, as you know, right? They're like unique ways. They find out how to hack your systems. As, as you know, the recent buy hack as well, right? The safe backend was compromised, so definitely.

Make sure Right. You are secure, so, so we has banking and India. Right. For a very long time. So the way we really want to think about this protection is, first of all, we are a gated system. You cannot just like B2B platform, you need to apply for the access first. And we verify the person who is using this, right?

And, and it's an approval process from our side. And we kept it initially to, to cut down the noise and bots from the system, right? And, on B2B. So it's a cost for us. Right. So, yeah, I think we pretty much know all of our customers as a customer relationship and, and we really protect in terms of like our, our infrastructure security, whether like, you know, how the developer pushes the code on fraud and all these things like constant check

Stephen: Awesome. What is, you know, you talked about, you know, being very specific on what features you wanna add and not spending too much time on things that aren't gonna add value to your institutional customers. What is on the roadmap for Coinshift? Is there anything you're interested in, partnerships you're looking to align yourself?

Any t that you can give us on what Coinshifts up to especially going in the Q2.

Tarun: Yeah, I think our major milestone right now is to go grow that stablecoin. And TVL, once it grows $200 million, our B2B clients have $200 million plus worth of US C sitting idle right now. Right? And we want to offer C-S-U-S-D-L there in that R B2B solution so that those treasury should not be you know, sitting idle, right?

They can make like a risk. Then we want to get into another other stablecoin reserves because we are a very safe collateral. So CS s DL with, with our stablecoin, you can borrow ustc up to 96%. It's a very safe collateral to use at any given time while earning the entire yield. Right? So you come up with your $10 million, for example, and you can borrow 90% of that in USC while still earning the entire interest rate on 10 million, right?

Stephen: Interesting. And what would people be pouring against? Like is there any scenarios that people would be pouring against that, you know, $10 million? Is it like to, you know, are they using it in their business operationally? 'cause they're still making a yield on the, the full amount anyway.

Tarun: Yeah, the, the, the cost of capital in crypto is very high. For example, let's say you are a market maker or an institution and you are coming of, let's say 10 million and, and you wanna put in CS US, dl. But you know, like, okay, I can borrow the USDC at 10% rate, and I know with this USDC, I can make more interest rate outside.

Right, so you are earning both the yields and you're canceling out almost the, the borrow rate. So it's up to the end user. We wanna make cs US deal very liquid asset so that they are very confident they can liquidate it very, very easily. Right? Either through the borrow side, because 96.5% is almost like, you know, very less risky, right?

In terms of you can just get your entire money back if you see. So yeah, that is like our unique value proposition.

Stephen: I love it. You know, you're, you said you were you the types of AI products you were using. What are some of the other maybe nerdy things, especially when you get into like software developers and engineers, there's some things that they're doing on the weekend that end up being the things that everyone does in real life, and AI probably being one of those examples.

Is there anything that people are doing that you're like, oh, this is. This is a little new and I don't think a lot of people have caught on, but I, you can see it catching on in the future.

Tarun: Yeah. For me, I think I always love to see like unique patterns on how basically you can combine TFI and Defi, right? And recently, like on finance is launching their own L one, and at the same time Athena is working with Securitize to launch their converge on chain, like the settlement layer for TFI assets.

So yeah, I'm just. These days, I'm just learning how to combine these two worlds. And I'm using definitely deep research a lot by, by chargeability, like the, the largest plan, like $200 one to really learn the trade. Five right. And, and maybe some interesting primitives we can also build for CS USDL.

Yeah.

Stephen: Interesting. What do you think is keeping some of the trad five people even up to today with Bitcoin Spot ETFs being approved, you know, and Ether approvals, or Solana, you know, and XRP submissions. We have so much happening in the US and other regions around the world. Would you think the reason that some Tradify institutions are still kind of on the sidelines and like don't wanna dabble in Defi Web3 or even crypto

Tarun: Yeah, I, I think it's always like, you know, are also competing with their peers, right? So they don't care, like whether the crypto market is going up or all. There will be few players who will take the risk first. And BlackRock is one, right? They, they, they have been token, they, they tokenized build like long time back, and now it crossed like 1.2 billion.

So for other asset managers, it's like a really big alarm, right? Like why they are not doing the same, right? And that's how you see from all other large managers. They, they must be thinking like to launch like even 10 instruments on chain, right? Who knows? So, so in my opinion, competition is super important.

And then once we get the few right players into blockchain, everyone else will come. Like we are humans and of the day, and then everyone wants to be number one. And, but there will be only few players will be number one, right? So, so it's like a race end of the day and then similar on a country level.

That's how I see it. If Mica goes more stricter, people will find solutions in other countries. So yeah,

Stephen: I love it. I love it. Tarun, thank you so much for joining Around The Coin. Where's the best people? Place for people to find you. Is it Twitter? Are you on LinkedIn? Very often

Tarun: Twitter. @tarungupta1475

Stephen: Awesome. We're gonna include the link in the show notes. Thank you so much for joining Around The Coin today, it's so interesting about treasury management.

People don't think about it, but it's really what keeping this industry running. Otherwise, you know, once a year the accountants will be pulling out our, their hair and nobody would be getting into crypto.

Tarun: Yep.

Stephen: Awesome. Thank you so much.