Stephen: This is your host, Stephen Sargeant, Around The Coin Podcast. We have a premiere episode, Chris Harms, who's the Chief Business Officer. And co founder of BVNK.

It's a little play on words about turning the banking industry upside down. There are fintech that leverage stablecoins and other crypto assets to make sure they get business to business. Payment Transaction. They're revolutionizing the payments infrastructure. We go deep about building culture within the organization.

We also talk a lot about what's stablecoins and the regulations that are definitely top of mind when it comes to Micah and other locations. We talk a little bit about the regulatory system, but more important, we talk about some of the use cases where stablecoins and companies that want to start accepting crypto and stablecoins, where they're positioning themselves in the market and how they're thriving in emerging markets like Nigeria, Argentina, Latin, Brazil, everywhere you can think of.

This is a really great episode. He's a really great guest, very conversationalist, and this is one that you must listen to. Talk to you soon.

Stephen: Welcome to another edition of the Around The Coin podcast. We have Chris from BBNK. Chris, let us know, maybe tell us what a chief business officer is, your co founder of BBNK. Give us a little bit of a quick background about yourself. And then I really want to jump into some interesting questions because this is a hot topic.

Fintech, crypto, foreign exchange this is what everyone's talking about right now in the industry.

Chris: Yeah. Hey Stephen, it's really great to be here with you today. You know, so as you said, I actually have a traditional finance background. So I spent quite, you know, a couple of years in banking, you know, on different sales and trading desks and that, that really sparked the interest with payments. You know, I guess I was doing payments without really knowing I was doing payments sitting on an FX desk at BNP Paribas.

That's what it was at the end of the day. So that was that. And then effectively, you know, fell down the rabbit hole into Into crypto back end of 2016, really sitting on the desk, you know, understanding and looking at this thing, you know, how could you know, execute a trade in a millisecond, but the settlement actually happened on T plus 2 or even T plus 10.

Let's say if you if the Swift message didn't complete and the payment got lost. So that was kind of my introduction to to crypto and you know, using my payments brain, but that kind of quickly led me into setting up my own hedge fund with my ex business partner and we ran a kind of a multi stratch fund and then you know, ran and launched a crypto fund inside that this was 2017.

So, you know, that was actually my introduction to stablecoins, you know, and we really started using stablecoins early on to move money different platforms, you know, that original use case and that quickly parlayed into meeting Jesse and Don, my co founders in the business. And, you know, we linked up and, you know, we were really looking at like, how could we use Bitcoin originally to do cross border payments and then quickly fall onto Stablecoin, obviously, given the stable nature of it.

So that's kind of what happened there. And I've worn multiple hats in the business, you know, over the last few years. But yeah, right now, very much focused on you know, new bets strategic partnerships, business development, these sorts of things.

But yeah, I guess, you know, maybe to give you a quick background on what BVNK, BVNK is a global payments platform.

And we're really excited about accelerating the global movement of money. So we do that by bringing banking rails and blockchain rails together in a single platform. And that really allows our, you know, 200 plus business customers to do payments at internet speed, which is really exciting.

Stephen: I love it. You have so much there I want to unpack and unravel.

Talk to me about what it was like setting up a crypto hedge fund in 2017. That was the peak ICO era.

90 percent of those were scams or, you know, just

people cash grabbing. Talk about trying to set up a legit operation like a crypto hedge fund, or at least a hedge fund that had exposure to crypto back at that time.

Chris: And linked up with my ex business partner. We really ran a cool multi strat strategy. And naturally we saw crypto as this new You know how to say this new kind of capital formation vehicle, you know, as ICOs were.

So, so naturally it was the Wild West, it probably felt like how some financial markets looked in stock markets in the late 80s and maybe derivatives in the early, you know, late 90s and that sort of thing. So it was super exciting to do, you know, sadly it was the Wild West and you know, it didn't work out exactly how we wanted, but you know, I wouldn't trade it for the world.

It was, you know, a great learning experience and really got me down the rabbit hole. In crypto and really, you know, sparked the interest where taking that payments knowledge I had from BNP Paribas and then saying, well, look, he has a new payment rail, a global payment rail that, you know, transacts 24, 7, 365.

You know, so it really kind of got me onto that whole stablecoin thread and, you know, we just went deeper and deeper.

Stephen: As a founder and entrepreneur, I always think, like, you're thinking, like, even myself, I'm like, let's start a media agency. Like, obviously after the Gary Vee era, everyone wants to do content. If you can act like yourself and get paid to do it and record it, everybody wants to do it. You're talking about crypto 2017, 2018.

Everybody's looking at, you know, how payment's going to solve remittances and cross border payments. What makes you think like, Hey, let me go in and still continue on. Like, is there something that you saw that wasn't being actioned by another organization or is there like, this is such a deep flaw.

This is going to impact everybody that there's going to be enough market share for 10 to 100 organizations, not just BBNK.

Chris: Yeah, that's a good question, and I think, you know, when you approach it, you have to approach it quite cautiously at the time. And there were several use cases, and if you remember correctly, many ICO projects, you know, are promising the world, you know, that it's going to change the world and this sort of thing.

But really, the way I approached it is like, you know, it was quite pragmatic. It's I saw the pain points under the hood being in traditional banking for, you know, five plus years. And then I saw this new technology that made a lot of sense to upgrade, you know, existing payment trails. And, you know, you just kind of had to have a little bit of faith that, you know, this is where it was heading.

And then what we saw early proof points, i. e. You could use these stablecoins like 24 7 365. They worked on the weekend. And then you just think, and through time, if you go back in history and look at technology adoption, better technologies do get adopted. You know, it might just take a bit of time, but if there's something wholeheartedly better, it eventually does get adopted.

I think you got to take a bit of that view, you know, especially in those early days ago, you know, how exactly, You know, how exactly was it going to unfold? We all didn't know, but was it better payments technology 100%? And as you start getting proof points, like customers start using it, new verticals start using it, stablecoin market cap grows, payments volume increases, that just solidifies your confidence in what you're doing and what you want to keep building.

Stephen: Was it tough having conversations with whether it's investors other businesses that you're trying to sell those early days?

Stablecoins was still fairly early back at that time. I think Tether was, and it still is, the biggest one, but it was mainly only used, not only, but it was mainly used by traders, right?

Hardcore traders. In the crypto space what was the conversations you'd have, or was there any challenges or obstacles that people are like, Hey, you know what? I can't touch these because there's not enough compliance or regulation yet. When we kind of create that framework and those guardrails, then we'd love to send cross border payments with other businesses.

Chris: No, exactly that. So at the back end of 2019 and early 2020, when we really started looking at this, you know, this payment side of things, it's, you know, stablecoin market cap was 3 billion. It was very much a singular use case. It had all this potential, but was really, as you said, only really being used for that trading use case.

And what we started seeing was there were. Certain verticals that started, you know, like wanting to adopt better payments technology, just so you get one or two customers, you start talking more. Regulatory frameworks were still very fresh. Obviously, we've got several really good ones coming into force now and over the last year or two. but it's those early, it's those early signs and those early customers that, you know, that trust, that care, I want to do this. But what we found Early on was you actually still had to go fiat, stablecoin, fiat. They didn't actually, they didn't care what rail you used as long as the money got there cheaper and faster than a traditional rail.

So we were able to build infrastructure on both sides. And that's really the genesis of some of the payments we started doing. And what we found is it was fiat, stablecoin, fiat. And then as you moved through time and more businesses started adopting it, more industries were looking at it, they were comfortable holding stablecoins, so they were comfortable taking a stablecoin payment.

So it quickly went to, actually, I'm happy to touch one side of that stablecoin transaction. And, you know, now fast forward 2024, you know, you're seeing, you know, Visa, WorldPay, you know, all these global payments companies, PayPal, all willing to either launch stablecoin products or interact at scale with stablecoins.

Stephen: What are your thoughts around like, before we jump into BBNK, like the payments industry has always been so silent, archaic. Why do you think even some PayPal and some of these companies, why do you think it took them so long? Usually it's these big players that are on the cutting edge when it comes to technology like blockchain, cryptocurrency, and digital assets.

Why do you think it took them so long? Just similar to crypto, it's always going to be used by casinos gambling first, right? Illicit actors first. Usually the payments, they're, you know, payment providers that actually disrupted the industry. Usually they're on the cutting edge. Why do you think it took them so long to kind of adopt digital currencies?

Stablecoins, obviously.

Chris: I think it's that classic, you know, inertia of these very large fintechs. I mean, think about Visa, the original fintech, so to speak, you know, they built such a moat around, around VisaNet, stablecoins come in and can potentially disrupt VisaNet. So they take a cautious approach and try incubated inside their innovation hub.

Same thing with PayPal. I mean, 400 million wallets. You know, really good business. Do you know, are they really pushed to innovate there? And what I, where I think you saw the adoption come was this new wave of fintechs that were coming in and saying, look, I actually want to use this better technology and this better infrastructure.

Payments infrastructure to, to build new products, services, and use cases on tops, whereas all the fintechs who are incumbent, you know, making really good money just don't have that, I guess, push to innovate anymore. So I think that's why I took it. And then naturally we knew that big regulators are, you know, you can't be that innovative on the regulatory front.

You really just have to take the cue from the multiple regulators you end up having as you scale as a financial services business.

Stephen: Yeah, you don't need to take the risk of being first in the industry, to your point, right?

Let somebody else take that risk. You have enough money, you can either buy these fintechs, or you can, you know, mimic or copy the same kind of technology and the eco, the concept yourself later on, once

the kind of regulatory storm clears.

Let's get into BBNK, so it's a play on the words, I believe, or so I've read, turning the banks upside down, which I think is

It's cheeky and it's clever. I love it. What was the funny story about coming up with the name BBNK and turning the banks upside down? There must've been, when you're sitting around at a

table and saying, Hey, what should we call this

business?

Chris: Table. It was back and forth in a Slack chat. But look we landed on BB and k. We, we really liked the name. You know, we had this kind of vision of. You know, the V spinning and going like dollar, euro, you know, sterling, symbols, you know, as it's fun, you know, turning banking upside down.

But you know, as you would know, it's quite sensitive globally to call yourself a bank. There's a lot of regs around it. So, you know, be, you know, pronouncing it PV and K made more sense. And, but, you know, you've always got that little play on words that you can use in, in, in and around customer conversations and with with partners.

Stephen: I think even banking professionals would laugh at that. They would have to find that funny. Now, you know, I think BBNK is extremely deep when it comes to things like product and platform offerings. You're focused on payments, payouts, compliance. But starting with payments, what is the most common use case where partners are coming to your platform?

Like what is the most common use case? And then maybe a little unique use case or something that you might see trending up lately and you're like, Oh, that's interesting. Not a lot of adoption, but very interesting.

Chris: Yeah, so we've got three core Stablecoin use cases or payments use cases and really, you know, what that looks like today, you know, the platform is really you know, if you take the bottom layer, you've got, you know, full licensing on the fiat as well as the crypto asset side, you then have a crypto infrastructure stack set on top of that's node management and, you know, wallet management and that sort of thing, and then obviously on top of your fiat licenses, you have, you know, banking partners that give you access to, you know, to domestic payment trails.

And then on the crypto side so you've got this full fiat suite and you've got this full crypto, crypto asset suite and that blended together allows you to Really three core use cases. One is Stablecoin Settlements. So that is allowing businesses to settle either their merchants. So this might be a payments company looking to settle a merchant in Stablecoin.

We then have Stablecoin Pay ins, which is accept crypto payments. Think of that as like a merchant looking to accept crypto payments at checkout. You know, that can be done through a hosted payments page or a payment link or a full integration of our APIs. And then the third use case, which is a more recent use case that we're quite excited about is one that we enabled for a, you know, one of the leading global HO payroll platforms looking to actually do stablecoin payouts.

into their contractor base who sits predominantly in, you know, in emerging markets. So these are, you know, let's say they're devs sitting in Argentina and looking to take their salary in digital dollars. So those three core use cases. So Stablecoin settlements, more of the B2B use case, Stablecoin pay ins, merchants accepting payments from consumers.

So that would be a C2B2B flow. And then Stablecoin payouts, you know, actually paying contractors, employees, partners, which is generally more of a B2B2C flow.

Stephen: I love that. And you know, I have friends obviously in the industry there in Brazil. They're like, I need to get my pay,

I need to get my income in stablecoins. We can't trust the fiat, they can't trust it. They can't deal with the fluctuation of the

fiat dollar in places like that. How does things like elections or is there any other like global circumstance where you're like, oh, we see maybe more.

You know, of our customers paying out their employees or contractors and stablecoins, or we see more companies switching on that switch of, Hey, we accept crypto or Bitcoin, are there any trends that you see, especially with the elections and, you know, global financial, what would be instability in places like Nigeria and other countries around the world?

Chris: so you, you hit the nail on the head there is if you take a, if you take a hundred foot view of like where stablecoin adaption adoption is happening, I guess there's two, there's, you can split it up into, at the consumer level, at the business level, and at the business level, you are really finding. The 24 7, 365 nature of stablecoin settlements really driving businesses to start adopting.

And obviously, for a business to adopt, you need better regulatory framework. So, to your point, favorable regime, you know, you know, favorable governments that are putting pragmatic regulation has really driven some of those business adoption of stablecoin use cases. But more interestingly, sometimes, you know, You know, when we take a zoom out and look at that consumer level adoption, you know, we like, you know, if you look at like, let's take the UK, for example, someone in the UK doesn't really need to use a stable coin.

You have a real time payments trail being faster payments, GVP is, you know, stable and, you know, generally you know, well managed economy when you start going into markets, like you mentioned, Argentina. You know, Nigeria, you know, some other LATAM, you know, some other LATAM markets. Firstly, those end consumers are, you know, quite young.

They're generally quite technology savvy, so that there's actually high levels of technology, you know, technology adoption there. They intuitively understand, You know, purchasing power, inflation risks because of this economic fluctuations in their part, in their country. And then what you find is those consumers are actually the ones adopting Stablecoin.

So to your point, that Stablecoin payouts use case is really serving those consumers who are saying, Look, I can't get access to dollars. I don't want to hold my local currency and I'd much rather keep digital dollars you know, that I can move around 24 7, and that's really driving that consumer level adoption.

And then, obviously, consumer platforms serving those consumers are starting to go, okay, cool, I'm a neobank in Latam, I should probably include a stablecoin offering, you know, and then you're starting to see some of these stablecoins come to market.

Stephen: yeah, because I'm assuming those markets, if you've been around for at least 15 to 20 years, at some point like Greece and Argentina you've gone to the bank and the bank has said, well, you have 20 percent less than you did yesterday and there's nothing you can do about it. So I think those markets tend to hoard money in their mattress for lack of a better concept, but like, that's still hard to do.

If you have all this cash, what can you do with it? Especially if the value of that is, Predominantly going down and stuff like that happens. So, you know, having these tech savvy, as you said, youth, this is their version of keeping cash under the mattress. Right. But now they, thanks to companies like yours, they can spend it.

They can interact. They can get paid in it. That was the hardest part. If you can't get paid, if nobody's dealing with cash, if you're, if your employer can't go to the bank and take the cash out and give you, it's really hard to kind of do that locally. And then internationally, you can almost forget about it.

Cause as you said, you can't even get caught. You can't even get access. To US dollars, if not fiat dollars, what are your thoughts? Like why I'm assuming if somebody flips on the switch and says, Hey, we're a Starbucks or a small coffee shop, we want to accept crypto. A lot of people might look at that like, Oh, they're just trying to get in the news, but I'm assuming, is it complex to like set somebody up?

Or because of companies like yours, it's super easy for these companies to turn on the, you know, accepting crypto sign in their door, convenience store. So it's a little bit easier than maybe, let's say five, six years ago, where it was so impressive when the company was accepting Bitcoin.

Chris: Yeah, so I think we're naturally an online, you know, online payments platform. And so there are some, you know, interesting and exciting companies doing point of sale device. But I think, you know, crucially, you know, we abstract all of that complexity of the blockchain away. So it's a simple integration for the merchant that can be up and running in, you know, if they use a hosted payments page in a matter of days, they want to do a full

Stephen: Oh, wow.

Chris: you know, one or two weeks and we take care of everything.

You know, we. We do the screening using, you know, the train analysis and, you know, crypto screening tools. We you know, provide the wallets, we do the conversion back to fiat, and we settle that merchant in fiat. So effectively, a merchant can add crypto as a payment method, so alongside the credit cards, alongside local payment methods, and add crypto super quickly and actually never have to touch crypto.

So they can give the consumer choice, And then actually just, you know, be settled in fiat. So, and that's really where I think the merchants are driving, you know, driving to actually include this is because they're saying, look, I actually don't need any crypto licensing. All of that is taken care of by us, you know, BBNK and we effectively allow them to receive those stablecoins or receive those crypto assets and be settled in fiat.

Stephen: Almost as easy as accepting credit card at this stage then.

Chris: I would say probably even easier because credit

Stephen: he's, I was going to say, the cost is probably a lot, it's the

same reason why a lot of people in Canada are companies except American Express because it's so expensive for them to take that charge.

That's one credit card I don't accept.

Talk to me, you've, you know, been in business for three years, especially, you know, for more than three years, but the last three years has been tumultuous, especially with Terra Luna going down as the algorithmic stablecoin. How did that impact your business at all? Or even the sentiment of stablecoins?

We know stablecoins used in two thirds of all crypto transactions, which is a mind blowing number when you really think of it. I don't think we talk about enough in the industry. Right. The regulators are certainly looking at that percentage heavily. But did anything, was there any negative impact to the Terraluna incident?

Or was that just, you know, one of those just comes from doing business?

Chris: Done, you know, with Paxos and PayPal, and then you've got generally unregulated, more DeFi centric stablecoins, and these were these algorithmic stablecoins, which Lunatera was one of those.

You know, if you go back in time and look at the history of Pegged currencies, you know, whether they were fiat or the Thai baht in the Asian financial crisis, any sort of currency that tries to peg itself. You know, it's ended in, let's say it's ended in tears. So no one's really found a model. And what crypto, some of those algorithmic stablecoins were doing, where they were just looking to try and find a more algorithmic way to, to peg that versus trying to peg it to the dollar, like some of the previous fiat currencies.

So I think all of those algorithmics are still an experiment. I think there's some really interesting projects out there, but for us as a business, we naturally, Centralized, regulated, given we highly regulate ourselves. We have a very specific token vetting policy. So multiple different, you know, parameters we need to look at to actually list the Stablecoin on the platform.

These are, you know, reserves is firstly, is the Stablecoin issuer regulated? Where are they regulated? How do they manage reserves? Are the reserves backed by US treasuries? Bank Deposits, you know, or, you know, or Bitcoin or these sorts of things. So all those parameters then feed into what sort stablecoins we add.

And therefore, you know, because of that token vetting policy, we were obviously not exposed to Terraluna at all. And so it didn't really have an impact on our business. And I think. It quickly became, you know, the market quickly understood post that, that look, this wasn't the same as Circle, you know, it had flawed economic incentives baked into the, you know, into the smart contract.

And and just using digital dollars, you know, think of it like money market fund on the blockchain effectively just giving it 24 7, 365 access is really the way to go. And especially for the payments use cases that we enable.

Stephen: How manstablecoinsns do you offer? Because it doesn't seem like there's a lot, like, I think most people can probably name the top three. But how many do you offer? Because you named a couple algorithmic ones there that other than Terraluna, how many do you offer on your platform?

Chris: So we only offer the decentralized regulated ones, so that would be Circle, Tether, PYUSD and FDUSD. Which have picked up a lot of the BUSD, the Binance Market Cap, the Binance Stablecoin that got shut down from by Paxos. So we've got those four and then we've obviously got, you know, let's say top 15 crypto assets because, you know, through our gateway you can obviously receive and accept crypto as well.

But you'd find 90 percent of the, 95 percent of the payments are really stablecoin related.

Stephen: I love that. And how are you talked about regulation. How do you balance this regulation, especially in certain jurisdictions? It looks like, you know, maybe Tether won't reach, you know, the satisfactory requirements in this jurisdiction, but they do in other jurisdictions. How do you manage that internally?

Or you're like, Hey, well, Tether could be used in ABC. We have Circle here for XYZ. Is that how you kind of cover your basis? They just can't touch each other in certain jurisdictions.

Like, how do you balance all those different global regulations, especially those that are emerging quite rapidly, I would think. I don't...

Chris: So because we're a global business and have really been executing on a global licensing strategy over the last few years. You know, and that comes with, you know, finding the best regulatory talent to go out and get our licenses, finding the best compliance talent to actually operate those licenses once you take them live.

And that really alludes to, you know, You know, we've got a Singapore MPI license application in. So that's kind of the APAC side. We have, you know, licenses in the EU and the UK. And then obviously we starting to get MTL licenses in the US that again, allow us. So because we have these global hubs covered, you know, obviously Asia, you know, Singapore for APAC, EU and the UK for, you know, for Europe and the UK and then the US for the US, we are able to You know, I guess piece together the right flows and and I guess, you know, the right payment flows for different merchants and exactly which merchants should be facing which entities.

So I think because you're globally regulated and you can, you know, piece those payment flows together and onboard merchants in the right jurisdiction, it becomes a lot easier to actually serve certain markets. And then also it, So certain, you know, list certain stablecoins that might only be able to be you know, be listed in a certain market.

So by having that global coverage and that licensing team and that regulatory and compliance team, it's really put us ahead of the game in terms of being able to ring fence certain use cases and certain issues.

Stephen: And that's one thing I saw on the website, it's kind of like this compliance first attitude. He gave us a little bit of insight there, you know, we don't see many fintechs taking this compliance first. They'll be like, hey, we'll do compliance, but this, you never really see it as one of their options. On their website.

Talk to me about why that's important. I think you said like, Hey, if we need stablecoins and certain regulations, that's also sounds like anyone listens to this is like, that sounds like a heavy and expensive load. Talk about us, you know, speaking to investors or your C suite team of the focus on compliance, because it usually comes from the top and trickles its way down to the people that are probably dealing with the businesses that you're working with.

Chris: Yeah, I mean, it's such a vital point to any payments business and especially, you know, we recognize early on as a leadership team that we wanted to be, You know, one of the most regulated, you know, crypto payments businesses in the industry. And, you know, we aggressively went out to execute on that strategy.

And I think You know, if you want to land the biggest and baddest enterprise customers, you need to have the best regulation and, you know, be a, you know, have that right, you know, that top talent and that team to really operate these licenses. So that was really the strategy is like, because BVNK sits at this intersection of blockchain payments and bank payments.

And we, we truly believe that, you know, stablecoins and blockchain payment trails are really the next innovation in, in, in payments infrastructure. And if you think. You know, over time, these blockchain rails are going to weave into, you know, traditional payment rails. You need to then be regulated on both sides.

And, you know, with that comes you know, as you said, there's a heavy compliance burden, but a burden that we are happily and, you know, happily you know, leading with, because it's the only way you can really Build the business you want for longevity, for staying power, and for really landing these enterprise customers we have ambitions to land.

Stephen: Talk to me about the regulation a little. We saw, you know, the U. S. is struggling with finding the comprehensive regulation. Mika seems to be off to the races there in the EU. But yeah, as you said, you have places like Singapore, Hong Kong now, and even Dubai is starting to get involved with their, you know, what their requirements are for a Durham backed stablecoin.

What do you think about, are you like one of those crypto, or FinTech companies are like, yes, more regulation as clear as possible is the better because we're willing to comply or is it tough for you to operate in markets like the US where it's kind of, you know, come, you know, regulation by enforcement is what a lot of people are saying, but this is a lack of guidance.

I don't think that's completely true. I think companies know what they're, Supposed to do to kind of like dabble around that gray area and sometimes get burned. What are your thoughts about the regulatory space of stablecoins around the world?

Chris: Yeah, I think, you know, it's come a long way over the last two years. You know, let's put it that way. I think there's some really you know, the topical one at the moment is obviously Mika in Europe. You know, that kind of came into force at least in its first instance at the end of June.

Us as a Casper crypto asset service provider in the EU need to be compliant by the end of the year. So there's these pragmatic regulations coming in to your point, you know, we want more clarity, more guidance on how to treat crypto assets, specifically crypto assets for payments use cases, because that's obviously slightly different for investment purposes.

So I think that clarifies, that clarity is coming. There's obviously a stable coin bill in the US the UK government, you know, also mentioned they'd be putting out a stable coin a stable coin bill or, you know, legislation later this year.

So I think it's all heading in the right direction.

We obviously welcome that and, you know, are fully staffed up to, to deal with these regulations and get those licenses and operate in a regulatory compliant way. And yeah, I think it just adds credibility to the industry, but also allows bigger you know, allows Stablecoin payments to seep into the fabric of the payments ecosystem where, you know, like, like I was mentioning earlier, big enterprise customers are now able to use it because they've got regulatory clarity.

They're allowed to enable Stablecoin payouts in their platform. So we're quite excited about these new regulations coming. Obviously they come, you know, with a lot of you know, with a lot of work behind the team's work, you know, late hours, there's a lot of Late nights, getting applications together, you know, forming policies and procedures, making sure that those, you know, those are fit for the regulation and then obviously implementing that and then running that.

But you know, I think we're really confident in the team that we've built and it's led by ex banking professionals and you know, ex, you know, even ex law enforcement professionals who've been doing financial crime and compliance for quite some time. So, you know, we well prepared and ready for it.

Stephen: I love it. You know, there was a Forbes article talking about Tether linked to money laundering. Now, I'm a former Bitfinex investigator, so I love the team at Bitfinex and Tether. I'm not really trying to like point them out specifically. What do you think about that? Do you just think like, well, if Tether's doing most of the transactions, there's going to probably be most of the money laundering, just like the largest banks are going to have the most transaction.

Well, what are your thoughts about, you know, illicit actors using stablecoins? Which, in fact, many of these stablecoin issuers can actually freeze or redeem the stablecoin and pretty much make some of that stolen crypto assets like, you know, Tether or Circle make it almost useless to the criminals.

What are your thoughts about stablecoins being used for crime?

Chris: You know, so I think there's definitely a bit of a misconception. What we actually find quite exciting about the blockchain is that you have such a great view. The transparency that the blockchain gives you to look into different payment, you know, to look into the entire payment chain. So we always, you know, we've hired, you know, like I mentioned, very senior, you know, compliance folk from banking and they always come in and they're so surprised at what a tool like Chainalysis can give you.

You can basically see a payment from the origination of that first token generating event through its entire history, every single wallet that it ever touched. So with that, armed with that information, you can make way easier risk decisions and that sort of thing. And then to your point as well, companies like Taylor are actually able to freeze USDT in certain wallets if it's, you know, being linked to illicit, you know, illicit illicit activity.

So I think there's a bit of. You know, headline grabbing with some of that. And if you actually go one level deeper, you actually find compliance professionals and financial crime professionals love actually working in crypto because of all the information they get and the intelligence community that's built around these tools in crypto.

And and that gives them a lot more control and a lot more comfort that they can risk rate and risk all these things properly. And then to, you know, I guess to your point exactly, you know, with, you know, you could argue with the same sort of The same sort of thing on the dollar, like the USD, you know, US dollars are used for more illicit activities than GBP and Euro, but that's purely because US dollars is the, you know, the world's global reserve currency.

Think of Tether a little bit in the same, you know, in the same vein within the crypto space. But, you know, I do think it's important to note that the blockchain gives you way more transparency than you'd have in the fiat world. You get way more intelligence and enriched data to understand what's happened to that transaction and therefore can actually do more You know, de risk financial crime, you know, a lot more than you can in the field space.

Stephen: I love it. You know, obviously I'm a big Chainalysis supporter. We, I produce their podcasts and a lot of the work, the training that they do. But I think as a former, you know, investigator at HSBC, I'd much rather see the Chainalysis tools show me the flow of funds. They're trying to like, you know, look at a badly scanned check to see if it was modified or fraudulent in any way. And I think once you show the tool to people, and I'm a trader, so once I showed it to people, they're like oh, I get it now. This is why this might not be the best tool For money laundering. Is there going to be money laundering? Of course. Is this, if I'm a criminal and I say, Hey, do I want a hundred thousand dollars in cash or a hundred thousand dollars of stable coin?

I'm probably going to choose the cash every day of the week. So it's just one of those things. Talk to

me about Layer 1. This is, I love, we, you know, we always talk about blockchains here and protocols. Layer 1 seems to be pretty revolutionary from like a full ecosystem payments play. I don't even want to try to describe it and not do it justice.

So tell me a little bit about Layer 1 and probably the excitement that goes on within the organization about this platform.

Chris: Yeah, so, so layer one was it was one of those us scratching our own edge, you know, so to speak. So, you know, early on when we started, You know, our CTO Don you know, there was no Fireblocks back then. So he had to build, you know, build a lot of it, build a lot of the crypto infrastructure stack himself, figure out how to do security and all this sort of thing.

And, you know, through time we had a mixture of our own crypto infrastructure as well as Fireblocks. And then, you know, we really struggled with with actually just being able to do it exactly, you know, the way we wanted to do it. And you had bugs and, you know, uptime issues and these sorts of things with some third party providers.

And what that, and it wasn't really a lot of those solutions weren't really geared to payments use cases. And then us being a payments business, we wanted to, you know, a seamless a seamless crypto stack that works specifically for payments use cases.

So, LayerOne is essentially our crypto, you know, infrastructure stack unbundled.

As a product that other companies can now use. And, you know, BVNK is the first customer of Layer 1. But, you know, at its core, Layer 1 is core infrastructure for stablecoins. It enabled businesses to swiftly launch stablecoin payments products without actually ever having to develop their own technology.

Or even have any blockchain engineers on staff. So, it includes a vault where you do key management and store crypto assets. It includes treasury management where you could sweep wallets spin up new wallets sign wallets to end customers. It has a payments module to allow you to do these pay ins as well as pay outs.

It then also has a, quite a sophisticated trading engine. Which allows you know, any payment that comes in, let's say in stablecoin, actually wants to get out to euros. So it will route the best way to a multiple liquidity venues to actually source the best liquidity and best execution. And then obviously, finally, super important transaction screening.

So it allows you to take your chain analysis or your elliptic credentials, plug them in, and then actually do the screening on these as well, using your credentials. And I think the number one, or the crucial thing really, it's, you know, it's self custodied. And it's self hosted in your own AWS environment.

So that's quite key where, you know, BVNK never have any you know, can never see your data that's all hosted. And so, you know, that security is right up there.

Stephen: And who are like their top customers, like who's knocking down the door to get access to Layer 1, in

your opinion?

Chris: So these are less technology savvy, let's say, OTC brokers. They need to manage multiple different, you know, crypto assets. So they've really, you know, so some of the first customers that are going live or OTC desk looking to look, I want one place to do all my digital asset and treasury management, super easy to use.

I have a UI, like a, you know, a banking platform. I don't need to have a bunch of engineers to figure out how to integrate with fireblocks et cetera, et cetera. So those are some of the first use cases. We're also seeing payments companies who are. And they have fiat infrastructure today. And they're like, look, I actually want to launch this, but I'm not going to go off and find a node provider and a wallet as a service provider.

And so it's like, I actually just want to launch some payments use cases, you know, they can take layer one and quickly launch a pay in and a pay out product using the tech stack. So those are the first two real verticals we finding product market fit in,

Stephen: Could you see it being used in places like Saudi Arabia, they're building this kind of like smart city, Neom, where it's like, I don't know what the payment structure is, I'm assuming with a futuristic city like that, or like these startup cities that you're seeing people congregating in one general area.

Can you see an organization, you say, Hey, this is what we want to power this city. We want kind of its own infrastructure. That's a little bit outside of what everyone else is using. Can you see smart cities kind of adopting this technology and being like, Hey, we have one thing that everybody's using within this like confiner parameters.

Chris: but I think it's, you know, you could think about it like. You know, you're going to launch a new city. You know, what do you, how do you want people to exchange economic value in that city? Do we want to build our own real time payments network? Probably not. There's this thing called blockchains.

They work super well. They scale, they can do, you know, high throughput. And then there's products like LayerOne that allow you to quickly launch you know, payments use cases on top of that. So I think You can definitely see I guess a little self sovereign you know, cities popping up and using crypto technology as the main payment rail, the way, the main way to transfer economic value.

Stephen: You we can have a discussion about stablecoins without talking about central bank digital currencies. Obviously at a different size and scale there was an interview that we were hosting with Chainalysis and Circle, where the Circle professional was like, hey, the government's great, but, you know, you want the government making regulations for planes, you don't want the government to actually be making those planes.

And that's what it feels like to tweet with CBDCs. They're great to regulate stablecoins, but you don't want a public sector company, you know, creating digital assets like a CBDC when the private sector's already done such a great job. What are your thoughts about CBDCs and how it plays into your world?

Chris: you know, CBDCs, I think nation states have, you know, taken a step back and looked at the development of the crypto industry over the last couple of years. And then to, you know, to your, to some of the points we were discussing earlier. You know, payments does seem to be crypto killer app, you know, over the last, you know, specifically over the last five years, if you look at, you know, volumes of payments going through and the growth in, you know, stablecoin market cap.

So, nation states are obviously, you know, looking at that and going, look, I don't want to lose control of my currency and then saying, like, how do I bring this in house and exactly to your point. I don't think they're the best to build the technology to run. You know, many of them do run their local payment systems, but again, that technology is, you know, is outsourced and built by a third body.

So I think, you know, they taking a look and experimenting. I don't think many of these projects actually come to life. But you know, at the end of the day, you know, markets outside of, you know, if you think about those emerging markets that have like Nigeria with the e Naira and these sorts of things, fundamentally, if you're, you've got runaway inflation, economic issues.

Your citizens still do not want to hold your currency, whether you put it on the blockchain or put it in the, or put it in cash, you know, under your mattress. So they're still going to opt for dollars, whether that's dollars on the blockchain or dollars in a form. So I think it's a, it's telling to see.

You know, some of these emerging market, you know, CBDC projects fall flat, but I think that's just the nature of, you know, they're not going to fix their economic issues by putting their local currency on a blockchain.

Stephen: That was going to be my next question. Like, what do you think these jurisdictions like Nigeria and Venezuela are doing wrong, but that's exactly it. If people don't want it in Fiat, there's a small chance they're not going to want it in any other, you can put it in digital, in writing, signal. They don't want any of it.

One thing we don't usually get a chance to talk about on this podcast is actually around company culture. You pride company culture there, and I see why. Glassdoor reviews are through the roof. I think it was 4. 3 or 4. 6 out of 5, which is obnoxiously great, right? When you think about the type of employees you've had and are still there.

What are your thoughts about, like, how do you prioritize good company culture? It's funny, I had an event yesterday where we had a company culture person come in and give some expertise. And what he said is where you put your resources and your investment, right? If you look at where everyone's spending their money, especially we see in the crypto industry, you know, buying arenas, you know, renting yachts, putting your, you know, your logo on race cars, but they've never had an internal meeting with any of their team members.

There's no HR or people department. What are your thoughts about kind of putting your money where your mouth is when it comes to company culture?

Chris: Yeah. I think, you know, at the core of like building a strong company culture is like, firstly, you want to be mission driven and working at the edge of some, you know, some new, I think, you know, You know, some new industry and trailblazing. So, you know, we have this mission of accelerating the global movement of money.

I think the people that come and work with us are looking at us and going, look, I want to be a part of this. I believe in stablecoins and crypto as an, you know, as the next version of payments. So, so we find like it almost self selects for some of these people, but then at the end of the day, it's high trust. A high trust environment. So if you bring in A players, firstly, they want to work with other A players. So if you have a relentless focus on, you know, high talent density, you get A players in, they super pumped, you give them a lot of responsibility and you give them the ability to make decisions and execute.

And then there's high trust between and within teams. I think, you know, culture takes care of itself. So you it's that, you know, we really focus on, you know, speed, intensity, integrity, these are the, you know, some of the values of VVNK and it's, and we really live those each day. You know, like, what does that mean?

We spend a lot of time. Given we're a distributed organization, we spend a lot of time getting teams together because obviously that just breaks the barrier. If you're speaking with someone in person. So we do a lot of meetups with the team and Yeah, I think it's really just that, you know, give the guys high agency, a lot of trust, working on really hard problems in a mission driven company and you find that the output is these 4.

7 ratings on Glassdoor.

Stephen: I think people really underestimate what an offsite is. They think it's like, oh, these team building exercises, but the offsites I've been to, it's like sometimes you see somebody in a different department, you're happy, you wake up early in the morning to go for a run and they're there having breakfast at the same time, you sit down and talk and then you build that connection.

I don't think people value that as much as They probably see these TV shows and they're like, oh, it's like, these are just a fancy way for the company to spend money. But I don't think they realize, like, especially the digital nature, the deep seated connections that a good offsite will bring.

Chris: No, absolutely. It's vitally important. You know, we found that, you know, a team can go away and, you know, this doesn't even need to be company wide. You can go away as your function, you can go away just as your team, you know, just getting out of that work environment, not speaking to someone through a screen because a lot of the team are just.

Distributed getting to know them on an individual level when you start getting into friction situations. And that trust has been developed. That's when you can move fast and, you know, and get through these things and it doesn't create a wheel spin and that sort of thing because they trust each other.

They you know, they spend some time, they know, you know, each other's family names. They know the kids names. They you know, some of them spend time outside of work together. So I think that, that element, you know, is really crucial when you're trying to hyperscale a startup specifically, because naturally there's going to be friction and naturally things you It's going to be high intensity and long hours, and it's actually that trust between team members that gets you through gets you through these things.

Stephen: Exactly. when you were coming up with an APBNK. So glad they added that because a missing comma, you know, and a couple capitalized words, I don't know. And you missed the whole tone of a conversation. And super interesting. How about you personally, though? You've worked, obviously, managed, maybe, when you're in, you know, different financial institutions, but it was never your baby.

What's it like when you have to transition and, you know, you're working on teams where it's like, kind of, you're on, it's your ass on the line, for lack of a better phrase, right? It's your baby. It's a little bit different when someone else's baby that's paying you. To kind of manage a team. What was that transition like?

Especially when you're going from like three people to 300 people over the last six

Chris: Yeah. I mean, short answer, it's a baptism of fire, basically. No, look, it's, you know, I think, you know, one thing I've learned over time is like, you have to lead by example, effectively. So if you set the pace and, you know, you set the pace and the company And you worked at, you know, other people will follow that and and give you that, you know, give you that energy back.

And then at the end of the day for us, for a startup and, you know, for teams and a speed and intensity or competitive advantages, you know, like doing things quickly with a high level of intensity and really good focus you know, you'd be surprised at what you can deliver with actually quite a small team, you know, and we've really, you know, really focused on, on scaling in phases doing a lot for the small team, getting to a certain level in the business, you know, then going through a bit of a hiring spurt and then resetting, betting that down, building that trust again, ready for the next push.

And as you've done that, I think each level, it's felt less less chaotic than you would think going from like three to, to 300, but it's because of these phases, you know, you go, we bet it down you then go again you bet it down again and you go again and the next thing you think you've got a pretty sizable team, but.

You know, still operating and executing at pace with intensity.

Stephen: I feel like I'm challenged at three. If you have a team of three people, I still think that's fairly challenging. So I'm glad it gets easier. It maybe stays the same based on your perspective.

Talk to me a little bit about the conference that you guys hold. Half day conference, you just had a second year, you're probably building, you know, bringing in your clients, customers, people in the ecosystem to discuss payments, especially currency, LDN, I believe the name of the conference is.

Give me a little insight of what are people learning, what are people doing there and where you see this conference going, to be one of the pinnacle conferences.

Chris: Yeah. You know, so, I mean, firstly, absolute shout out to our marketing team who hit the ball out of the park every year with this. So yeah, exactly that. We have a, we have our own conference called Currency. We take that on the road to London. That's why Currency LDN, and then we take it to New York. We have Currency NYC.

And it's really just bringing thought leaders from across the payments and crypto space together in a room. You know, agendas are generally about, you know, emerging trends, regulation, what we're seeing from a use case perspective. There's some really cool product demos that we, you know, that we'll do showing some of the interesting and cool stuff that BVNK is working on.

So we really found this format to be great to interact with partners, to interact with, you know, prospects and existing customers to bring investors along So, you know, there's obviously a plethora of conferences, you know, across the crypto and the payments landscape, and we wanted something that we could control the agenda, but more set the agenda, you know, set that invite list you know, and I think, you know, it's been really well received you know, by the people close to the BBNK, and, you know, we expect it to go from strength to strength.

Stephen: That's awesome. For the price of these conferences, I'm looking for you to sponsor, get someone on the stage. It's probably cheaper to hold your own conference anyway. Has there been any changing themes? Like obviously, you know, conferences, you're trying to appeal to conversations that the wider industry has AI stuck into the conversation a lot more.

Like, what are your thoughts about anything that's kind of come up in the conference where people are like, Hey, they're kind of talking or taking sidebars and having chats about it more.

Chris: Yeah, I think just. As much as like we sit in stablecoins, this is our bread and butter. We live and breathe it every day. It's actually hasn't permeated, it's not yet mainstream so to speak. So even in, you know, in, within payments itself, you know, there's multiple different, you know, payments technologies, open banking, there's, you know, cards are still, you know, massively adopted around the world.

Local payment methods are still on the rise. So I think. Stablecoins generally is still that topic of conversation. Obviously there's sidebars, you know, you know, when, you know, the real crypto native folks are talking about, you know, that topical crypto you know, crypto project at the moment or new things we're seeing in DeFi or that sort of thing.

And then also I think what's been more and more, what's creeping more and more into the conversation is, you know, Is these the regulation and the compliance elements and, you know, this kind of financial crime compliance you can do with Chainalysis. And, you know, we recently had the Chainalysis team do a showcase on how we use Chainalysis in our business at our events in London.

It was super well received. You know, people's eyes were like, this is amazing. Like we spoke earlier, like, look, this is exactly all the stuff that you can see. So I think it's those. You know, those things that, you know, Stablecoins is still new and fresh. So there's still a lot going and talking on there.

It's like, okay, but what are the risks of that? And then how do you mitigate those risks using these compliance tools pragmatic regulation? So yeah, I think it's all of those things around, like, how do we actually bring this Stablecoin to the market? Payments and stablecoin infrastructure mainstream to show you know, that it really has a place, you know, as a new global payment trail.

Stephen: I love it. I want to touch back, you know, when you're talking about growing your team, we saw technical layoffs have been massive over the last couple of years, dating all the way back to 2021 when we had this massive boost in the industry from a day little nature that went pretty much downhill from there.

We're kind of level setting now. How do you make sure that you're growing but not getting too fluffy or, you know, too bulky as a team? They have the joke like either you're growing or you're bloated, right? The two kind of dichotomies of building a big business like you're doing. How do you kind of balance that without trying to grow too fast and having to lay off people, but with also trying to take advantage of these times when the market's hot and, you

Chris: you know, we've really had one eye on profitable growth, not, you know, and versus growth at all costs that you would see, you know, and I think maybe that's just maybe from where, you know, we're at. Jesse, Donald and myself are from South Africa.

So I think you, you had to have a few fingers in many pies to really build a big business out there. Slightly different way to to build and and scale a business versus somewhere like the US where it's, you know, go out and get it, growth at all costs. So I think that, that kind of mindset with that, Scale, bed down, you know, as I was explaining earlier, has really held us in good stead.

And, you know, not that we haven't taken big bets and I think, you know, some of our big bets have paid off, but we have this interesting concept within the business where we have a, you know, 80 or 85 percent of the business and the resources focusing on the BAU scale type activities, you know, and keep scaling that.

And then we have a small team that focuses on new bets where you can incubate small things. It doesn't cost you a lot of money. It doesn't You can fail a couple of different times and you're not, you know, you're not disrupted the BAU. You can, you know, you're still seeing the growth that you need, but then, you know, if those new bets pay off, you can quickly add, you know, you can quickly add resource behind it, then move it into that BAU and that kind of framework to operate and build new products and launch new verticals and new bets has proven successful over the last, you know, over the last two years.

So I think we'll keep doing that. And that really keeps you on the right side of that cost curve.

Stephen: Yeah, and it keeps people still babbling, right? And it gets probably people excited, right? When they're doing the same thing over here, business as usual, it's always fun to kind of go on those projects where there's not the risk of losing anything or KPIs or, you know, getting business results from that.

And you mentioned new products as we end the podcast. What are some new products, features, what can we expect from BBNK?

That's still good to me to turn the banks upside down in 2024.

Chris: Yeah, so we've been you know, we're quite excited about our US expansion. So we recently received our first US MTL license in Florida. We have 15 other licenses we have 15 other license applications in. So, we're looking to launch USDACH payments alongside our stablecoin offering fairly soon in Q3.

So that's quite exciting, you know, late Q3, early Q4 and then we're seeing more and more demand for our embedded stablecoin use cases. So as I, I talked through the pay ins, pay outs, and settlements earlier, you know, we're finding more fintechs and more platforms looking, Hey, I actually want to put a crypto wallet inside my platform.

And, you know, we've got A really robust you know, embedded stable coin offering. And we're starting to see those come to life. So it's quite exciting to see that those embedded stablecoins. And then obviously the U. S. expansion come to life over the, over Q3 and Q4.

Stephen: I love it and, you know, I have people in the U. S. licensing, there's a whole business around trying to keep track of all those U. S. licenses. As we end the podcast, what do we expect for stablecoins? I know regulations is hot. Is there anything that you're seeing? Maybe the PayPal USD? Have you seen this massive traction there?

Like, what's the future of stablecoins that we should be looking out for in the next 18 months?

Chris: Yeah. So we actually recently released a research report with Visa Circle and the Center for Economic and Business Research. And it's really showing, you know, it really focused on a couple of things, like the growing adoption of stablecoins as, You know, as a payments method. And it's really showing that, you know, we predict in that stable coin payments can get to, you know, 15 trillion by 2030, that's off the back of a stable coin market cap going from 160 billion today to about 1 trillion by 2030.

And that's really providing a bunch of benefits being, you know, the release of trapped capital within. You know, the traditional payment system today it's faster access to stablecoins and digital dollars. It's then also you know, significant more use cases that you can enable through through stablecoins, you know, whether it's micropayments or other use cases in these emerging markets.

So, I think it's just, you know, it's really stablecoin market cap growing. You know, the payments turnover volume growing significantly as well, actually rivaling networks like Visa, you know, it's already overtaken MasterCard and PayPal and I think it's really about that pragmatic regulation coming in and actually, you know, supporting that growth of the market.

Stephen: That's awesome. Chris, where can people find you? What's the best place? Where do you talk to people? I'm assuming CryptoTwitter's gotta be busy for you, but where's the best place for people to find you?

Chris: Yeah, I try to stay off crypto Twitter these days because it's a, it becomes a rabbit, it becomes a rabbit hole. But I, you can get me on LinkedIn. And then obviously BVNK, BVNK. com, you know, if you want to reach out and learn more about the business and what we're doing.

Stephen: I think people should check out the website. The website has a lot of great, you know, a lot of great visuals. Which, I'm a visual person, so I

appreciate the visuals. Of what the, you know, the old system looked like compared to what you're doing at BBNK. And I think if you looked at that old system, you see all those layers there.

Just like layers within the organization, that's never a good thing. Chris, thank you so much for sharing the insights. We love to play on words with BBNK. And we're hoping to have you back in a year. You can tell us after a lot of this regulation comes into play, we can definitely have another conversation of the impact of those regulations that you've been talking about.

Chris: Awesome. Thanks so much for having me, Stephen. You know, it was a great conversation.

Stephen: Thank you.