Stablecoins and the Machine Economy | Nik Milanović, This Week in Fintech / Plaid

And it's interesting because we have seen that the world is split between activities that are unregulated under certain regimes and others that are regulated under certain regimes.

And you see a split where these corridors are working.

I would say...

What has surprised me this year is that it seems that over 90% of the large banking players either have some project going or are already into a project that has to do with tokenized money.

I don't want to say stable coins because I want to put it as tokenized money because it includes also... tokenized deposits, right? And we have seen a lot of activity there, especially recently, I would say the last three months, it's been amazing announcements and the activity that we are seeing from banks.

One of the arguments that you've been making is that stable coins and cards can live together.

And because others say it's either stable coins or cards or...

And especially here in Europe, we have this sort of wishful thinking, if you want, or dream, however you want, depending on the geopolitical color that you want to give to it, that stable coins will free us from crisis.

the dominance of the big card networks that are mainly US-based.

So they are a solution to that rather than really a technical problem.

And there's other initiatives in Europe that are trying also to do that, be it the Vero wallet and so on.

But tell us your opinion, your line of thinking about this topic of stable coins and cards and why you see them coexisting.

That is the dominant question this year, especially because stablecoin card companies, stablecoin-backed and stablecoin-linked cards have really taken off.

You look at providers like RAINN, like REAP, Coinbase launched their own stablecoin-backed card.

This product type seems to be really growing.

And so a lot of crypto hardcore purists are asking, oh, well... why are stable coin link cards a product at all? Like, why don't we just bypass cards entirely and focus on stable coins? I think that question misunderstands the competitive advantage of stable coins as a product.

Really what you're talking about with stable coins, you're talking about a rail and it can be a settlement rail.

It can be an authorization rail for verifying identity.

It can be a money movement rail for being able to pass money and flow more quickly between counterparties.

It can be a ledgering rail where really what you're just trying to understand is exactly like where every dollar is.

There are a lot of different use cases for that rail, but ultimately stable coins are back in infrastructure.

And so the use cases are going to vary.

And you can power card functionality on stablecoins just as well as you can power peer-to-peer payments.

It's just a different way of leveraging that rail.

And companies like Rain are doing really interesting things where they are facilitating credit development on-chain.