He Left a16zCrypto to Build The First Stablecoin Clearinghouse

So last week, we announced, our fundraise of $10,000,000 from a sixteen z, BoxGroup, Sunflower, and many awesome angels to build a stablecoin clearinghouse. A stablecoin clearinghouse is necessary infrastructure infrastructure for mature payments businesses to get comfortable using Stablecoins. And we help those companies have firm guarantees when they move from one Stablecoin to another. I'll give it a little analogy here.

When you move money from a Wells Fargo bank account to a Bank of America bank account, you don't sell Wells Fargo dollars at a variable price to get Bank of America dollars. Yep. And it turns out the more you sent, the more you lost to slippage. It's ridiculous. It's like on its face, we all know this is not how the world works. Yep. And yet, if you wanna go from one stable coin to another, you have to do that trading operation today. And that's not good enough.

And we help those companies have firm guarantees when they move from one stablecoin to another, and it represents an opportunity for stablecoins to become even more commonplace.

Hey. It's Drew. Quick thank you to Altitude for making this episode possible. Altitude is rebuilding business banking for teams on the frontier. They offer the full stack for the modern CFO and founder, a beautifully designed platform for payouts, bill pay, corporate cards, enterprise controls, and so much more. Move money with speed, yield, and total control all from your stablecoin balance. Operate at Altitude. If your business is on the frontier, your finances should be too. You can learn more at altitude.xyz.

Let's do this thing. Sam, I'm I'm doing great. I'm so excited to have you on the show. Thank you. For coming on. Appreciate it. This is the first the first recording of the day in our new new studio. Yeah. This is great. Yeah, man. You you are in such a exciting moment of of your journey. I'm I'm really excited to dive into your story a little bit, how you got here. We'll dive into Better Money and and what you're building.

But, yeah, why don't we start start with kind of the current the current news of the last couple weeks and Yeah. An intro to Better Money, and then we'll we'll dive back into the story a little bit. Yeah. Yeah. Sure. I mean, can start with myself too. Like, you know, I was an investor for a while at Andreessen Horowitz. I worked briefly at the Boston Fed before that. I was an engineer before that. Throughout all that time, I was working on stablecoins,

investing in stablecoins, getting to know stablecoin businesses, and fintech businesses and payments businesses that were considering using stablecoins. So last week, we announced our fundraise of $10,000,000 from a sixteen z, BoxGroup, Sunflower, and many awesome angels to build a stablecoin clearinghouse. A stablecoin clearinghouse is necessary infrastructure for mature payments businesses to get comfortable using stablecoins.

And we help those companies have firm guarantees when they move from one stablecoin to another. So to do a swap or a send in a way that payments companies understand and can trust, we provide that infrastructure. I can tell you more about it, but that's the high level. We make that a lot easier and a lot simpler.

So because this is a this is stable minded, very stablecoin focused podcast, when did stablecoins really start hitting your radar in the journey? Like, what point were you like, woah, there's something really powerful here, a new financial primitive that these things are? Where were you in the journey? Yeah. So to some extent, the journey started a long time ago. I was living in Beijing in 2017.

I was working for Microsoft, shifting a technology stack from Microsoft in Seattle to be owned long term by Microsoft in Beijing and to be operated there. And I started meeting folks who were struggling with international payments while I was living there. That was the first inkling I had of I should really consider if crypto could be a better way to pay. And then like many engineers, I was building startups. I was starting little companies and struggling to accept payment.

Stripe solved this problem to some extent, but even then, it's not as simple as you'd expect. There's actually paperwork involved in payments. This is, as an engineer, something that I thought felt ridiculous, and I think many engineers feel that way. It's not satisfying. It's not clean, I but still hadn't really thought about the business implications.

So when I was at MIT and started working at the Boston Fed on their stablecoin initiative, which felt like a natural progression, crypto involves similar research to what I had done at Microsoft around distributed systems and consensus mechanisms, and it fed on my interest in building some sort of better payment rail. That was 2022, so been covering it for a long time now. So going back to Beijing a little bit. So you were living there. I was there for like three or four months. Three or four months. It it brief.

But you started to see some some of the pain points that things like stablecoin saw. What what did that mean in that context? Yeah. The context there, I remember playing basketball in Stanley two, and I was at this unbelievable outdoor court with, like, a crazy hologram ceiling, like, really epic stuff. And I was taking a break, sitting next to a guy who I just played with, and he was telling me how he was using at the time, it wasn't stablecoins.

It was Bitcoin to hold his treasury because he needed to be able to access a global treasury wherever he was running his import export business. And so that that was one of my my first signals. Again, 2017 is a long time ago in crypto years. Yeah. But that was what first I guess I I must have bought a crypto book and then read the Bitcoin white paper and really got deeper in the weeds from that moment. Yeah. Well, the Bitcoin Standard was like my first moment Bitcoin book. Do you remember what the book was?

Kind of a It was a textbook that I because everything in Beijing at the time was so cheap, I had like bound for me. So was like a PDF. I sent it to a printer and had it like delivered back to my house, like by Didi or something. Like and it showed up the next day. That's legit. Probably way more technical and cool than I don't know. It was a sort of math y book because I wanted to understand it more deeply. Yeah. Okay. So

the seed gets planted in that part of the journey. We had a chance to meet with the Robert Bench and the Radius team. Love Bob Bench. So I worked for him at the Fed. Yeah. Was gonna say, like, what so he he we didn't have a chance to go deep into this, like, MIT, Boston Fed chapter for him, but, like, that scene this group seems like such an interesting place for innovation. Tell us a bit more about what was going on there at that time. Yeah. So first of I can't say enough good things about Bob and Radius.

MIT started as a very Bitcoin centric place. I was always a little bit confused by why it needed to be so religiously Bitcoin at the time. There's the MIT Bitcoin Club still. That's the main hub for for crypto activity at MIT. But the exciting, both in the ecosystem starting around 2021, was the DCI, which is a research center focused on all sorts of crypto and payments activity. And I was mostly involved there. And so there's a few Bitcoin maintainers. Algorand has, like, a little hub there.

Christian Catalini, who's another excellent researcher that you should you should talk to and a good friend of mine, spent a lot of time in that ecosystem. And people were starting to think through both how stablecoins could be used for payments, how the Fed and the Boston Fed in particular should be considering building payments infrastructure. But also, MIT is just it's so creative.

Like, we we you saw all of these interesting sort of tokenized real world asset, or what can we do to track, monitor, and move assets in the real world? All of that was happening simultaneously. Ultimately, what won out was the sort of practical stablecoin payments work that I was excited about, although the broader research is still ongoing.

I'm looking at this from the outside. This seems like such an interesting setup. So you have MIT on the academic side, Boston Fed on the government side. Were you there as a student? Are you a fellow? What does that look like? I was at Sloan. I had this wandering path. So I went from Microsoft where I was an engineer.

I did this research on distributed systems called CRDTs. It's a a type of consensus mechanism used broadly in SaaS apps to do real time co authoring. I went to MIT thinking I would start a company around that research. I built a team from three to about 150 people at Microsoft, and I thought we could take the work we did for the Microsoft Office suite and apply it to all sorts of verticals. And I wanted to meet people who had had deep experience in various verticals, and so I went to business school.

I had a few collaborators who were at the Media Lab and doing PhDs at MIT as well. This guy Jeffrey Litt in particular was someone who I loved working with. Ultimately, it turns out you don't need to go to business school to start a company at all. But I had this crazy run where I was angel investing, got to meet the Cursor guys and invest in them early, met a bunch of other great founders. I must have hosted 40 events.

And so it was just this excellent opportunity for me to I mean, business school is pretty easy to not have that much to do, but at the same time, have all this richness around working at the Fed, angel investing, building stuff. I built a ton of art projects during that that period, which I love talking about. Yeah. What kind what kind of art?

I used to do this this AI art where if you came into my apartment, I had these voice to text engines plus these, like, AI image generators, which now would seem really commonplace. This was before ChatGPT. So whatever you were sort of talking about, the apartment would get rendered on these e ink displays. And that

was a blast. So so it would pick up, like, real time conversation and then display that

Yeah. Like a wall or It's still on my Twitter if you look it up. Yeah. I think I have there must be some video of it out there. Yeah. 2021, 2022. We're getting out of COVID.

Yeah. I did a broken glass series where I was, like, shattering glass and painting it. I just like making stuff, ultimately. Yeah. Seem to be Just like everything you've shared, you seem to be someone who's just sort of biased for action. Let's just go do it, make things, produce things, learn by doing. Yeah. Would you say that's been a quality you've had throughout your whole life? Just kind of go see, see what happens? Yeah. I like

I'm very energized by making things happen and building teams. I think that's just such a wonderful thing to do for your community is to see, like, what can we do together to make things better, more fun, bigger, and

I like I like it a lot. What are you most proud of or going back when you maybe even were a kid or some of the earlier memories of your life with building stuff? Like, what were some of the things where you, as you look back and you're like, hey. That when I was when I was doing that, like, that may have not been, like, the most profitable thing and the most visible thing, but, like, I look back and I'm like, hey, looking at younger Sam, and, like, that's a builder right there. Like, that's what he was doing.

Any any, like, projects or things growing up that you think about? Yeah. Well, I'll tell you the story from Microsoft, which is a I don't think I've ever shared before. We built this project called the Fluid Framework. This was the technology stack that helped us replatform

the native Office suite, so Word on the desktop, to Word in the browser, which looks more like Google Docs now. And there was I started working on it because I met this technical fellow named Steve Luco, who's a great guy, when I got back from China. And I was trying to figure out what I was gonna do when I got back from China. I actually considered working at a crypto company, considered working at Limebike, but I started contributing to this repo he was developing around this this technology stack.

Two weeks later, I'm in front of Bill Gates demoing some software that I had built, a collaborative video editor. And then about six months later, we had done this crazy sprint to build a excellent high quality text editor that looked a lot like Google Docs and how you think of it, but with innovative features around pull requests and agents collaborating in the document. Probably hadn't slept in, like, a week.

I'm sitting underneath a a podium while my team is preparing the demo used in the big Microsoft developer conference. I'm on the floor typing on my laptop. A mentor of mine is presenting it, and Satya is sitting right there being like, who is this unwashed child who's editing this software live? I'm sitting cross legged the floor trying to make sure it That memory is just that was an extraordinary experience, and I was so lucky to be a part of it.

That kind of feeling of building things in real time, the pressure of what a founder might feel. Yeah, and the impact that you can have. And you actually can make experiences better for everyone. It's another similar to what we're doing with the Better Money Company. It's an area under the curve impact story where you don't really think through the average person doesn't think through how much their life would improve if the tools they were using were a little bit nicer, But it does improve.

I think besides the pencil, the thing that most people write with is a Word doc. You know, it's an incredibly common place for people to type their thoughts out, do productive work. They use it every day, hours a day, and we made that just a little bit better, and I'm proud of that. And that's part of that that sort of motivation is the same energy that gets me so excited to help improve payments. We all pay every day. We don't think about it that much.

But if you can make things a little bit cheaper, a little bit faster, or unlock new and creative experiences, you

can just make people's lives a little bit better, even if it's not something that everyone notices right away. Yeah. And and to do it at scale for so many people. The the docs version of this is a really good example because everyone uses something like that, and it's really interesting. Yeah. Talk us through the, you know, journey into Better Money. You spent a lot you spent years in the trenches with so many different founders.

You probably have heard hundreds, maybe thousands of different stablecoin related or crypto related pitch decks and pitches. Like, what was that like, and why this problem? So, yeah, at a 16 z, must have met with hundreds of stablecoin companies. And and not just stablecoin companies looking for investment,

but also meeting with founders who have growing and exciting businesses, meeting with mature fintechs to help them consider their stablecoin strategy, met with a dozen banks, maybe through all those conversations, there began to be more clarity for me that while stablecoins are faster, cheaper, and global, they're really optimized for the trading scenario today.

And by that, I mean, crypto grow up in a world where the primary use case for a stablecoin is to be a Bitcoin pair or an ETH pair or a SOL pair or or any other token. So while they have these properties, cheaper, faster, global, they actually haven't been built with payments in mind. This require a a couple of other features. They have to have a guaranteed time of settlement. If you're getting paid, you wanna know when the money's gonna arrive.

They also should have a flat rate pricing to swap between one stablecoin and another. I'll give it a little analogy here. When you move money from a Wells Fargo bank account to a Bank of America bank account, you don't sell Wells Fargo dollars at a variable price to get Bank of America dollars. Yeah. It's ridiculous. It's ridiculous. It's like on its face, we all know this is not how the world works. And yet, if you wanna go from one stablecoin to another, you have to do that trading operation today.

And that's not good enough. And so that's that's a large part of the problem that we're solving and a little bit of my journey into it. And I'll just say, as I spent more time especially talking to the companies that are serious about their enterprise payment strategy using stablecoins, this problem came into starker and starker relief. And so

this is just the beginning, by the way. There's much more that you can do on top of a clearinghouse, but this became obvious as the first step towards building for the next era of money. What is the so the the word clearinghouse, like stablecoin clearinghouse, what does that are there are there businesses historically that are off chain that that we can look to to learn, here's what a clearinghouse business historically has looked like Yeah.

That you, you know, you can you're we're reimagining it and bringing it into the current moment. But what does the clearinghouse business model look like traditionally?

And help us understand that. Yeah. So there's a famous business called The Clearinghouse, sort of like The Ohio State University. You know, it's a it's a well known entity that connects banks. And the the feature set there or the the maybe the reason to create a banking clearinghouse is so that each bank doesn't need to have a connection with every other bank. I grew up banking at Ridgewood Savings Bank, which is a New York City based bank. Imagine if they had to have a direct one to one connection with St.

Louis First Chemical Bank. So the clearinghouse got started as a way for all banks to have a central clearing spot that they could send payments through so it looks more like a hub and spoke model. You know that if you connect to the clearinghouse, you have all this connectivity for all these other banks. There's other types of clearinghouses that do more trading oriented things where they're matching two counterparties in a transaction.

Here, we're talking about having a place for people to connect to to have this hub and spoke model where you know that you'll be able to reach any end state that you need to reach. Yeah. What what other examples

are helpful here? What other paradigms are helpful to think through this by? I I think those are great examples.

The most helpful thing to think through actually is the first clearinghouses. These were literally taverns, meeting spots, where where representatives of By this one? There's one Five Bells in London that people used to meet up at. It's literally couriers from banks would meet there, and they knew that if they were at 5 Bells, they would meet the other bank representatives and be able to exchange at a fair price.

And so that mental model of, like, we just need a place to meet so we're not running to each bank is actually the way that I would position your mental model. And then you can get increasingly complex, and you can add features like counterparty safety, like having oversight. You can talk about one thing that's especially that we're we're especially focused on is building better payments APIs on top of this clearing functionality, doing things like reconciliation, so offering more first party features.

There's much that you can do on it, but the mental model should be we have a place where we can go to make sure that we have one to one fungibility between stablecoins, and we accomplish that by having relationships

with the issuers that are Genius Act compliant. Genius Act compliant. Okay. Yeah. So in the traditional clearinghouse model, banks are obviously the counterparty in many ways, and then the services that they're offering to their end users are the people who are benefiting from this. What does this look like with stablecoins or stablecoin issuers? Give us a picture of like, who is who is the better money company interfacing with, and who are the partners and the beneficiaries of this clearinghouse system right now?

Yeah. So we have two sides to the clearinghouse.

We have the member issuers, issuance platform, sponsors. So we work with Bridge, Paxos, Frax, MZero, MoonPay, Braille. And It's a great list. Thank you. Thank you. I actually believe I forgot. I'm looking off camera. And then we so that's our member issuers. And we have some sponsors too. We're working with Fantom and and MetaMask. They sponsor stablecoins, and so we can work with them as well. They sponsor both through Bridge, by the way. Yep. And so members, and then we have clients.

And the clients use the clearinghouse to do payments, bridges, swaps, money movement, treasury operations. They do that on top of our platform. So we're working with Ramp. We're working with Privy and Turnkey. We're working with Modern Treasury, and we've got a list of great clients that we've been supporting with with Better Money Movement. And so they would do something simple. They'd say, I wanna move this stablecoin into that stablecoin, maybe from this wallet to that wallet.

We also let people fund payment orders from multiple stablecoins. So if you have a a balance of multiple stablecoins, you can combine those into one payment order and then say the person on the side will receive just their requested stablecoin. There's a lot of reasons why you might wanna use this the clearinghouse. The most common, though, is very practical. You wanna know that you're gonna have a fixed fee when you do this transaction, and you wanna know when the money's gonna arrive.

And you don't wanna think about a lot of the middle steps, and you especially wanna make sure that the the source of funds used to facilitate the request is compliant,

which is something that we can we can offer. It's really interesting. So you you kind of build those standards into what a membership you put those standards on members so that anyone in this group is kind of by nature a part of this sense of compliance under Genius, and Yeah. You you kind of get that by being a part of the Better Money Network. Yeah. It's yeah. Exactly. And and by the way, there's been so much awesome

crypto native work to do swaps that sort of looks like this, but you don't always know who the LPs are in a in a pool, for instance. And and that can be a risk for regulated payments companies. So amazing

progress in, like, a week and a half or whatever. Yeah. Amazing.

We got started in November, and we came out of stealth last week. Got it. Regardless, amazing.

Walk us through, maybe we can think of like, we pick a pick bridge and ramp or whatever the partners that make the most sense to Yeah. Give us one of these examples. But let's just say that we have people within this network. What is an example that gets you excited about this clearinghouse being used in a way that you think is either today, what you want to have happen, in the future, what you wanna have happen. What would be the ideal kind of user experience that a member would have?

What would that unlock for their users that may not be possible before? What's the pain there that they're going through that you guys are solving? Yeah.

So I'm gonna use general names just to make the analogy a little bit easier. Nate's Neobank is launching a stablecoin. They service all sorts of small businesses like, you know, Joe's Plumber and Bob's Barbershop. Nate's Neobank is launching their own stablecoin because they wanna simplify their treasury operations. They want more control over how they manage balances. They want to benefit from the AUM they have. And so they launched this stablecoin.

Now today, they would have to basically go on a liquidity campaign. They'd have to build out a whole trading and operations team, make sure that they're ceding liquidity to all of these venues. Because without doing that, it's really hard to actually access and use the interoperability promise of crypto. And so what we do is we say, look, become a member issuer. And it's a a simple thing that we'll work through together.

We'll have access to the mint redeem facility on your on your stablecoin, and we'll do a couple of other things. And now anyone who wants to use Nate's, Neobucks can get one to one and use this new stablecoin to do a send, a spend, a swap, a bridge, and go from Bob's barbershop to whoever they need to send money to. Bob's Barbershop might be sending money to someone who only can accept USDC or only can accept their own stablecoin. We can facilitate that as well.

It's not uncommon that institutions or just businesses say, look. I I only accept my stablecoin. That's what I'm that's sort of my thing. And we can facilitate that transaction as well. So all of what I just described is quite hard to do today, and we make it a lot easier. I mentioned some other features around guaranteed time of delivery, guaranteed pricing.

One of the simple and exciting features that product managers we work with like is they know they can put a price next to the button that says send because we guarantee that pricing. Like, because today, you've got a variable pricing scheme with a lot of slippage potentially for a low liquidity stablecoin.

It's just easier and better if you say, look. This is what it costs. Yeah. Yeah. I mean, for things like dollar backed stablecoins, one to one show the sleeve. You gotta show one to one. Mean, this thing is one thing. Certainly swag. We got this yesterday, by the it. Love it. Well, having something one to one is so important. Like, if it's not, it doesn't actually function as money. Yeah. And and better money needs to be one to one.

So I think for me, my first my first when I saw this come out and I saw this Clearinghouse and I heard about it, my first my first question or where my mind went was like, and I think maybe other people in the industry are thinking this, is like, how does this compare to even even on the member side, like, the mZero network that they've built, and, you know, they have a lot of these stablecoins that they're solving fragmentation issues. And we work with mZero, by the way. Like, yeah, they're a member issuer.

So how how does the how does this compare to what what is the main value add here is, like, they actually can now interoperate with all these other issuers more happily? Is that the main value add to them? Yeah. I I think if we were to simplify it, like, that's the that's the core thing.

And it's easier now for fintechs, payments companies, banks, money apps in general to use mZero stablecoins because they know they're gonna get that interoperability on day one. And so if you're making a purchase decision on an issuance platform, you're a fintech and you're considering which issuance platform you're gonna use for your custom stablecoin. You want to make sure that your issuance platform supports the Better Money Company clearinghouse so that you have this interoperability right away. Yeah. Yeah.

And ultimately,

all of these different stablecoins, regardless of where they're issued, need to operate like money. I it's it makes a lot of sense to me. And then Yeah. I mean, I'll just say, like, imagine that you went to go bank somewhere, and they didn't have ACH,

which is the product that the clearinghouse enables. You'd be like, woah. What are you talking about? Like, So you're saying I can't send money? Well, no, you can still do regular banking operations. Only through our own branches. Okay. It's not quite good enough, actually. I would really like to access other banks, and so that's

maybe one mental model for why a clearinghouse is necessary. Yeah. What what's the from your side, I mean, know you spent a lot of time thinking about this this Yeah. Specifically. What are the biggest technical challenges to doing this? Like, what is the what is so hard about this problem that gave you enough confidence to go pursue it and believe that you're gonna do it better than anyone else in the world? Like, what is that problem that's so hard about this? It's really multifaceted

because you have to offer a great experience for the clearinghouse clients. So they need to have a great API. They need to have a lot of control over how payments work. They need to understand reconciliation. You, you know, they've gotta be able to see the list of transactions they've sent. They've gotta manage their compliance. Compliance is a very fragmented space, and so you've gotta be able to at least consolidate that into an understandable UX.

But the hardest part is actually around the money movement and doing the ledgering behind the clearinghouse. So coming up with the right ledger money movement system to make it so that you can manage huge volumes of what is effectively stablecoin clearing across the network is really the challenge, and that's what we've been most focused on over the last few months. And so we're actually moving our own money internally right now, and we're expanding

the scale of what what you can handle. It reminds me in some ways of the modern treasury business in the traditional fintech space. How do you compare and contrast maybe what they're doing to what this is? Yeah. Those guys have been fantastic, by way. You work with them. We work with them. What does that look like? Dmitry and Dan and Nick,

Matt have all been fantastic partners. They are super focused, and they've got a great perspective on how modern money movement should be programmable. We slot into that really well by making sure that modern treasury can clear stablecoins variably. The same way that they don't build ACH, they help you program on top of ACH. We help them clear stablecoins

so they can offer a really wide spread of services to the businesses they support. If I'm a builder Yeah. And I'm thinking about what is now possible, I feel like we live in this really interesting moment where there are so many pieces available to go build with Yeah. More than ever before with some of these primitives. You know, Nate's neobank or like, what are these use cases where, let's just imagine that I just raised a seed round from a 16 z, or I'm thinking about going to build something.

Like, what, in your view, based on the tools that you see available, what do you think needs to go get built with these primitives that doesn't exist yet? But you can see like, hey, I know these tools are here. This needs to go get built now. We're not gonna go build it, but we'll help. You're asking what do I think the app scenarios and future businesses are that are gonna be built that have a What is ability now possible with this stuff that maybe has never been possible before? Yeah. It's an excellent question.

And I'm not gonna punt on it at all, but I am going to reframe it slightly. Please. Yeah. There's a lot of things that you could have built before on legacy rails,

but it would have been breathtakingly expensive. It would have required a huge team, so much upfront work to get regulatory sign off. You would have had to have used a ton of working capital to gloss over slow money movement. One scenario that comes to mind is instant payout for gig workers. You drive for Uber. You take someone on a ride, and now you wanna get out of the car and buy coffee with the proceeds from that drive. That's a really hard product to build. It's a really hard product to build.

The the consumer swipes their card. The company that they they paid, in this case, Uber, isn't actually getting that money for a few days usually. And even then, actually getting the money into the drive bank account takes a long time. So they've gotta come up with how they're gonna do the prefunding, how they're gonna identify fraud rates, and how they're gonna monetize this sufficiently to make up for the cost and complexity of this, feature.

Again, not to mention the fact that all of this requires engineering and legal and regulatory. You could build that product basically in a weekend now. Like, that that's how fast you could do that today. And you could do that because stablecoins are programmable. They're nearly instant. You know, they're nearly free. And so you don't need to think through all that complexity.

One of the things I'm most excited about is that there's all of these opportunities that were literally possible, but you couldn't conceivably build a business around because it costs too much. This is similar in my mind to what happens when AWS makes it easy to start hosting large Internet scale businesses, where you no longer need to go get power and racks in a building in order to Massive unlock. It's a massive unlock.

Many of the things that are gonna get built are great businesses targeting verticals, doing things that were conceivably possible but too complex before. There are other exciting businesses that were just forwardly impossible. Agentic payments maybe could have happened, but I wrote this essay called Tourists and the Bazaar. It analyzes the question of will agents be treated like tourists where you need to exchange cash for services? There's no trust based relationship that allows you use credit.

Or will they be treated like locals, where actually you can run up at a tab with a vendor that you meet with regularly? You couldn't do atomic payments until stablecoins on the Internet. And so you can now have an ephemeral tourist like agent transacting safely because when you send the money, you can receive service, and there's no charge back. And you can do this over the Internet naturally now. Agenda payment's a big opportunity. Streaming payments, you know, we could be paying our electrical bill as we go.

We don't need to pay thirty days later and have sort of a complex credit relationship in order to finance this. And there's many, many more opportunities, but these are some of the the categories that I think are are so interesting. Yeah. What what do you feel like gets collapsed a little bit as well? Like, not in like a just things that people need to be mindful of, like certain parts of the stack. Like, I like the Racks example.

It's like, once that's possible, like, once AWS did that, like, I'm imagining a lot of businesses or, like, certain verticals that were really profitable or were really interesting

may not have been as innovative or or needed anymore. Are there certain parts of the stack that you kind of think are maybe at risk given some of these changes and just, thinking about what what now that is this is possible, maybe we don't need x y z Yeah. Software or thing Well,

first of all, there's definitely more server racks, more and better server racks built now than there was in 2008. So it's just a growth. Growing like that, it's very positive sum. Everyone actually has room to win if we make payments better, cheaper, easier. So what gets consolidated? Who are the losers? I think it's really path dependent. I think that it depends on who leans into the innovation cycle and just says, no. We actually have to support real time payments. Like, this is a feature that people want.

It makes all sorts of activities easier. It makes treasury operations much easier. I was talking to a, like, a Fortune 500 CFO. They were telling me about how complicated their treasury management is. They close their books every day, but if you ask them, at this minute, where's all the money? That's a very hard question for them to answer. And they've got this big team working on that problem. You know, a big team in the Is Pepro in this network too? Did you did I see that Pepro? I don't think I know that. Okay.

Okay. Yeah. I was like, I thought that Pepro does their PSP, I think, that does a ton of global treasury management. Yeah. And I was like, imagining that on the Better Money launch. Forget I said it. No, no, no worries. I mean, but they maintain these big teams in order to manage treasury operations. Promise these people have better things to do than count where every dollar is. We can automate that step. And so everywhere from the most big enterprise oriented treasury management

to check out at a coffee shop can be improved, and the winners are just gonna be people who make great experiences faster and lean in to do that. Yeah. Marketplaces is sort of the name that I put on the the Uber use case that you said, like, the the companies that are in the business of hosting commerce for, like, two parties. Do you think marketplaces are a really great focus for people to go build? Like, I'm thinking, you know, like, CoinFlows of the world. Yeah. Logged in. Yeah.

Stuff like that is really interesting. It's extremely interesting. We live

we both live in The US. We have credit cards. It's easy for us to get a thirty day loan to do stuff. Until you're operating a cash accounting business where you are tracking dollars in so that you can send dollars out, it's hard to wrap your head around or it can be hard to wrap your head around just how valuable it is to get a dollar a day faster. And if you are on one of these marketplaces, let's say you, I don't know, you build tables like this one.

If I say I can get you the money for the table that you're selling on Etsy three days faster, you're saying to your team, we can go buy wood to buy the next table three days earlier. And we can compress our sales cycle so we can offer a cheaper product to more people and still make more money. That's a good thing for small businesses. Where is that money sitting right now? I pay for I buy this sort of beautiful table here, industrial style thing. I swipe my card. It goes to the marketplace.

That maybe takes two or three days, then it gets paid out to the the vendor who the person you know, the craftsman who made this. And that whole flow might be fifteen days later. I've heard that in some scenarios, it can be thirty or forty five days later depending on volume to have the full amount be unlocked. Although typical would be more like, you know, five to ten day that could just be an immediate process where they're getting that money ten days earlier. Yeah.

And is that that's the word atomic that you that you used before. Is that how you define it? Like, atomic payments or, like, what unlocks? How how do you define that? There's actually two there's two things here. So an atomic payment is where clearing and settlement happen at the same time. So you when you swipe your card, you've cleared the payment, and then the actual money settles later on. And often, there's a large gap there, but sometimes a clearing settlement happens simultaneously.

There's actually a third thing, which is an atomic payment. Atomic payment is when I hand you a greenback dollar. The whole payment just happened there. It happened in one go. So that's an atomic payment. You could conceivably imagine an atomic payment that took a while, but it doesn't really make sense. The key thing that I believe these vendors want marketplace participants and many people is faster payments, however it happens. I love stablecoins. I'm fascinated by them.

I've been in this world for four years building, investing, working on I try not to kid myself with what's important about this. Stablecoins are better money because they're cheaper, faster, global, programmable. But the key thing we've gotta make sure we keep our eyes on is offering the best possible payments experience to the businesses that are building the the people who are paying

the entrepreneurs who are trying new things. Just for how like, what they are that you by themselves, like, you need to position them correctly in the right ways. We we're entering that layer now where businesses like this seem to be so crucial in bringing to life what the principles of Sablecoins are. Yeah.

Yeah. I I think it it always depends on where you're on are in the stack. You know, a computer is an amazing tool, but often what people want is to get more done, build a better business. Like, if they do that on an iPad with a piece of paper or computer, the question's just how much value are you giving to the the person who needs to do this thing? And so stablecoins as a piece of infrastructure, as a new payment rail, represent a very flexible flexible, very capable way to send, spend, save.

And I think people are gonna build delightful experiences on top of it. But as you put the framing of a consumer in your mind or the framing of a business, the right question is always, what can I do to make this customer's life better?

And so for us, many of our customers are enterprises, payments companies, fintechs, banks who know that they have a payments problem, or they know they have a new scenario that they want to address that they can't today, or they have a custom stablecoin where they need to address the expense of liquidity operations for,

and we can help them with all that, and we can help them make a better product for their customers. What does what does pain sound like when you're you're having a conversation with someone, you're meeting someone at an event, you're having a, like, sales call with someone? What does pain sound like where it's like, my lightbulbs are going off? It's like, we can solve this. This is very common.

Like, what are some of these examples of common pains that these payments companies will have that you guys can come in and really, like, whack a mole down. Yeah. Yeah. See, it's very You're on a call. It's more of it's more visual. You're you're describing so so walk me through your flow of funds for

how you're managing instant payouts to merchants on your platform. And the guy, oh, boy. You you you get this is how hard this stuff is and how many counterparties they you know, these marketplaces have to deal with. And how many of the people on their marketplace want a faster payout experience. A lot of payments involve this is crazy, but involve a person at a payment processor bank, like, writing stuff on a piece of paper to approve a transaction and moving moving funds forward.

Remittances are notorious for this, the the correspondent banking system, where you don't even know how long it's gonna take when you set up a payment. And you also often, although I think this might be getting fixed now, you don't know what it's gonna cost. You don't know what your exchange rate is gonna be before you start the the payment. Crazy. So when you're talking to people who are in this world, they'll come in with specific requests and features that they want.

But the most interesting discussions for us to figure out what we can do to help people is just ask them to explain the complexity that they're dealing with, and then ask them about a couple of aspirational features and what is holding them back from building them today. And often, the answers to those questions point to things that could be simpler, cheaper, faster,

or totally net new that we can support our customers with. That's good. How do you guys how does the Better Money company

make money? What what's the economic model for this? So we do charge a fee on transactions, but what we don't do is have any slippage affect those transactions. And slippage is a real killer for businesses that want to scale in the payments world. For instance, the Wells Fargo to Bank of America analogy from before, you don't sell Wells Fargo dollars to buy Bank of America dollars.

Imagine if you were trying to move a large amount of Wells Fargo dollars into Bank of America dollars, and it turns out the more you sent, the more you lost to slippage. It would be incredibly challenging to build a productive product around that. And so we we charge a a small transaction fee on as our way of monetizing, which is commensurate with the the benefit that we we

help our clients with. And that's happening in in some ways, it sounds like, outside of the transaction flow, and you can do that directly with, like, the member or the person. We can support it both ways. The the billing model is flexible, but, that's correct. But, like, you can either you can tack it on as a prepay, or we can do, you a net 30 payment. I want to touch on this as we kind of close here. You mentioned the tourist versus

The local and the bazaar. The tourist and the bazaar. Yeah. I think for for us, we're increasingly

interested in the role that agents have in the world of commerce. Yeah. We're we're let's dive into that essay a little bit, and and just the the general belief that you have around the sheer impact that agents will have in this even this this business. Like, when you think about the difference of a human being, a human driver driving an Uber versus like an agent performing a task in a marketplace setting. Yeah.

We are now just starting to think of think through all of the different use cases where the counterparties in these flows of funds are not necessarily only gonna be humans.

What how are you thinking about that right now in the context of this? Yeah. I have a ton to say about this. I'll start with a hot take. I think consumer regular people doing agented payments is gonna be a much smaller market than enterprise agented payments. And that's because when you or I pay for stuff, we do it out of a fixed budget. You know like, you buy stuff during the day. You don't have a or at least I don't have a ton of extra money sitting around that I could be buying other things with.

I might wanna automate some of the payments, but it's coming out of the same budget. In the enterprise scenario, you could have an agent that is buying stuff in order to increase revenue. And so you actually have this growing pot of things that you can do because you're going after net new scenarios. And as you handle those scenarios and grow revenues, you can then spend more on the agented payments.

So a simple scenario would be a business development agent that autonomously buys a gift for a lead in order to close more deals. You both have increased revenue, and you have agentic payments involved in that. And so you could really imagine that scenario growing. Back to stablecoins. I like that example, by the way. That's a that's a good one. Yeah.

So this is the kind of thing where I think there's actually way more room to grow in the enterprise because revenue is part of the story, And you need to grow revenues in order to grow spend in agentic payments. Have a lot of areas that we could grow revenues for the Better Money Company. But outside of that, in my personal life, I probably am not gonna be growing my, like, outside of the Better Money Company revenues. You a are commercial center. I'm not a commercial center. Exactly. Exactly.

So back to stablecoins. If I'm an entrepreneur building in the agentic space, who I have not, I've likely not yet established a credit history where I can give the agent a credit card. Potentially, I could give the agent my credit card, like, as if it's like me giving a kid, like, my my child. I don't have a child. But but I I give my child a credit card. And, potentially, we come with new standards. Today, cards typically are processed as either a card present or card not present.

You could imagine a human not present fraud standard, which is like a slightly high fraud threshold. You charge three and a half percent instead of 3% for card not present and two and a half percent for card present. Yeah. That's an interesting option. But it turns out you don't really wanna deal with all this. Like, just connect your agent and their wallet and a policy to to the Better Money Company Clearinghouse and do Ascend that way. And the payment is guaranteed to occur.

There's no credit relationship between the agent and the vendor, and the whole operation gets a lot simpler. And I think that's why we're seeing x four zero two take off. Not necessarily because it's literally the cheapest. There's still so much to do to improve on cost in onboarding into stablecoins, big topic, but because it's just the best way to build. This is the innovator's dilemma or the s curves of innovation.

It's a new agents and agentic payments represent a new scenario that's not well served by the last generation of technology, and it represents an opportunity for stablecoins to become even more commonplace. What do you see founders,

young teams, or just like a lot of people thinking about agentic payments right now get wrong.

I there's so much to build that I actually don't know if I could say what the mistakes are. One thing I've noticed is that there's a lot of people selling shovels and relatively fewer digging for gold. And I'm always interested in the folks who just say, screw it. Like, I'm going for gold here. I wanna build the next great consumer or enterprise scenario that is literally

agents paying as opposed Go build the enterprise lead app for the buying leads, gifts. Yeah. Just go go use the tools. Use the tool. Go for the gold. Yeah.

Turns out if you find a big pot of gold, that's more valuable than selling a lot of shovels. You don't find the gold that's less valuable, we'll go sell shovels. Know? So that's not necessarily a mistake, but it's an encouragement to be ambitious with the ideas that you go after in agented payments. Although to do that, you've gotta really think through the scenario and solve a problem and not just get excited about the technology.

And the technology is fantastic and so cool and so exciting, but you have to actually grow revenues for the customers that you're working with. So that's one thing. Another is that maybe perfect is the enemy of good. And for customers who badly need some problem solved, if you solve it, they will buy the product. And you don't need to have an overwrought, incredibly complicated technology stack in order to do this.

So back to this concept of human not present, which I actually took from a friend of mine at RAM, Sky Alex, who's great. That's a really simple solution that would require a ton of complexity, but, like, cards are already in place, and maybe that will be what wins. So simple often wins. Today, stablecoins are winning because they're the simplest way to set up age ended payments. But just look for that that easy win that that you can get people started with. Yep.

As we close here, give us the you know, what's next for the company. You guys just announced the initial raise. You have a growing team. Yeah. What what is the ask to the market from a maybe team standpoint, partner standpoint in the next six months? What's really top of mind for you guys? Yeah. Well, we're hiring aggressively.

If you want to help build the next era of money, please reach out. Like, that that that is a useful and good thing to do. We're meeting with new people to bring out of the team all the time, and that's been exciting. What kind of talent are you really focused on build bringing in? Of course, we need great engineering talent. We're building a really exciting in house platform, and so very modern way of building systems. That has been a major focus for us.

But then also operations, business development, treasury functions. If you're very interested in building next generation of money, please reach out. I wanna I wanna talk to you. We're also still growing the the customers that we it's where we've had a ton of interest around the launch, and that's been great. We are onboarding people now. And so if you do something with Stablecoins, I wanna see how we can support you.

But specifically, if you work with a wide range of Stablecoins and you wanna make your payment experience better and more mature, I think we're a great fit to help you build that product better. And, again, reach out. And I'm I'm Sam Brunner everywhere, Sam Brunner on Twitter, Sam Brunner on LinkedIn. And you can find more on our website, bettermoney.com as well. And where can we get the merch? Is that gonna be dropping soon? Yeah. Yeah. Yeah. Merch store, I think, is gonna be in a couple of years.

Okay. For now, this is So limited partners and team only. Yeah. Limited run. Exactly. Well, Sam, thanks for this. This is really fun. And pumped for what you're building. Excited to follow the journey. And Yeah. Really appreciate your time today. Yeah. Thanks so much for hosting. Was excellent.