Latin America Has Been Ready for Stablecoins for 20 Years

So the name Alfred comes from Batman, meaning the fintechs, the businesses, the merchants of the world. We want them to be Batman, and we're just on the back end just making their life easier and providing infrastructure. The reality is is that when you look at Latin America, it's been product market fit for stablecoins for twenty plus years. You have countries like Venezuela, countries like Argentina that already dollarized. There is a secondary market for access to dollars.

How do you expect somebody to have access to dollars when they don't have access to a bank account? This is not just money movement. This is a business of trust. We heard Western Union CEO speak recently. It's north of $2,000,000,000 that they have in treasury. Now they're gonna be able to put that capital to work because they're doing settlements via stablecoins. The reality is that Latin America is not a one shoe fits all solution, but we've been able to build something that makes it feel that way.

How are you gonna exchange value in Latin America if you don't have a tokenized version of a currency? And the way that we win this, obviously, is distribution, and distribution is built on trust and scale.

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.

Diego, thanks for being on stable minded. Absolutely, man. I've been looking forward to this. Thank you for having us. So we're in your city. We're here in Miami.

Yep. Best city in the world. Best city in the world. We will say it. Best city. And the people who are here are feeling it, and they're denying it at the same time. How, how long have you lived here? Twenty five years. So born in Venezuela, moved here at the age of six,

and been here now for twenty five plus years. Amazing. So I'm really excited for so, you know you know this podcast. Our our community is really focused, especially right now on what's being built at the frontier of money and really sitting down with the people who are a part of that and building businesses that are helping money move forward and thinking about the what's around the corner with things like stablecoins, and really excited to hear about what how you've been thinking about that.

I wanna start though with where you've been so far and what you've built so far. You said you were born in Venezuela, and you moved to The US twenty five years ago. When did when did the idea of starting a company come into your head? What's the journey of being a founder? In all reality, we never

started Alfred wanting to build a company. It was just it turned into, like, a school project that just evolved into a business. School project? Not literally school, but something that we were passionate about that we wanted to solve and quite literally went from a project and evolved in the stages of a project into a real business. Right? And I think being from Venezuela, ton of exposure to inflation, ton of exposure to remittances.

And I think one of the things that for me really inspired me to build Alfred was seeing applications here like Cash App, Venmo, how seamless it was to move money peer to peer for me and my friends. And pretty much all up until now, you know, sending cross border remittances back into Latin America, whether it's family, friends, my nannies, family, and that process really frustrated me. And

and it really led to Bill Balford. So yeah. Something that's been awesome to see or be a part of as we've worked together last year, especially, was seeing the the family in the comp the the way that the company feels like a family. I I think a lot of people were like, this isn't a family. This is a championship team. And we've heard that, like, when I was at Coinbase, that was, like, something that they would say proudly. Like, we're not a family. We're a team. And what is what do you think about that?

Because I I know that Alfred, what seems so special about it culturally is, like, some of the people at the company or family. It really feels like when you even work with Alfred externally, it feels like you're working with a family, which I have personally loved. Like, what is it what do you think about that? Yeah. So, I mean, just

to give deeper context on it, we scaled from, like, eight employees to 40 in a matter of, like, four months. And it was just, like, hyperscale mode. We needed people to put out fires in different areas, and the first people I can count on was my family. So, I mean, kinda to what you're saying, cousins are in the business, mom is in the business, dad is in the business. And truthfully, I mean, we got so lucky because it happened by accident.

And without even knowing, we were actually setting the the foundation of what the culture at our company is today. So pretty much everybody that comes from the outside in comes into that culture of not only do we care about you, but we're gonna get things done, we're gonna be efficient, and we're gonna hold each other accountable. And I always say I I love it because, obviously, we're in tech, and we're Hispanic. My family's Hispanic, and Hispanics are very much like hugs. I love you. Let's grab a drink together.

And, again, seeing engineers come into that space that might seem uncomfortable, you'll see them at, like, our end of the year parties a little bit, you know, tipsy, and they'll be like, I love you. And it's like finally loosening up. You start you start seeing some of that, and and it's amazing. And and again, I think that the biggest thing is when you're building something with someone, you need trust and you need accountability.

And for us, we guarantee you that some of the folks that we have today that are family at our company, you know, they're setting the bar for folks that are coming in. Right? And I think that that's something that, again, it it happened by accident, but we've been really blessed in in the way that it's happened. Yeah. What what are some of the roles that your family plays in the business? Your mom, dad, what are they doing? So my dad is the GM in Mexico. My dad is actually our our number one sales guy in the company.

Let's go. Shout out to dad. Is Old driving, like, 60% of revenue in the company, and and he makes sure he's letting everybody know. And What's his background? What did he do before this? My dad has been a a true salesman his whole life. He used to be in alcohol and in the wine business. He used to be in the tobacco business. Just a a Miami salesman. Okay. And once we started really growing and we wanted to open up an office in Mexico, I wanted somebody to go down there and be with my partner, Ernesto.

And I'm like, dad, I think this is a good time for for you to go down there and and help me really build this office from the ground up. And my parents are in a later stage in their life and super willing to do things. Obviously, no one's at home, and he sent it. And and I tell people now my dad is more Mexican than he is Venezuelan. He loves it down there. And and, anyways, he's leading the initiative down there. My mom is is in the business too. My mom is, actually our head of treasury.

So she's handling all money movement within the platform. Who better to trust with your money than your mother, Ceylon? It's fair point. And then you have some of my cousins who are handling more of, like, the biz ops and day to day operations. And it's funny because I whenever we have to, you know, have hard conversations with partners, I just send the girls, and the girls will get it done. Like, it Anna and team? Anna and team will get it done, and they build a good reputation within the ecosystem.

It's funny because people talk to me like, you know, Anna and Issa are they're killers, yada yada. And some of them know that they're family, some of them don't. And it's just like, yeah, man, you better behave because Oh, man.

That's good. That's really sweet. So it sounds like you've you've found a way to make that really special and work. About a year ago, I guess now, we were we're going back to Mexico City this June next month, probably around the time this comes out. And it was really cool to go to the office and, like, do that with you guys and cohost that that party with WorldCoin and meet your family. Like, it was such a sweet spirit.

Give us as we kinda kick off this conversation, what is Alfred, and what does the business look like now versus maybe how you what you thought it was gonna be when you started? So Alfred focused on b two b stablecoin payments infrastructure across Latin America,

and we just help businesses move money cross border between local currencies and stables. And the reality is that that's not how we started. Going back to the remittance piece, we started wanting to do something similar to Cash App into the region. So a wallet, non custodial wallet that uses USCC to send payments into LATAM. And I would say in our early years, we spent probably a year and a half, two years in licenses, liquidity, compliance, and Retail focused. You wanted you wanted to build an individual Exactly.

Product. And we quickly realized that we were spending so much time on the pipes, the infrastructure, and we had the conviction that there would exist a future where stablecoins would start to overtake over the payments industry and much more talented and well funded and bigger companies would wanna come into the region and leverage this technology as as a medium of exchange and and use these settlement rails. And that's pretty much what we pivoted Alfred to be in 2023.

So the name Alfred comes from Batman, meaning, you know, the fintechs, the businesses, the merchants of the world. We want them to be Batman, and we're just on the back end just making their life easier and providing infrastructure that's just gonna help them scale and and be successful in LATAM.

I didn't know that. Yeah. I didn't know that was I've never asked that question, but I absolutely love that. Yeah. But the a has it's not capitalized. It's lowercase. So that We like we like Was that Pedro's was that Pedro's call? Exactly. Pedro, one all lowercase. We like to yeah. Okay. Team has done a great job. And, I mean,

we for those who don't know, we used Stable Studios to actually do our last rebrand. And check it out, offered pay.io. It's a good site. These guys did an awesome job. It's good site. Thank you a ton. I think that was the last rebrand

site we did Come on. Before we went all in on we've done a lot of things. But that was I think that was the last one we did. It was it's a clean site. Keep it that way. It's a clean site. Yeah, man. So okay. So you go from you make this decision to go from the Cash App retail mindset to b to b. Mhmm. You were when we were grabbing coffee, you were telling me about some of these, like, kind of pivotal landmark moments. Talk a little bit about the customer base and those kind of inflection points for the business.

Mhmm. For us, I mean, again, we we focus on building infrastructure.

And one of the cool things about how we landed our biggest early customer with which was Worldcoin was through taking calls with investors trying to fundraise. And one of the investors who told us no, which was Circle Ventures, who's now an investor, today, shout out to Circle, They're like, hey. I have a portfolio company. I need services in Argentina. Can you guys help them out? And truthfully, I mean, it's super impressive what they've done in the region.

The the growth that they've had across LATAM has been humongous. I believe a ton in their mission and what they're set out to build. And, again, that really goes to what Alfred's core mission is is to help other companies be successful across the region. And we always have had early customers that were wallets, customers like MetaMask, customers like Safepile. Like, those are some of our really early customers. But in terms of traction and actually, like, heavy volume in Yeah.

In transactions, it was it was really Worldcoin. Right? And what were they what were they doing specifically? Like, what is their what what is and was their business at that time, and what did they leverage Alfred to solve? Just getting funds in and out of the wallet. Right? So, obviously, Worldcoin is a non custodial wallet, that supports stablecoins, WLD. And for us, we're helping their users either go from local currency into stables into the app or, stables or WLD into local fiat into their bank accounts.

And for us, again, like, I think with WorldCoin in total, we probably ran, like, a total of two to 3,000,000 total transactions on our platform. Unique transactions. Unique transactions.

Yeah. What is the typical on and off ramp size wise for for them? Like It depends. Unfortunately, they're also pretty tied to the market with some customers in terms of WLD and where the price is trading. That's an interesting problem because, you know, you have I'm thinking about going from fiat to stable coin versus WLD to fiat. Was that one of the unique things that you provided was, like, both sides of that? Were you guys mom was also managing the WLD to off?

Was that kind of an a unique part of that that partnership? I mean, part of our stock, we're connected to

both LPs, exchanges. We're sourcing liquidity from all sorts of places, and that was a core solution that we gave them. Right? But I think, like, one of the going back to, like, our journey, it's, like, one of the cool things about that, and I think that every company needs that, right, was, like, an anchor customer. And pretty much what the story that I gave our team is you take a look at a customer like a company like D Local, and D Local's biggest customer was Uber. That's how they really went zero to one.

And now D Local is a publicly traded company that covers infrastructure globally, and, obviously, they do tremendously well. And that was really the narrative in in that point in time for our team was, hey, guys. We have this customer that's giving us, you know, this scale and and this opportunity to really showcase our product in the wild. Now we gotta go out and and grow beyond that. Right? Yeah.

And I think that that's one of the things that I'm most proud of, is seeing how we've taken advantage of the moment to really expand our business way beyond that. And I would say that today, I mean, most of the flows that we do are are b two b based. Anything from banks needing, stablecoin infrastructure to import exporters to fintechs. And And and, again, I mean, I think that there's two things that play in our favor really well.

One is stablecoins are booming, and and we took the right bet five years ago, which I take zero credit for.

What was that bet?

That stablecoins were gonna rule payments. Yeah. And and that this was the future of money movement. And then two, that Latin America is is just a region that is is growing so so so much, and there would be companies that want to go into the region to really extract value from it. Yeah. So

last couple years, you guys, even just a couple months ago now, you have was it series a? Yeah. What what was what's the kind of core funding journey so far?

Yeah. What was the series a and We had had to turn the company profitable before raising a penny from investors. I'm a first time founder, and it was really hard. It was really, really hard to raise money in our early days. I was telling you earlier on our walk that one of the reasons why our company is alive today is because of Stellar. They gave us our first bit of grant and funding, and we kinda went through that whole blockchain grant process.

And all sincerity, though, we have been very faithful to them, and we have committed to build on their stack. But they really helped us in in that in that process to get us to build a product that was product market fit. Right? And You said without them, you wouldn't be here. Yeah. I mean, honestly, like, it Shout out to them. Yeah. Complete shout out to them, and we make sure to let them know how grateful we are for them. But the reality is that every business needs that. Right?

You need somebody to believe in you in your early days to really get you going. And and that was you know, we went through the grant process. It was about 400 k in total grants throughout a few years. And then we raised yeah. We we ended up raising our series a in October of last year backed by f prime, Brevin Howard, and White Star Capital. Mhmm. And we're just so blessed, man. We have some of the best investors in the world. People are really for us, supporting us, and yet really lean into the process. Right?

And something that I always tell them, I told them, like, listen. We would have taken money from anyone. Yeah. And we got so lucky that it was actually those investors. Right? So yeah. What has it been like seeing through the process of building the business, seeing

stablecoins erupt in prominence, especially in the region. Mhmm. For people who aren't living in this part of the world, help explain what you have seen and why these things are so popular and why stablecoins in the last couple years are really, really finding a sense of product market fit in this part of the world. Yeah. The the reality is is that when you look at Latin America,

it's been product market fit for stablecoins for twenty plus years. Right? Why? Because it's you have countries like Venezuela, countries like Argentina that are already dollarized. That's the number one mindset that you need to change in a consumer and in a business. It's I need access to dollars. And, again, an example of Venezuela and and Argentina, countries that are, you know, deal with tons of hyperinflation, there is a secondary market for access to dollars.

And I think what stablecoins have done, right, bring stablecoins in, they've made us more accessible to everybody. And I think that that's one of the reasons why we're so passionate about building this. Right? It's you know, everybody deserves access to safe haven and savings. Right? And that's really the way that we view Stablecoins and and why we're so focused not only on building certain payment methods, but all payment methods that really cater to everybody in the country. Right?

Not just your business, but also consumers, from business owners to folks that are running mom and pop shops to grandmas that are picking up remittances because because yeah. What do you think about the

I think lately, we've we're starting to see these really big partnerships come to life with, like, some of the, like, traditional incumbents who are now starting to adopt things like Stablecoins, thinking about, like, Western Union's announcement earlier this week and all that stuff that they've been doing.

What do you think about like, how how do you think that's gonna shake out in terms of kind of new new kids on the block, the neobanks and the apps, like, who are coming in and maybe doing, like, what a Lemon Cash was doing or things like this within certain markets versus the incumbents who are updating the rails with things like stablecoins. How does Alfred think about going to market with those different use cases?

Are you spending more time thinking about, like, you know, empowering the incumbent use cases or more so empowering the next Ubers and, like, the the rising stars or or both? How do you think about that? We're building infrastructure for everyone.

So we're working with both the incumbents. We signed with Western Union to finish last year, so we're part of the digital asset network for them across LatAm. Huge.

And what does that look like practically?

Yeah. So digital asset network is is basically giving access to folks to cash, Basically, stablecoins into cash or cash into stablecoins. Right? So to what I mentioned about building for everyone, you need to understand that there's a massive cash economy in Latin America. Right? And how do you expect somebody to have access to dollars when they don't have access to a bank account? And now with Western Union and both MoneyGram, they're both doing this.

You have given the ability for someone who's unbanked to fight hyperinflation via different wallets and apps that they can access Yep. Through this network that Western Union and MoneyGram has spent many, many years building that are networks of tremendous high trust in this region. And I'll give you an example, and this is this is the most Hispanic thing ever. So my when I say my nanny, it's the lady who raised me. So we brought her from Venezuela. She's actually raising my kids now here in Miami.

She's still with me. That's awesome. This woman, though, she sends money What's her name? No. We call her Nana. Nana? This Yeah. This woman sends money every single week to Columbia.

K. And

for her, she needs to go to a mom and pop shop here in Miami to send money. And I'm like, Nana, you know that that's what I do for a living. That's how we pay you. Like, what do you need? And I'll send money. She's like, no. He picks up via Necchi, yada yada. I'm like, we I I can open my laptop and send your son a payment via Necchi in one second at the best effects rate you're gonna get in the market. And she's like, no. I need to do it with Giovanni because Giovanni gives me the best.

And, yeah, and long story short, it's like this this is not just money movement. This is a business of trust. And this remittance network of the these this network of people that send remittances have build trust with the agencies that they send with and the agencies that they collect. Right? So on the other side of it, there's another component of trust. It's like, hey.

When I need to go pick up my money, don't don't you dare send it to me on this application because I need to go see x, y, and z person at the shop that I buy my coffee and my sugar from to get my money. What do do you think the trust comes in? Like, what what

because when I think about trust being required, that typically comes with, like, a sense of risk or a sense of downside, like, downside potential. Mhmm. What does that look like? The relationship there, to your point, seems like it's really emphasized. Is it, like, these people have really come to trust that

they're gonna have the money, they're gonna deliver it, like, what what how do you It's it's it's a relationship that they build with the other person on the other side. It's a human relationship. Mhmm. And they don't wanna lose that. Yeah. It's like I trust Giovanni or I trust, you know, Pedro that he's gonna have my money because I've been sending money via these channels my whole life. Fortunately, those things are changing. Right?

But if we want adoption today, we need to cater to everybody who's in this ecosystem. Right? Yep. And that is core people who are in this ecosystem, and I think that that's what the incumbents like MoneyGram and Western Union are really aiming to do via, you know, digital asset network and MoneyGram access is making sure that everybody's included in this process. And I think that that's super, super important.

Although I have to say I'm also tremendously excited to see companies like Felix having tremendous growth by, you know, doing digital remittances. And, obviously, they still support cash method in countries, but I do think that our generation is gonna slowly start changing this and and, you know, payments will become more digitalized. Yeah.

So rounding out the Nana use case, what is happening for her right now if she's doing it the traditional way? And maybe we can, you know, break down some of the the downsides of that from a time or cost or efficiency standpoint versus now what is possible with partnerships like you guys have with with Western Union? And where do you guys fit into that? So the the reality is that Nena nor

Nena's son suffer any of the pain. I mean, they suffer the pain of the fees, but again, La Nena rather pay fees for trust than, you know, have that trust be removed. Right? And, again, I've been living with this woman for thirty years, and she still wants to do it with Homeboy. Yeah. She's not changing. She's not changing.

But where this technology changes things is the only reason why her son is able to collect that remittance in real time is because Western Union has agreements with all these agents globally where they're able to have money pools globally. And I think we heard Western Union CEO speak recently that it's a tremendous amount of money. I think it's north of $2,000,000,000 that they have in treasury.

And all that money now, they're gonna be able to put that capital to work because they're doing settlements via stablecoins versus actually having prefunded pools of liquidity globally. Right? And and I think that that's just simply gonna empower these companies to be better and provide better solutions. Right?

So we're working with them to see how we can help them, you know, improve their liquidity on on that side, and we're gonna start seeing that across the board with, I think, every single money transfer operator. That's exactly how Felix operates their business today. They settle payment into USCC, into these local currencies. And I think that that's super, super powerful. I'd love your your insights on, like, the relationship between physical cash versus

what it looks like some of these players are starting to do with digital wallets. And when I think about, like, maybe what they might be doing historically with cash sitting in these accounts that then has to be liquidated into, like, physical form, and then they kind of lose the economics of that or they lose the relationship to the the end customer versus what it seems like is now starting to happen more and more is like, maybe these things are stablecoins.

Maybe the transfer of value is happening with the digital wallet. And that Western Union dollar issued by Anchorage is like actually now something that exists, and it's still issued, and it's not burnt. And, like, that is really good for everyone, especially the one who's tied to that stablecoin. Do you see you know? Because it sounds like Nana's of the world are kind of set in their ways. Like, do you do you see that type of flow becoming more popular over time, or what do you think about that? For sure.

Unfortunately,

I don't think Nana will ever change her ways. Yeah. Unfortunately, Nana is also 75, so she's she's gonna go see the Lord one day. But the reality is that our our generation is changing that. Right? Yeah. And you're seeing tremendous adoption. I mean, shout out to Rain. They're doing a great job with StableVac cards. You're seeing tremendous adoption from companies like CAS, companies like Bigget Wallet, companies like Redot Pay.

Because of this, it makes it so easy to transfer value from Stablecoin wallet to another wallet real time, and it's spendable directly on a card, or you can withdraw that money into into your bank account. Right? And I think that that's more of what we're gonna see in the future. But, again, unfortunately, I think the folks who have been, you know, raised by the legacy system are gonna remain operating in the legacy system, but we are seeing those numbers change. Right? And I think that Brazil is a great example.

You take a look at Brazil. It was a heavy cash based economy, and then you introduced PIKs about five, six years ago. And I think it's, like, 90% plus banked country now. Right? And I think that that's what we're gonna start seeing across the board, not just because of stablecoins, but also because of improvement on the domestic rails aspect of things. Right? And that gets us really, really excited because that caters directly into exactly what we're building at Alfred. Yeah.

How do you so, yeah, exactly what you're building at Alfred, you're thinking about

and the example you used prior is, like, we're gonna help functionally and build economics into the process of asset conversion transfer movement. That's your business. Is that like, bring us into the example now here with where Alfred sits in when someone's going and they might be getting a stablecoin or converting from a stablecoin. How do you guys and especially as this stuff remains on chain more Mhmm.

And maybe these spreads or as we go toward that reality, how are you guys thinking about building economics and building where you wanna play as things become more stablecoin native and sit there? It makes very clear sense to me how a business like Rain sells into this because, you know, someone's gotta issue that card and do that thing, and Western Union is, like, not be in that business directly. And so that is a very clear value add.

Help me understand where you see Alfred winning in this, like, recipe, I guess. So for us, again, like, we're Alfred is a regulated PSP across all the top four markets in in Latin America, so Mexico, Brazil, Argentina, Colombia. And for us, the biggest goal is to build a deep payment stack. Right? And what does that mean? If you take a look at our evolution, we started just like your Moonbase doing on and off ramps. Right? So helping folks get in and out of digital asset.

But we realized that for us to grow our value proposition and improve, you know, economics and, you know, make folks actually understand that there's stickiness behind our product, we needed to go deeper into the payment stack. So what does that look like today? One of our most popular offerings is our virtual accounts. Right? So we offer virtual accounts to both resident and nonresident individuals across the top four countries. And, again, like, for us, it's how do we get closer to what a bank actually offers.

Right? And what does a bank offer you? Account for deposits, accounts for payouts, and balances. Right? And now that third part of the evolution for us is is balances. And we deployed a ARS on chain, and and we're gonna be deploying local stables across LATAM so we can give our customers who are interacting with stablecoins the ways to collect funds via virtual accounts, hold those balances, trigger effects whenever they they need into both LATAM currencies, dollars, or other foreign currencies.

And and that's pretty much what our product offering looks like today. And I would say that you have Is that the ARS is the first

that's the first of potentially many that you guys are starting with? Yeah. Exactly. When did you start when when was that announced or started?

Right now. Right now? So actually Let's go. Let's go. Heard it here first. Was like, I didn't hear about that. Yeah. So actually, when we started on Stellar, built an ARS. This was in 2021. It was called ARSX. Pedro wasn't here with us yet, so the name was ugly. So Yeah. Forgive us.

What is it called now? Just ARS? ARSA.

ARSA. But, basically, like, for us, the biggest thing was, again, like, giving our customers the balance, potential yield on the assets that they're holding with us was super, super important. And I'll I'll pin it to you in a very practical way. For the wallets, it's it's as simple as a wallet like a CASK can issue their customers VAs across LatAm, and those customers can hold local currency balances and do effects directly on the application from that local currency into USCC.

And this is very optimal for getting paid on local currency, transferring money in local currency, and so on. And then for foreign businesses, what we're seeing is foreign businesses love nonresident accounts. Why? Because you have a business that operates across all Latin America, and they need a scale, but they don't wanna have a local subsidiary in every single market. So what they do is that they reach out to an Alfred and say, hey, Alfred. Can you open up a bank account for me in Colombia?

Can you open one for me in Mexico? Can you open one for me in Argentina? And I wanna collect local currency from my merchants who are buying goods and services from me. So those individuals will start collecting funds. Since Alford is not a bank, we tokenize those that local currency into a local stablecoin. They're collecting those funds into that account, and then once or twice a day, they'll hit our FX API and convert that into dollars. Right? And and we'll settle directly with them.

So, again, that's really, like, where we're we're providing value today. And and, again, like, the biggest thing is how do we help both companies that are operating locally and from outside coming in, bring the most value and extract the most value out of the region. Yeah. Speak a little bit about this is really interesting. The

specific dynamics and the pain points that you're calling out, I think, are I just wanna tease this more as, like, the difficulty of operating a business globally Mhmm. And being able to service things like stablecoins and crypto and stuff foundationally work globally, but that doesn't mean that businesses can use them effectively, easily globally. Mhmm. It's like there's a difference between what's possible versus what's compliant.

Or speak a little bit to the difficulty or even I've heard even, like, damages that certain countries will put on businesses for like holding capital in certain parts of the world for certain periods of time or like taking fees on things like this. Mhmm. For those, especially Americans, I think most of our audience right now is American who aren't familiar with these rules. Bring us into that a little bit. Like, what do you I mean, it's it's

Capital control, I guess, is the term for this. The simplest way to put it is that an importexporter's job is not to be a payment company. It's not to juggle payment providers and banks. It's to trade goods and services. Right? And when you take a look at these companies that actually have real customers and real value that they're moving in and out of these countries, they're spending more time actually dealing with payment issues than they are operating their business. Mhmm.

And that brings tremendous amount of friction. And then on the other side, it's or they juggle five, six different banks and payment providers, or they connect to a company like Alfred that can actually help open up these local accounts for them and remove a lot of that that that friction from the process. And that's really where we've seen the most amount of value. I think it happened by accident, but we're a regional company. Again, we hold licenses in the top four countries across the region.

And what we see a lot is these companies want a one shoe fits all solution Latin America, and the reality is that Latin America is not a one shoe fits all solution. But we've been able to build something that makes it feel that way. So my cofounder is from Argentina. Again, I'm from Venezuela. Our third cofounder's Mexican. We have again, like, we have boots on the ground in Colombia, boots on the ground in Argentina, boots on the ground in Brazil, boots on the ground in Mexico.

And that is the only way to build a deep product in the region that makes it seamless for these foreign businesses to operate efficiently across the region. Right? It's having having people there. Exactly. Because, again, like, every single country operates differently. There's capital controls in every single country. There's regulation looks different. Nothing looks the same.

And that's why it is very difficult for these foreign businesses to scale properly without proper infrastructure because of what you're mentioning. Right? It's like, you know, maybe they have bottlenecks in x, y, and z country because they just, you know, think that it's EU and they can just plug in and operate.

Yeah. I've heard certain companies that we've talked to or other providers who shared things with us where certain countries will say, like, you can't withdraw value. You have, like, a cap on how fast you can take payments out of the country. You're, like, really limiting businesses in terms of what they can and can't do with capital flight Mhmm. Which is just in my personal view, like, I can see why, especially in more emerging markets, would want to control that, but it seems so unideal and so not fair.

Something I just foundationally disagree with. Speak a little bit to the process of getting, like, something like ARSA up and running. It seems like a, one, a really interesting look into the future of the business and also something that like when paired with other markets that you guys are in, could really become a bundled Yeah. Powerful thing. What did you guys have to go do to get that off the ground, practically speaking?

Again, we started before our time, again, we we started building this in in 2021, had pretty much no demand for it. How did you build it? What does that even mean? My cofounder built it. He's he's a smart one. I just do the talking. But but yeah. Again, like, we wanted a tokenized version of of the local currency. Okay. And one thing that I'm very clear on is, like, Alfred does not wanna be a stablecoin issuer. Right?

We just need to provide our customers the best product possible, and them having local balances is extremely important. Right? So about a year and a half, coming up on two years, regulation in Argentina came about, which regulates digital asset companies. We went out and we got our license. So we're a regulated PSAV in Argentina and also a regulated PSP.

What does a PSAB mean?

So vast virtual asset service provider. And and through that, we were able to proceed with the start of of this project. And that's pretty much I mean, it's it's it's a regulatory thing. Right? From there on, everything is just shipping technology and tokenizing balances that we already have because we're we're a PSP. So what's the difference in your mind between tokenizing balances in this way versus issuing stablecoins?

How do you differentiate those two things? Because they seem very similar. Yeah. But At the end of the day, they're they're the same.

But, again, like That's not your you don't think about the business that way. Yeah. The focus of our business is not to, you know, go and do Circle's business model. Right? The focus of our business is we're a payments company. And, again, how can we get deeper into the banking stack as possible? And and this is really what created the path for us. And then I I genuinely believe that, you know, you're seeing initiatives like Tempo, Arc.

Eventually, FX is gonna come on chain and at scale, especially with AI and AI agents coming about. Yeah. And I definitely believe that, you know, these local stablecoins are gonna be a tremendous part of making this possible. Right? Because if we really believe that, you know, agents are gonna be executing payments in the future, which I I surely believe that, how are you gonna exchange value in Latin America if you don't have a tokenized version of a local currency. Right? Yep.

And I've heard it said it's like what fiat is to humans is what digital assets are for for AI. And those are things that kept me excited, and our job at Offered is to put ourselves in front of those opportunities. When you guys were thinking about this or as you are still thinking about this in other markets,

what is the benefit or downside of I I saw Dave Taylor walking the hall yesterday and I love that guy. We've met with him. I love that guy. What's so help me think through, like, I see a company like EtherFuse doing, like, local stablecoins and stable bonds as they call them. Why not go integrate something like that versus do something yourself? So I I wanna be clear. We're we're actually

amusing a partnership with EtherFuse as well because, again, like, we don't wanna be a stable point issuer. This is just an important part of our product offering and something that we need to support on our stack. Cool. And, obviously, we wanna share some of the yield and, you know, what the business model lends itself to be. So we are looking at opportunities with Etherfuse. I think we're gonna do something with them. Cool. Markets like Mexico, and I think they're said this product is unbelievable.

Dave is a great, great leader and founder as well. So, again, back to that point, like, we need to support this on the product side. And, yeah, wherever it makes sense for us to build it ourselves, we will. Wherever it makes sense for us to partner with others, we we will as well. Cool. Do you see that category

as like, as you're evaluating now, like, I'm you're the buyer in this situation. As you're evaluating build versus buy, like, are there are there an abundance of options for doing something like this well, or is EtherFuse,

at least right now, one of the few that are kind of up to par? I know Mento Labs may be doing stuff like this. Like, who else is on your radar as you're evaluating this? I think you're gonna see a lot of PSP folks go for building these out, and I think that you've seen companies like Bitso do it with their Juno project. Yep. You've seen companies like Transferral do it in Brazil. Avenia do it in Brazil as well. Trace Finance is doing some cool stuff. Trace Finance.

I I didn't know they were doing a stablecoin, but it doesn't surprise me. And I know of a few others that I don't wanna I don't wanna mention because I don't know if it's public yet. Sure. But I do think that EtherFuse is is building something that is agnostic to cater to the region. Right? So I think that indifference of us partnering with somebody like Juno, and I just for full disclosure, I I respect and admire deeply the team at Bitso.

We would prefer to do something with a player that's more agnostic, like Aether Fuse. Yeah. Yeah. That totally makes sense.

When you think about the future, we got, you know, these four markets that are strategically important. You guys are it's exciting. You're you're talking and engaging these these types of companies to bring these types of products to market. What are you getting most excited about on the product side or on the business side with what you think needs to be built next? So you you've built oh, man. It's, like, four or five years now. You guys have been building products, like Mhmm.

Waking up every day and building things. Like, what do you think is the most strategically important thing for the company to ship in the next six to twelve months? Right now, our business has changed drastically

in the sense that I would say most of our flow over the course of the last three years have really been focused on domestic payments. And if you take a look at our business over the last eight plus months, it's completely shifted to being a cross border payments company. So I would say, like, north of 60% of our flow is is cross border payments. We're doing payments from Mexico to China, Brazil, China, Argentina, US.

And that's really where I wanna see our business going more and more because, again, like, that's really how we were born. Right? We were born with the concept of wanting to fix cross border payments, and now we get to do it on the institutional side of things. And for us, it's very important to build not only good rails outside of Latin America, which today, we fully leverage partners and ideas leveraging partners outside of Latin America for the next, you know Partners for what specifically?

So settlement partners. Who are good at that at those regions. Exactly. Like, we believe in something essential in Latin America. There's a saying in Spanish called, which means, like, basically, like, whatever you're good at, we're gonna focus at that. Right? So an an example that I would give investors when when we were raising our series a, we're Hispanic at our core. Like, we're Latinos, like, and we know our market really well.

And I think that's what makes Alfred a good company, and that's what makes our product a good product. I would tell investors, I'm like they were like, oh, talk to me about this company and this company. I'm like, have you seen that man Dan Salsa before? Like, put some salsa music, and I'll show you who's from Latin America and who's who's not.

It'll yeah. You'll know pretty quick. Exactly. And to that point,

how can you expect me to be successful in Asia when there's a team that's been building Asia rails for, you know, four or five plus years. I'm not interested in building those rails because that's not where I'm from. That's not what we know to our core. So when we're building rails outside of LATAM, we really focus on teams and partners that have been doing that for a long time who build a really solid product. Right? So that's what those partners look like for us.

I mean What would you say to someone who thinks that they can come into these parts of the world and just

build and take over?

Let's dance also. Let's see.

No. I would say because a lot of think that a lot of people think they can just come into new markets and grow fast and

it's everything's kind of a copy and paste. Yep. There's two approaches here. Right? One is a partner driven approach. Right? That, you know, we get a foreign company that wants to leverage somebody like Alfred, and there ultimately is another partner that is is there who has the deepness and the rails and the relationships and all that good stuff. I think that that's a lot more accessible for folks that are coming outside in. Folks that are building direct are finding out real quick what I said.

Argentina is not the same as Mexico. Mexico is not the same as Colombia. And it takes a long time to build one market. It takes even longer to build four. Right? And I think that you see that a lot in Latin America. You have very successful companies in Brazil. I think Avanilla and Trace are smashing it. And and, again, I admire those companies deeply, but it's not the same to go from Brazil to go to Colombia. It's not the same to go from Brazil.

And the reason is because you have Spanish speaking Latam and Portuguese speaking Latam. Now imagine somebody going from English

speaking America into Latam or, you know, it's it's it's it's it's a completely different environment. And I think that it's very, very important to to know these markets before before you get involved in them. Yeah, man. As we attempt to round the corner of this, it's such a beautiful business. I mean, just knowing kind of going back to where we started in the first place of just family and roots and focus on where you're from and, like, who you trust and what you know.

It's it's a really cool kind of ethos that you have. It's like, we're gonna we're gonna build this business with the people that we trust and the family we have, We're and gonna do it in the parts of the world that we can be human and understand and resonate with and do it do it in a true way. We're not gonna try to be something that we're not. But for the places that we are and who we are, like, we're gonna win. We're gonna, like, be true. It's so cool.

Do you feel like you're gonna run into I'd imagine that, you know, that sounds great, but that is limited in terms of, like, the what do you say to, like, a VC or just a growth for someone who's only thinking about growth with that, like, at all costs, are you worried that mindset's gonna inherently limit the business, or you don't think that's a problem?

No. I I don't think that's a problem. And to go back to, like, the family stuff is great and, you know, the culture stuff is great. But at our core, we're selling trust. Right? We're building a payments company, and payments is all about trust. And I think where we spend a ton of time on is building deep relationships with our customers and with our partners. And, again, you've been to our office. Our office, every single Friday, pull up to Mexico City. Yeah.

And you'll be in our office, and there's a happy hour, and it's open bar. Customers can come in, have drinks. And that is the culture that we're building. Right? It's a it's a culture of trust. And to the point of the the salsa joke, we're building relationships everywhere we go. Right? And we're making sure that we have the right team on the grounds that are also mirroring that culture that we wanna give up to to our customers because at the end of the day, at our core payments, it's all about trust.

It's all about, you know, who's on the other side of the service that they're giving you. And it's why we've been very adamant at building direct because we don't wanna tell our customer, be in the middle of us and a provider or a third party provider because it's something that is out of our control. Right? And if you look at LATAM as a region, it is a 100% a trust based culture and an ecosystem. Right?

And for us, like, far beyond what we're building, which is obviously tremendously valuable, we wanna make sure that people know who they're building with. And I think that that's ultimately what wins the long game. And it also protects our marches. Right? Because our customers are relationship buyers. Right? They're not really going out and shopping because they understand that they can trust us for what we're doing. And if they need anything, they can call us.

And I'm very proud of our team because, again, like, we're not only building this in Mexico, but we're building this across the region as a whole. Yeah. Yeah. Last kinda question going back to one thing. You mentioned around six months ago, you started seeing a difference in, like, the flows and where they were coming from and where they were going and going from domestic to global. What do you think drove that? Like, what do you think was behind that shift? Regulation,

you know, more serious players coming in and wanting to use this technology as as a settlement layer. Like multinational companies, global companies. Exactly. Banks, multinational companies, traditional businesses. Right?

And I think that's really what our ICP is and what we're pursuing actively at Alford is businesses who've been operating not for as long as stablecoins have been alive, but businesses who've been operating for twenty five, thirty plus years who have needs to move capital globally and are looking for better ways to do so. And, obviously, the acceleration in in stablecoin adoption and and regulation has helped our business tremendously,

and that's where we're seeing a lot more cross border payments because of that. You're having a lot more of, like, the traditional players come on chain. What are the so you're having these happy hours. I wanna come to one of these, by the way. I gotta I gotta pull up one of these because I remember we had a before we even I think we're doing the live show, I was, like, trying to explore different formats of what we wanted to do. And I was like, you know, it'd be really great. It's just, like, once a week.

Just find a way to, like, pull up a stream at the Alfred office and just like kinda do the cheeky pint Yeah. Model of getting your customers and talking about it. Yeah. Because one, that would just be awesome content to get. But two, I think the where my mind is going is like, I think people really and I I'm one of these people wanna understand more of what builders right now what are the questions they're asking?

Like, the bankers you're talking with, the multinational CFO you're talking to, like, what are they reserved? What are they feeling reserved about? What are their what are their core questions? Mhmm. What is making them feel finally comfortable to go use stuff like this? Like, I think we wanna be we wanna be a business that helps, like, surface those things and and helps facilitate those conversations. So maybe we can do a podcast on that, a little mini show or something.

But what are some of those right now as you're having these conversations in real time? What are some of those key both, like, core questions that you're hearing from these leaders?

And also, what are the things that you find are getting them over the edge of commitment right now? So one big thing, again, going back to trust is huge. I think one thing that we've been super focused on, especially myself over the course of the last six plus months, has been the talent that we're deploying locally. So the people that we actually have sitting in these chairs interacting with with these different CFOs.

And, obviously, that is what creates the trust level, and some of the background that some of these guys come from is super important. So the sales team is actually kind of localized and focused in that way? Okay. A 100%. Cool. And then two, it's these businesses have been working with a broken system for very long. It's finally got it to that inflection point where they're willing to try new technology that is gonna bring them better solutions. Right?

And I think that's the opportunity that Alphra has along with all the other companies that have sat on this podcast is that, fortunately, we're going against a system that has been terrible. And the way that we win this, obviously, is distribution, and distribution is built on trust and scale. Right? How fast is your company growing? Who else do you support? And who am I doing business with? Right?

So for us, being in that intersection at this moment is extremely important and and where we've been able to win a lot of business. And I honestly see the next two years being extremely busy because I still think that there's so much business at Sideline that is still doing things via the TradFi way. And it's really cool to think that, you know, in a market like Latin America, Alfred has positioned themselves as one of the players where businesses are going to for for these solutions. Yeah.

Excited to continue to follow the journey, man. Thank you, brother. I gotta say, I love what you're doing here. I'm a big fan of you and your team. You guys are amazing people, and I think that everyone who's been here, everybody who knows you, feels that way about you guys. So I'm I'm excited to follow your journey and what you guys are doing, and Appreciate that. Appreciate that, man. Thanks for coming on. Of course.