$5 Trillion in Idle Business Cash and How Stablecoins Fix It

We got The matching outfit. Hey. We finally made this happen. We we're coordinating on the color schema today. It's amazing. Also, that that intro, I'm digging that intro, man. That's like retro nineteen nineties New York City. It's got a vibe to it. It's got a real vibe. Thank you. Thank you. We're trying to, you know, shout out to you guys. I'm just I'll just pop this up right now. You guys have a pretty good vibe too. I've always appreciated the just the visual aesthetic of Stable C.

I feel like you guys are continuing to bring this, like I mean, you've always prioritized that sense of design in the products and the way that they feel. Where does that come from? Is that is that Julie, or who who's really bringing that muscle here? Yeah. So it's it's it's definitely Julie who's our chief marketing officer. She's amazing. And then we have a designer

that we've been working with for a long time. I'm in the fintech space. I'll keep his name confidential. But He's Tanner's already keeping secrets. He's already he's already withholding

the the juice. We'll get some scoop. We can keep the designer top secret. Whoever it is. The real thing I wanna know from Tanner is where he Tanner has a list of events that he goes to in the world of, like, b to b enterprise that, like, all the good leads are at, but he doesn't like, none of the here's the sauce. It's like, none of the actual clients that you wanna win are showing up to Consensus or Accelerate or these industry insider conferences.

All of the leads are at the, like, extremely boring hotel conferences that, like, are completely outside of our space. We don't know which ones Tanner is going to, but that's apparently the strategy they're deploying. That's right. It sounds like it could be working. That's right. Can't can't give away the playbook. It can't give away the ship yet. But I do think I I was I was at consensus, and I was I was joking with somebody.

I was like, if there was, like, a partnerships person from, like, Coca Cola or John Deere that just showed up at consensus Everybody would be just They would just flock. Yeah. Yeah. That's right. Lobby in Indianapolis.

The partnerships person at John Deere is chilling with no stablecoin

folks all over him. Yeah. Yeah. That's that's exactly right. Pretty much every every time we do some sort of conversation, I always give a shout out to John Deere and Coca Cola. They've yet to reach out, so maybe one day somebody somebody from Coca Cola and John Deere tag them. Yep. Should be a sponsor of Stable Dash.

John Deere would be a perfect sponsor of Stable Dash. Put on a little trucker hat. Right. Okay. So Tanner, we had you on a couple weeks ago, and we got cut short a little bit. We were diving into the WisdomTree stuff. That was, like, fresh off of the announcement of that. Give us the maybe update. Like, how's that been? What are you seeing? It's a couple weeks into this. Any news on this front? Anything we missed last time? Shout out to Julie who's here on this. Hello, Julie. Guest star. Guest star. She's amazing.

Yeah. No. The partnership has been

it's it's great, honestly. We've been off to a great start. The Whispering Free team has been stellar to work with throughout this whole whole process. And then on the adoption side, we're seeing pretty good adoption for tokenized money markets and just just tokenized real w or real world assets in general, mostly from the the real economy. And what we at Stable City mean by the real economy is with companies that aren't in the the tech universe necessarily, so companies that have physical operations around.

John Deere. Shout out to John Deere, Coca Cola. Exactly. Shout out to those guys. Yeah. So, you know, we're seeing a lot of a demand for that. And, you know, last year was all about stablecoins and still very much is in terms of cross border payments and the utility on the retail side, and we're seeing more and more adoption for on the b two b side for stablecoins in virtue of cross border payments.

But, also, this year, what has pick piqued the interest of of the market is access to RWAs and access to tokenized digital assets. And I think what's driving a lot of that is, you know, you've got roughly about you know, every politician says that, like, small businesses are the the backbone of The US economy, etcetera, etcetera. But if you actually unpackage that a little bit, there's about $5,000,000,000,000 that sit in a checking account for businesses in The United States that is not being put to work.

And so the question becomes is how can you take Wall Street products and provide them provision them out to Main Street in a way that is safe, a way that it is in accordance with the regulations to allow some of these businesses to put their capital to work? And what we're seeing at the moment is that companies in in the real economy, you know, they they have a real pent up demand for whether it be savings products or vehicles, access to capital markets to put their idle cash flow to work.

And there's a ton of use cases to dive into that, but we're pretty excited about that opportunity

and to continue to see the increased demand for some of these products. We so it's it's interesting. We actually, right before you, had a Piot from StableWatch who and he's building in the USDS Sky ecosystem and RWAs and the yield and earning and interest that comes from them is like definitely the world that they're coming into. And the idea of building these types of yield bearing products that can then be embedded within a platform like StableSea is something that he was talking about.

And so how do we how do we bring these two worlds together? You have, like, issuers and assets that are wrapping and and building portfolios and curating certain vaults, and there's a lot of complexity there. How are you thinking about actually unlocking and and on like, bringing access to this group that you're talking about that is there's so many deposits. They're sitting idle. They're not earning. They're not productive.

How do you actually bring that to life within Stable C, and how are you thinking about embedding RWAs and earning unlocking earning for some of these users right now? Yeah. So Stable

C, you know, we build up the application layer. And so what that means is that we own the customer relationship. And so when you use a Stablec terminal, it it does look like a bank account in some ways. We are definitely not a neobank. We're a treasury management platform.

But when you log in, it looks and feels very Web two y, and that's that design is intentional because, you know, again, if you're the owner if you're third generation owner of like a carpentry company in like Florence, Alabama, you're gonna log in and you're gonna wanna see something that looks familiar to, like, your bank that you've been using for your entire life.

And it's not incumbent upon the user to understand how stablecoin rails work, what our digital assets, how they function, to the same extent that, like, most business owners aren't sitting around thinking about their payment rails of, like, ACH, same day ACH, RTP, the clearinghouse, etcetera. Like, it just works. And the providers that sell into those groups of folks, they abstract away that complexity for them.

So the way in which you marry those two worlds is you have a lot of great companies out there that are building in the infrastructure space, whether it be DeFi protocols, whether it be in the tokenized RWA space, whether it be in the tokenized security space. And they have they're best in class infrastructure providers. And the question is is, like, how do you build application layers that are trustworthy that can go and and distribute those into the real economy?

And so that's where StableC was working with our downstream partners like WisdomTree to provision access to WisdomTree's products. And then we go and we do the education. We do the the KYB. We do the the setting up of all the the the wallets and the on ramps and off ramps for our partners in in the real economy. So a question about that, Tanner. The construction

business owner in Alabama, the steel truss manufacturer in Pennsylvania, the many you said the 5,000,000,000,000.

Is that the number? Yeah. That's right. Based on our research.

Yeah. So a big number based on your research, but it's it's big regardless. That all that idle cash sitting in funds of the backbone of the American economy. When I think about that, I love what you're saying about kind of thinking about the user experience of it feels web two. It feels sort of easy to adopt for these folks, but I still would think there's a chasm of adoption to actually use this. Obviously, there's a financial incentive to do so. You start to say, hey. You could really get yield from this.

But how do you kind of cross the chasm of trust, of adoption,

of whatever preconceived notions people might have with this to actually get that huge amount of the real economy adopting this kind of thing? Yeah. Yeah. I mean, there's a ton of different ways. There's, like, channel partnerships. Right? There's a lot of go to market work with, like, our downstream partners to do, like, lunch and learn sessions.

It's also you know, if you're in Silicon Valley or New York and you're building for the real economy, there's just just general basic principle of, like, you need to go into the real economy in a lot of ways. So just like You gotta go. Yeah. I mean, and and it's it's an amazing learning process too. Right? Like, you sit down.

You you have, like, lunch and learn sessions with, you know, CFOs or CEOs in in different cities around The United States and see it's a real there's a real poetry about it because you get to learn about, you know, the local economy. It's like what pain points that they have. You know, most of the time, it's not even payments related. It's something else. And then, you know, you start having conversations around payments and savings, and, you know, they they take a look at their banks, and they're like, hey.

Our our credit unions or community banks don't offer x, y, and z today, and we use some third party for cross border payments, or we use some third party to to maybe ink out a little bit of, like, yield, like, 2%, but it's real pain. And so you you start to really understand their pain points, and then that's what you ultimately go out and build build for is, like, taking that feedback and, yeah, recycling it. Hey.

You and the presidential candidates are going through Middle America on town halls, you know, listening to people. I love it, man. I'm from a small town North of Nashville. So, you know, I I grew up in the South, grew up in, like, the rural the rural areas. So,

yeah, I love it. Hard to I mean, I know, Tanner, I know your background and a lot of the team or some of the team coming from block and square or something that I just remember the magical moment of that business taking off, and I think there's such an opportunity to try to find what that magic formula really is. I remember being in my fraternity in college, and one of the smartest guys who was a pledge brother of mine, he was obsessed with the Square reader, and he, like, ordered one.

He's like, you can just order these for free, and, they're not even charging you for they're just giving these away. And it was like this electricity about that product and what it was able to do, and I think there's there was something about what they've cracked in the early days with the reader that just allowed this sort of proliferation of their tech that created that sense of excitement.

And I think that was the first time I heard about Square was, you know, from my my pledge brother who didn't even have a business. He just wanted to, like, mess around with the reader. And what do you what do you think is you know, we've talked about design. We've talked about, like, showing up in the right rooms, presenting presenting the product in a way that resonates.

What are some of those principles that maybe you've you've taken from your time at Block or just you're thinking about creating that sense of proliferation here? Because I think what we've talked about is there's so many there's, like, in group bias on the timeline or, like, kind of close like, we all it feels like we're in this kind of echo chamber. How are you thinking about breaking out of that and really reaching and resonating and and hope doing that within the product, like, ideally, product led growth? Yeah.

Yeah. For sure. I mean, philosophically,

you know, Block did a really great job both at Square and Cash App of taking financial services and for financial service products and then provisioning them out to, you know, businesses that were historically too small to get best in class financial services. Right? And that's ultimately what they what they did and where they found their product market fit. And then for for us, you know, it's that same fill up fill up both on the payment side.

Like, if you use a transaction bank at, like, Goldman or Citi or JP, which are all best in class transaction banks, and the three of us ran, like, a Fortune 500 company, right, we would essentially and let's say we had a billion dollars in free cash flow. Well, Goldman and Citi and JP, their their transaction banking teams are providing us white glove services, and they're taking our free cash flow, and they're putting it in futures, forward swaps, derivatives. They're they have a custom hedging strategy for us.

They're putting it in money market single. And, like, our money is always at work. Right? And when we need it, they'll facilitate cross border payments. No problem. Right? And so if you think about what, like, the the best companies in the world get access to is access to capital markets and relatively cheap payments for their treasuries where, like, supplier pay ups are all over.

Now if you're a steel manufacturer in Florence, Alabama, and you make $30,000,000 and you run a 30% gross profit margin, that's pretty good business. Right? But what do you have to use if you have a state like, a a credit union that that is your bank or, a state bank? You pretty much have QuickBooks and you have hope. And you're like, I don't know. We'll figure it out. We got some capital, and we'll try and move it around accordingly.

And so with, like, the provision of Web three infrastructure, you can essentially take capital markets products and and payments products that were historically relegated to the top 1% of companies, and you can now provision them access, and you can provision them out to the real economy. And so, like, that is our philosophical north star.

And then, like, what we're finding as, like, a mechanism for for growth and what that product spark is is really around digital assets because a lot of them historically have not had any access to savings vehicles before. And there's it's not just about saving an idle cash flow. It's about finding every specific like, every business is different.

I mean, take, for example, one business where they came to us and they said, you know, we are allocating I'm a make up a number, but we're gonna we're gonna allocate a million dollars to bonuses in q one. And so in q four, we're going to sweep a million dollars out of our operating capital and just set it aside, and we're gonna hold it for four weeks because we know that bonuses are coming out four weeks later. That's a million dollars that's just sitting in a checking account waiting to go out. Right?

So now, companies of all sizes that do q one bonuses in q four can sweep into Stable C, make money on a tokenized money market fund, and then when those bonuses need to go out, they can they can send that bonus out. Right? Like, that's one tiny use case. And it sounds relatively trivial until you realize that, like, you know, some of the companies that do payout bonuses, it's, like, it's pretty sizable.

And if you make, you know, three and a half percent on a million over the course of, like, six weeks, it's a fair fair chunk of change. And so, like, that's one. And if you think about, like, if you have a cross border payment use case, how cross border payments work today is that if you know that you have if you're paying a supplier in, like, Brazil and you know that you're gonna need to wire $500,000 to them, you essentially move that 500,000, you escrow it, and you, like, consolidate it as a liability.

You tee it up into some third party payment platform, and it just sits there, and it just waits to go out. So now you've got $500,000 that just sits for fourteen days in some sort of, like, tech platform, and then it sends out to the Brazilian supplier. And they you know, you'll you'll lose seventy, ninety basis points on that. Right?

And so now with a platform like Sable C or the technologies that Web three provisions, you can take your liabilities, whether it be supplier payments, q one bonuses, etcetera, put them in a money market fund. And then when the moment that you need to utilize that, you go, you know, money market fund, USDC, USDC to local fiat, and it all settles within the same day. So Mhmm. It's, you know, it's something that we call pay from yield.

But, again, it's it's incremental value, but I think that financial services in general, like, you don't really wanna disrupt the financial system overnight. Like, that is probably not a great thing for society if, like, the financial system was we woke up tomorrow, it's completely different. Right? And so you like, how innovation works, it's like the the age old saying is that you stand on the shoulders of giants.

And what that is is, like, you stand on all the great work of innovation that has come, and you make marginal improvements. And that marginal improvement should allow you to capture some sort of market share, and then the market share allows you to grow a business. And, like, that's how innovation works. It's not these, like, great quantum leaps. Sometimes there are. Like, AI is a bit of a quantum leap.

But, like, for the vast majority of companies in Silicon Valley, it is, like, taking these incremental technological leaps to make products marginally more cost effective, marginally better, and then that's how you drive innovation. Like, Robinhood, they just took away the trading fees, and then they just got a ton of hype. Like, was that revolutionary? Like, no. Like, from a technology perspective, no. It wasn't. But was it good business that led them to become a great company? Like, yes. Yes. It was. Super cool.

Tanner, we gotta cut this short a little bit.

It's always great learning from you. I really appreciate you the way that especially you you prioritize and you see the real business owner, and you continue to put them in the front and center of how you think about winning and what success looks like. It's really refreshing. I think a lot of teams, a lot of builders will there was actually, like, a a thesis paper I was reading yesterday, a really interesting company called Street Building. I'll send you this after, Tanner.

I think you'd find it interesting, but just the ethos around not building for the room that you're in, but building for the the market and the opportunity that's out there. I think crypto has had so many, like, phases of doing that wrong where we're, like, kind of creating volume and we're creating products that are, like, serving ourselves, and they're kind of appearing to be successful or appearing to be like, volume is going through the pipes, but it's it's really, like, weak. And so thank you for that priority.

I'll I'll send you that that thesis. I think you'd find it really interesting from street. Street.app is the name of it. I was talking to Lucas, their founder, yesterday offline. It was a really interesting business model. Zach, any final thoughts or questions from Tanner? I know we gotta we gotta wrap here. I love it, Tanner. You brought the energy. You gave us some insight, and I will catch you at an Alabama catfish restaurant soon. Look forward to it. There you go. Alright, Tanner. We'll have you back soon, man.

Thanks for the time. Gotta find this street.