Inside the WalletConnect Stablecoin Payments Report with CEO Jess Houlgrave

We're doing great. The last time we were talking, we were doing the podcast. We've kind of added a couple things. We do this live now twice a week, and it's always fun to cover reports like this. And and there's so many amazing companies like Wallet Wallet Connect who are blessing the industry with insights all the time. So we actually, a huge reason we wanted to do this show in this format was actually because of a lot of these research reports.

We felt like there were so many of them that hit the market, and we felt like don't get a lot of the tender like, the TLC and the attention that they deserve. And so we wanted to find a space to have the people who make them and bring these insights to market really go a level deeper. So would love to do that and and cover kind of the the high level of what this report is. But, of course, before we do that, we'd love maybe an intro to to you and WalletConnect and also shout out to go back to that original episode.

We really dove into your background and your early story with Bitcoin. Yeah. I remember your your your experience studying, and you got your master's in what again? What was it? I'm forgetting. It was

it was really interesting. It was in that that, like well, it was economics, specifically around, like, the history of monetary systems.

That was that's the bit of my brain that got hooked. There you go. And you you have been hooked ever since, it seems like. Give us give us the quick intro, and we can dive into the current state of WalletConnect.

Yeah. So I'm Jess Holgrave. I'm a CEO of WalletConnect. We've been I've been now with the company for coming up to three years. I have a background across payments economics a long time ago, more traditional finance. Been kind of in and around crypto for more than ten years now, which probably explains the the gray hair. And at WalletConnect, we're basically a network of apps and wallets. So we have about 700 different wallets on the network.

Those vary from the retail consumer wallets that people use like MetaMask or Trust Wallet, for example, all the way through to more institutional offerings, Fireblocks, BitGo, etcetera. And then on the other side of the network, we have about 80,000 applications. And an application can be a merchant for a payments acceptance. It can be a trading platform, a game, or pretty much anything else. We basically provide this communications and connectivity layer that allow those participants to interact with each other.

Last year, it resulted in about $400,000,000,000 of value moving around the network. We will get to work with all chains, all different ecosystems, which is one of the real pleasures. Because of this kind of network, we see so much interesting data about what is happening for real, not just what people say is happening, but actually really granular. We also have this great community that we use for research and, as I said, get to partner with so many different people.

And it's one of the reasons that that we produce reports like the Stablecoin and crypto report we did last week, is to really try and share that insight and that learning. What are we seeing? How do you how do you get granular? How is it different in one country versus another? How do people think about chains or tokens differently in different places? So, yeah. So that's a that's a little bit about us. Yeah. So I I will say go ahead, Zach. No.

I was gonna say I I love just how much of an advocate you are on the space for the side of one, you have an awesome term. Drew and I were talking about that earlier.

But we don't you don't see that. Right? You see the two sides of the space that are either, just use a stablecoin card, let the people in the emerging markets that wanna use do it. And if you're in The US or you're in The UK and and you can go use Revolut or whatever your bank is, just forget it. Your report paints a very different picture. I mean, I'm looking at this, you know, 79.2 percent of wallets hold, less than a $100. 0.4% of wallets hold 98% of value. That's a massive number. Why a payment terminal?

Why the need for this? And what are you actually hearing from consumers that are this 80% of the market that have less than a $100 in the market in in their wallets?

So your first question, why a terminal? I really believe that all value movement is gonna move on chain at some point. It's gonna take us a while because there's so much existing infrastructure. I think it's a kind of an inevitability. This technology just makes sense. It is so efficient. It is so quick. It's so useful actually from a compliance perspective for underestimate it and actually think it's problematic.

But I think as the regulator becomes smarter, as we all understand a little bit more, and as we build the right tooling, it gives us way more than we've ever had before with the existing financial infrastructure. So I think there's a bit of an inevitability about it. Things like crypto cards solve an immediate problem, which is that you have people who want to to be able to spend their crypto and can't offer a really effective way to do that. But there's two issues.

One is cards aren't accepted everywhere or the card fees are really high. I spent the beautiful privilege of spending about a month in Africa last year. If I try and pay with a card there, I would get charged an extra five to 8%. That penalizes people who are trying to use cards. And the reason that that happens is because the merchants pay such high fees on card transactions.

So whilst these crypto cards solve the problem for the end user of how do I spend my crypto, doesn't solve the problem for the merchant of how do I have low cost effective payments. Because if I'm a local business running on pretty tight margins, 3% of a transaction just goes to a card company is an awful lot. And so I think what we have tried to do with WalletConnect Pay, which is one of the products that we build around the network, is to say, actually, you can have a payment that takes place fully on chain.

If you want to off ramp at the end, we can facilitate that for you. But actually, over the long run, I think what we will see is merchants holding stablecoins. And so it makes complete sense that they would want to accept those payments natively over a stablecoin, and we can do it for a fraction of the cost. So when we partnered with Ingenico, they have about 40,000,000 terminals globally. They work all over the world, everywhere from airports to cafes to restaurants and and all sorts of things in between.

It was an amazing opportunity for us to work with such an established player to bring real on chain payments to life. So that's been that's been awesome. For off the back of that, really, we've partnered with with many others. So it's not just terminals. We do ecommerce, pay by link, kind of form factor is is is omnichannel. But this this idea of me being able to go and pay I have a beach restaurant down here that accepts crypto, and I just love it because I go, I pay wallet,

and that's the payment system of tomorrow. We did see speaking of the beach the beach example here, we might as well pull up this demo. This was great. So this is you actually, like, showing and walking through the user experience of I love this. How this actually works. So you're using it looks like a safe wallet here, scanning a QR code. Yep. SafePal. Are you at this destination right now at at the beach? You look sunkissed, and is this where you currently are? This this sounds lovely.

Far. This is great. I we need to be contracted to come out and do these videos so we have an excuse to go over those you are. I think it'd be cool to do, like, like, just do a video where you go to a random city, and you're like like, you ever seen, like, Yes Theory where, like, you have to survive on, you know, a $100 a day. Do a, hey. You have to survive on $500 this week, and you can only go to places that accept, you know, stablecoins as payments. And you have to go hunt every single place down.

Drew, there we go. There's our next one. If I can go out to someone deployed If wherever she was here, then I'm I'm in. I just go to that one of those. This, like, this it's almost like a chicken and the egg conversation. So people like, oh, merchants merchants don't wanna accept stablecoins because consumers don't have them. It's like, well, but our consumers not not paying with stablecoins because the merchants don't accept them. And so which one do you think we need to focus on coming first?

Payments is very so interesting because

there is so much that is chicken and egg about them. And actually, even sometimes, once you make a payment method available to end users, they don't use it because maybe the user experience is bad. So you might have someone who's got the stablecoins and a place that wants to accept them, but the end user experience is so bad.

It's one of the stats that came out in our report about seventy six percent of people who have tried to make a crypto payment have abandoned that process because gas fees, all of this kind of user friction. So there's so many parts of that chain that you have to address. I think there's a couple things that give me confidence here. So the fact that crypto backed cards are growing so fast, for me, is real evidence that people want to be able to spend their crypto.

The card is a really useful form factor for them to be able to do that very, very quickly without changing too much behavior. And so that that for me is a really strong data point. People actually do wanna be able to spend their crypto. The second thing is and and this whole thing of, like, how many people actually hold stablecoins, I think we're gonna see that drastically change over the next eighteen months. More and more banks, more and more neobanks are issuing wallets alongside retail bank accounts.

That will be where a lot of people will hold their crypto assets and their stablecoins, and they wanna be able to do things with them. They'll be wanting to to pay with them. They may even not know that it's a stablecoin under the hood in a way that most people don't know the difference between the digital cash balance that sits in their banking app versus, you know, real cash in the bank. It's all just about value. And I think this is where we have to make it so easy for people. Yeah.

And we have to drive incentives for everyone in the value chain. Why would an end user want to switch? Maybe because we can give them some cash back and other incentives so that this becomes more compelling for them. And why does the merchant want to switch? Well, you've got to make it really easy, first of all, because they're not crypto experts, so they don't want to go around having to learn about chains and tokens and all this sort stuff.

So you gotta make it super easy for them, and then you gotta make it compelling. Is it cheaper? Do they get settled much faster? So all you have to kind of address all of these different participants. And I think that that, as you say, it's definitely chicken and egg, but we're seeing such strong momentum

that, you know, I think that the yeah. It's kind of taking off, so I think it will come. You know, I've I've thought a lot about this. You know, we're just seeing this massive rise, at least in where I live, with dual pricing. You know, you go to checkout, and or if you're paying with a credit card, you're paying you're paying 4% as the consumer or if you pay with cash. I just don't carry cash.

I don't I'm not gonna, you know, go get up at my table and go find cash, but I do wonder if I was presented with the option of pay with stablecoins and then now I just have to do a quick on ramp and then I could pay there and it's 4% less or you're getting cash back or I think of the Starbucks model even where you're now you're getting additional points where you're when you're spending through their platform. It just really begs the question for me, what would consumers do when presented with that option?

And I think this is my favorite, like, anecdote about

new payment methods for consumers. I always go I'm from The UK originally, and I always go back to UK Open Banking, which ten years ago was promised to be this, like, amazing new payment method. Everyone was gonna use it because it was gonna be such low cost to merchants. And today, it's less than 1% of commerce payments in The UK. And why? I think it's these two things. Number one, the user experience is a little scary.

It kind of says connect to your bank account, which is something that feels a bit unfamiliar to people, and you have to kind do this switching, you know, I go into my app, I go back to the other app, etcetera. And then there's also very little incentives. The merchants who've been most successful with getting Open Banking or other account to account cheaper payment methods adopted, they have actually been very forthcoming with user incentives.

So they've been the ones to say, get 5% off your first purchase if you make a payment with open banking or save or get loyalty points or or or whatever that is. And so you have to create these use of behavioral changes. Similarly with open banking, once somebody has done it once, they are much more likely to do it again. So the repeatability is very high, but it takes on average about three attempts for somebody to complete a successful open banking transaction.

And I think we're in this kind of parallel with crypto right now where the user experience in many cases is still really poor. That's one of the reasons that we focus so much on a great user experience for WalletConnect Pay. It's a single scan and click pay, or it's tap your phone and click pay. Gotta be really, really easy. And then you've got to build in the right incentives.

I wanted to, before we get too far away from this, something that seems extremely unique here about, one, the research report, but also just the distribution

opportunity is this relationship with Ingenico. For those who may not be aware of the breadth of that business and how important they are in the world of payments, maybe just, like, frame frame us up a little bit in terms of that relationship. What are you doing with them? Why is that so important? I feel like this is kind of a an example that could replicate many, many, many times with other partners like them.

I'm looking at the report here actually, and they say the role of payments infrastructure providers being Ingenico here is to absorb complexity so the consumer gets choice and the merchant gets simplicity. Speak a little bit to this. I think the Ingenico relationship is really cool. Ingenico are

one of the biggest hardware payments companies in the world. They have about 40,000,000 devices globally in shops, restaurants, bars, petrol stations, all sorts of things. And we actually started working with them back in about February 2025. So this relationship has been going on for a really long time. One thing that they are real experts in is in store user experience. How do I make that fast, efficient, delightful to the end user?

It's very different from e commerce because if I'm buying something online, there's no one waiting behind me to order their coffee and getting frustrated that it's taking me too long. So you have a very different you have a very different set of challenges when you're talking about in store payments at the physical checkout versus what you have through an ecommerce environment. You also have a lot less real estate. So I'm doing a big desktop ecommerce checkout. I can collect compliance information.

I can do all sorts of things that really, really hard to do on a device. What we worked with them on is how do we iterate this to get to a really delightful user experience.

So we looked at all the problems that exist out there, you know, needing gas tokens, the speed at which these transactions take place, abstracting away the fact that you might have PYUSD on Solana, and somebody else might have, you know, something completely your EURC on base, and you just don't know who is coming into your store, what asset asset they have, you don't have the ability to kind of collect compliance information. Right? So we basically broke down every step of that payment.

And crucially, also, the interesting thing is not needing to educate the person that who's running that checkout what crypto payment is. If you have to tell you know, it's maybe it's okay if you're a sole trader and you're really interested in crypto, you can kinda get it, but there's no way that Starbucks wants to educate all of the baristas what a crypto payment is and all the things that can go wrong and how to help their customers make payment. It just doesn't happen.

So we had this really, really high bar that it's gotta be one click, really fast, really compliant, really easy, and where we can get this drop off rate much, much lower because it's absolutely useless

if 70% of people who've tried to make a crypto payment just can't. Never gonna work. This leads a little bit into and you mentioned this at the top of some of the answers that you were giving around cards as a transition mechanism to actually solve for a lot of these issues, and this was something that you you broke down really simply here. Cards as a bridge.

Maybe we can walk through this and then how you know, because Ingenico, you mentioned, is really well known, distributed on the hardware side in a lot of these coffee shops or retail merchants, companies of all kinds. I mean, Ingenico, believe, is when you you go to Walmart, I think the largest retail company in the world from a profit or revenue standpoint, I think they're using Ingenico. Don't quote me on that. But they're everywhere is the point.

And how do do you see cards as a key way to because the the use case that you demoed was a was a more of a wallet use case where you were scanning a QR code. There wasn't actually a card involved. Personally, way more way more bullish on the card use case for actually making the frictionlessness

happen. You go into this a little bit. Maybe you can speak to that. Yeah. So I think what cards have done really well is say, you as the user can keep your assets on chain, and we will manage all of the rest for you. And so for the merchant, they don't need to know anything different. They don't know that actually it was stablecoins in a wallet versus dollars in a bank account that was the funding source for that transaction.

It means as the end user, you just have instead of pointing a card to your bank account, you're basically pointing it to a stablecoin wallet. But what happens with the flow of funds is that those assets come off chain really quickly. They move through these traditional rails and the merchant receives fiat. It's great, but it doesn't necessarily solve the merchant side issue.

Great for consumers, but for merchants, they get settled on the same timeline and they also pay the same card based transaction fees that they do today. And this is why a lot of merchants and their payments partners are actually really interested in moving away from cards because everybody is searching for those few extra basis points on their on their payment flows because that's what helps their their margin.

That's why I think it, for me, cards are a little bit transitionary because they work really well, but they don't work for everybody. They have the stablecoin card hasn't solved all of the problems that exist today, especially on on the merchant side. You make a really good point though, which is, again, this user experience has to be great. And in some places in the world, the QR code is a really familiar form factor. Yeah. People are used to opening up an application or just using their camera to scan a QR code.

If go to Southeast Asia, that's the predominant kind of payment interaction. But it's not the interaction everywhere. Obviously, in The US, certainly here in in The EU, this like tap functionality is what everybody is used to. It's so delightful. I literally can just, like, tap my card or tap my phone, and I and I go. It's really secure as a transaction. So that's one of the reasons we've also been iterating, and later this year, we'll start to roll out tap so that Nice.

Instead of when I tap my phone and it asks me, you know, to double click for a card payment, when I tap my phone with with one of these devices, it will allow me to just open up my crypto wallet and I'll click pay and all of those funds will will stay on chain. I I often talk with our team about this, like, the chasm. And by the chasm, I don't mean crossing the chasm in terms of adoption. I mean the chasm between web two and web three payment experience. Is.

And for users to want to change, it's got to be something that feels familiar, that is fast, and that that that they're used to. So that's why all of these different kind of form factors, whether it's QRs or TAP or receiving a link or increasingly asking my agent to pay, of course, it's got to work seamlessly.

We don't have time to go into this, but something I've been personally fascinated by in this specific part of the stack is the card as a signing device and something that is really interesting getting to know the Arculus team, especially is their technology around security, signing, and having these these physical cards actually be like like, Arculus is the company owned by Compost Secure. I'm sure you're aware of these guys. Like, they built the Coinbase the Coinbase card.

These things actually serve as signing devices. So if you have a RAIN card, for instance, a RAIN issued card, Arculus is provisioned on it, their tech, a tap of an Arculus card at least has the function to move stablecoins from one point to another point.

And I think it's a really interesting thing to explore here or keep top of mind because I think it can solve this native stablecoin settlement that's very similar with the QR code use case, but use a card as the actual signer where stablecoins can natively be signed to move around.

I don't know if you have any thoughts on that real quick, but I've been really I've been working with them on this and thinking through this with them, and it seems like a really big unlock if you can pair that with someone like WalletConnect.

Yeah. I think I'm a big fan of of the Arculus team and and the work that they do. And and I think that that their products are brilliant, that all all of their wallets are WalletConnect compatible, so we we work quite closely with them. The one challenge I would would point out, I think, is that it's a very proprietary kind of closed loop system. Whereas, you know, with WalletConnect, any wallet can plug into this. There's no cost for them to do that. Everything is running.

All of our technology pretty much is is open source. And so it's it's very compatible with all different kind of products. Whereas the Arculus approach is like you have to have this SDK and it works with these wallets that that we partner with. So very similar. And as I say, I like it a lot.

Just a a slightly different approach there. Yeah. It feels more closed or on a case by case basis versus open. That's interesting. Zach, any final I know I've been I've been controlling the narrative. No. I I can't help myself.

I the first half. I guess the biggest thing I just I the question that kinda, like, keeps me up at night in this next era is, like, how do we get more stablecoins and wallets that people are going and willing to use at point point of sale at checkout? What do those experiences look like? How similar but different are they going to feel?

You know, we talk a lot with people building in the tokenized equity space and how they're they're very set on that people want trading experiences alongside custodying their funds with yield baked in, and they kinda want all this this one stop shop. And I don't know where I land, but I would ask you, what do you look for? You know, what you saw in that video using the the SafeWallet. Like, what do you look for in these experiences? And that maybe how similar are they to your banking experience,

but in what ways are they different? So I think probably one of the most interesting changes, I guess, in the wallet landscape over the last few years has been people really starting to understand their customers much more deeply. This is a little bit of a kind of oversimplification, but I think for quite a while, we had 30 different mobile crypto wallets, kind of all looked the same. They had a different color scheme, but they all had exactly the same functionality.

And, you know, I picked the orange one or the purple one, but otherwise, they kind of got the same thing. Now, I think that space has become much more mature and the way that people are building wallets is with much more consideration to who is my niche customer here? And especially as you start to see banks, neobanks, and wallets all kind of converge and compete to own that customer, they've gotta do something really good in order to keep people.

So I think the wallets that know their customer really well, am I going for the pro person who wants all of that yield and to be able to do all this other complex stuff? Or am I just going for the person who is in a country where they don't want to hold their local currency, they want to hold a USD balance, they want to send it to friends and family, they want to feel really safe, really secure. All of this investment type activity is scary for them. And then you end up with something like the Opera Mini Pay wallet.

What a beautiful wallet. It works. It's seamless. People don't need to understand crypto to use it. It is just like, it's so brilliantly designed for this emerging markets novice crypto holder because they really understand their their their market. So I think it's all about these these wallet builders, the product managers that are deeply knowing their customer and building something that is is Product managers like Charles

from MiniPay. Shout out to Charles. I think he was one of our early guests too. I don't know if he's I'm I'm assuming he's still there, but shout out to him. He's he's I don't know if that's who you're don't know if that's what you're thinking when you when you say that, but he is he is definitely an amazing builder and definitely

behind MiniPay in many ways. It's a good love and when we're just, like, brainstorming content ideas here, like, what happened to take a know what? Some find people, no stablecoin experience, sit them down, onboard to five wallets, and have to go pick their one and then go use it at point of sale. Same day, cold start. I would I think that'd just be interesting data to find out, like, hey. What do people actually value in an experience? So I don't know, Drew.

Maybe we're gonna have to go deeper down this, like, practical this type of media.

I wouldn't be I wouldn't be opposed to it. Jess, thank you for the time. It's awesome catching up with you and and seeing seeing the focus that you you all are putting on this research stuff, in person payments, point of sale, ecommerce. I was I was telling Zach early, this is just a this is where I started my career in the point of sale, in person payment space.

So to see you you all be very innovative and focused on that gets me really excited excited to have you on more and continue to follow the amazing network you're building. So appreciate your time. Thank you very much. Always a real pleasure chatting with you guys. Enjoy wherever you are, if it if there's a beach nearby. See you.