EN Stablecoins in Practice: Real-World Use Cases Across Brazil's Fintech Ecosystem | MERGE São Paulo

And um while we get set up here, I just want to get introducing the next panel. So, we're going to be for next this next panel will be exploring the concept of stable coins specifically within the context of the Brazilian ecosystem. So, you're all probably aware that Brazil has long been a leader in fintech in financial technology use cases, PIX, etc. But, what happens when we inject stable coin blockchain native stable coins into that? So, that's what this panel is going to be exploring.

Um very honored to be uh introducing We have Carlos Jimenez, who leads BD and partnerships with Rain. Carlos, hop on up. We have uh Luis de Magalhães, who is the Latin America team lead at Be In Crypto. And we have uh Pedro Barreiro, who's director of banking at Nomad, and we have Marcos Nunes, who is CEO of Tangem Pay. So, I'm going to kick it over to Luis.

Take it away. You working? Yeah, okay. Hello. Hey guys, how are you all?

Um spoiler alert, everyone here is delayed with jet lag. So, a lot of long trips, but please be kind with us. Uh it's a pleasure to be here. It's I mean, I Be Crypto have been around um a lot of events, the best um the year, the best month, and I can see that merge is going to be different because there's a lot of good people here, incredible people from every institution. So, I can feel a great energy as well.

And we have heavyweights here with us, some of them on the stage right now. So, yeah, I'm very positive. I I I I know it's um just the kickoff today, but I'm very positive it's going to be amazing. So, um great to see you again, guys. Uh I mean, why don't we start with a quick intro um of yourselves, how you guys working with crypto and most of all some projects, your little bit of your background and how you work with stablecoins.

Pedro? Hello. Hello. Okay. Hi, I'm Pedro.

I work at at Nomad as banking director. Mostly overlooking how we move money around the globe and how we provide the infrastructure to which our products are built on. And Nomad has always been a financial institution that has served customers on the fiat world on the TradFi world servicing customers offering USD accounts, offering financial services in mostly in the US, access to capital markets and providing the effects services from Brazil to the US. And we have evolved the the whole infrastructure in which we started from TradFi and like the normal corridors using Swift, using the the normal traditional messaging services into what we understand is the next wave for financial services. So the future of financial services where where everything relies on tokenized assets.

This tokenized assets in this case specifically USD. So we with the with the with the case of stablecoins we have improved significantly how we move money around, especially from a treasury perspective, providing liquidity to our own internal treasury, improving and enhancing the capabilities for our customers to move money around the globe, to have instant services, to have the money where they need, when they need, and having the the ability in which we service them in a most uh in a most adequate way in where customers are are getting better in in terms of experience or getting used to to a better level of service. And where we see the blockchain structure and most in this case stablecoins is that as I said this is a next level of financial services where we really understand that this is the opportunity for growing it and adapting and once it becomes mainstream it will be the next generation. Carlos. Perfect.

I'm Carlos Jimenez on the Rain Partnerships team. Uh so basically what what we do is we're bringing stablecoins to typical card rails that a lot of you are familiar with. So a lot of what we're blending between traditional finance and crypto is making crypto actually spendable in the real world with a lot of our partners. Uh so we're really excited about that merging between crypto and traditional rails. Excellent.

Hi. Marcos Nunes here. Um was uh been in this space for for some time now. Um I actually was fortunate enough to participate in both sides in the traditional finance and now on the web three world for the past 3 years. Um previously I found Nose has paid the first debit card running on decentralized um balances.

And now running Tangem Pay. Uh Tangem is the top three hardware wallets in the world with over 6.5 million products distributed. Hopefully we can bring some some good content to this panel. That's great.

I told I told you guys heavy waiter. So as you can see we have Nomad in one side, we have Tangem in another side and Rain in the middle apparently, right? So I don't think the the the discussion here is about whether stable coins are working or winning. I think it's something more like are TradFi is TradFi in collision with DeFi or they're going to work together? What do you guys think?

I think it Hello. I think it's an evolution. Uh so, it's the next phase. As a as a previous said, the the DeFi, the blockchain world is the next generation of financial services. Everything available whenever you need, how you need it, and when you need it.

So, we understand that this is it takes time to have this adoption. It takes times to to become mainstream. And we're building the solution. We understand that we need to be prepared, and we need to be ready whenever this this uh this change or this switch will come. And it will come uh and the adoption should come faster than what we think.

Do you share the same opinion, Carlos? Is it an evolution? Yeah, I I think it's an evolution. I think there's a famous crypto story that a lot of people reference of a guy who bought two pizzas with 10,000 Bitcoin in 2010, and that did not age well at all. So, you what he was trying to do is spend.

And maybe at that point they thought Bitcoin was the mechanism to spend, but there wasn't That's always been the problem. How do you spend crypto in the real world? So, it's not whether it's crypto or traditional rails, it's I want to pay for something. Can I use either or or is there a more efficient way to do so? So, that we're excited that that's become a real thing.

You can spend crypto in the real world or bring efficiencies to your operations as a fintech or bank. Is there a collision course, Marcos? How do you see that? Um you know, um again, if we build on top of that stable coins is is a new financial infrastructure rail, um then what is out there is actually efficiency, cost reduction, money movement in much faster uh methods. You have better reconciliation, less errors.

You actually have the move of assets rather than, you know, having closed black boxes organizations like Silicon Valley Bank that you can only find out when things actually collapse. So, in all means, this is a great infrastructure play. I wouldn't pay so much attention to the stablecoin itself, but rather the entire evolution of the dynamic of programmable money. New, you know, compliance, new mechanisms to find out who is your customer, where is the transaction is going to coming from, origin of funds. Everything is traceable.

Everything is fast. So, tons of opportunities for institutions which want to play the game. Nice. Carlos, you mentioned that one step at a time. What do you we actually need to start implementing the stablecoins?

Or just I need like Pedro said, I just need to pay something for something. I need to pay with whatever I have. Like how do you see I mean, we all worked in several different countries, but how do you see the like the future of it? Like how do you actually do a steady case? Do you need actually go one step at a time, one case at a time, or is there like someday we're going to flip a switch and everyone's going to be adopting massively stablecoins?

Yeah, I I think starting with a very tangible use case is the most important part. I think the biggest challenge of crypto and stablecoins is the UX piece. So, if you don't have users who are familiar, it's hard to put a product in front of them with keys and all that complexity. So, there are many ways you can bring the operational efficiencies without complicating the UI. I think Nomad does a good job of that.

What in many cases we're powering stablecoin backed cards where users hold fiat and other assets, but there's stablecoin collateral behind those accounts. And that brings efficiencies around lower collateral because stablecoins can settle every single day, Saturday, Sunday, Carnaval, Christmas. So, I think that's the step one of having really tangible use cases and making the UI very user-friendly, even if you could use stablecoins in the background to bring efficiencies. That's really interesting. Uh do you agree with that, Peter?

Do you think do you have any like use case that actually Nomad is doing or willing to do in this term that uh Carlos just mentioned? Yeah, so so currently we are moving our liquidity. So, every time that a customer funds their USD account with Nomad, the liquidity movement that we are doing in the back, we're doing through stablecoins. So, we use this infrastructure to improve the liquidity management, to improve the ability in which our money arrives in the other end. So, there's a lot of benefits all over the chain that we can enhance the ability to, as I said, service our customers better, giving them the ability to have money when they need, where they need.

That's really interesting. And um Marcos, let's let's be honest here. The traditional banks, they have the credibility, they have the customers, they have all the list the regulators. They're kind of ready. They just don't have their rails, right?

Um do you think that the massive adoption of stablecoins pass necessarily across the banks or they're going to centralize it? Ooh, um That's a tough one. So, um what happens with stablecoin, right? Let let let's just think about this from a from a technology perspective, the efficiency. Again, you have different types of storing money and and you can move the actual asset on a domestic settlement, we're kind of resolved.

We have a very good clearing system in Brazil, fully functions, and in most countries is decent. The problem is the correspondence between multiple geographies. And if you want to have and then multiple use cases, right? Let's think about uh uh you want to fund business in Brazil and you are from another country and sending that money to Brazil to fund that business, the interest rate you're going to collect, the risk you're going to underwrite. I mean, all of this information is stored inside of a an institution and once adopting the stable technology, you're actually adopting a bunch of things as a a along with that, right?

Aside with that. So, the underwriting, the um well, the the the monitoring, everything becomes different. If I look at the banks today, they have the regulatory license to operate, they have the customers, they have definitely the distribution. Above all, they have the trust. What can I do with that trust in stablecoin?

So, I see that Nomad explained this to the traditional banks. A someone living outside Brazil really want to pay their bills in Brazil, I need to send money via Swift correspondent bank, pay 5 to 10% fees to get a terrible conversion, get the money in Brazil, and then I need to justify to whatever authorities, you know, where's this money coming from? A nightmare. Been living 20 years already outside Brazil, so I can give you a bunch of that. If I trust Itaú sponsors, I'm going to give them the benefit of the doubt.

And they create a stable in Europe backed in Europe. And I want to, you know, have highs in Brazil. The best deposit mechanism is to buy the Euro stable from Itaú. And having the liquidity between Euros and highs is something they clearly have a solution for. So, I think the entire money movement era is changing.

The banks did not understand they can be global for the first time with stable because they they don't understand it's actually the extension of deposits cross-border. And instead of having a license to do so, they can partner with their Crowns of this world and many other providers of this type of technology. So, or license in in regions. I think we have a very very nice infrastructure play coming. That's interesting.

Do you see Do you all see Latin America or emerging markets as strategically for this massive adoption of cross-border payments, stable coins, all this technology? I I think that the it's the most obvious one because when you think about the cross-border payments in emerging markets, they are much more inefficient than when you look into developed markets. So, whenever you trade dollars to Euros, Euros to pounds, you know, all of these big currencies, there's a lot of liquidity, tons of participants, you can hold pools anywhere you in the world. So, it's a more established market. When you think about the emerging markets, the challenges that, I don't know, a bank in Brazil or bank in Argentina or in Africa, South Africa, anywhere in Morocco to get a dollar account, to build this partnership, to build this infrastructure, it's much harder to have this liquidity pools.

Plus, when you think about the regulations, how can you hold those funds in in your country or outside your country? There's There's a lot of inefficiencies that are are embedded into the the emerging markets that can I'm not going to be there I'm not going to say that they're going to be fully solved, but there can be there's a lot of efficiencies that you can be solved with stable coins, with the use of stable coins, and with the use I mean, tokenized money in general. So, don't think about just stable coins. Eventually, CBDCs or any other collateralized tokenized money, because ultimately using a a chain where you don't need to have, you know, go to the US, go through the the whole process of opening an account in the US is very painful. It's very demanding.

There's a lot of requirements, regulation, all that stuff. You can open a USDC wallet, USDT wallet much as in a much simpler fashion, a much simpler structure that gives you like similarly the same the same experience that you would need for businesses, for consumers, if eventually for bigger institutions, uh there's a lot of benefits that can be generated by the massification of the stable coins. What do you think, Carlos? Same perspective? Yeah, I think so there's obviously countries that have more dollar demand than others.

So, think of a Bolivia, Argentina. That's a reason in itself to have some sort of demand for stable coin. But I I think in in Brazil and globally, too, there's just the challenge of when you're sending money abroad or even transacting in the US like tying this to what you were saying earlier. I have a friend from Brazil who I spent the weekend with and he was excited to pay all of my expenses because he wants me to wire him at the end of the of the trip so that he puts it in the one account that he can pay chat GPT and Netflix with and he works at Itaú. Uh I referred him to Nomad already so he'll be he'll be opening an account but that that shouldn't be that hard.

Managing your local payments versus a US merchant shouldn't be that that different or that challenging but today's reality it is. Shouldn't be that hard, right Marcos? Um you know ev- every one of us that been living abroad for so long time I mean face issues like this. I I you you um it's like it's an opportunity in Brazil. I actually think I would really extend this there's an opportunity in any country you're actively want to focus participate on.

Um you know with Nosis Pay we built operations in 40 countries in Tangem we're now in 140 countries. There are dynamics in every country. I mean we can talk about different problems in Africa, different problems in Asia. Um what is interesting is that nobody cracked the part of uh KYC and monitoring. You see wallets like us competing with the traditional banks for the same customer and we believe with technology we can you know have better distribution.

They believe uh because they understand the local market they're going to have better distribution. But at the end of the day the one that provides the very easy usage like I deposit I don't ask questions about the money because I'm able to trace the region of funds. I don't ask questions about who you are because you know with geolocation I know that you sleep in the address that you said that you live. Um so I think there's so much room for the parts that institutions tend to fail the most. They have not evolved for the past 60 years.

That in every country is massive. And I would just say that uh you know, it starts with the kick of this new asset infrastructure play. But it becomes afterwards, you know, um a kick in the back end. Everyone here that works in the back end, if you think AI is going to take your job, I don't believe so. I believe, you know, the blockchain rails is a way bigger threat.

Um, that that's that's what I would say. That's nice. Guys, unfortunately, we don't have more time. But if you guys could leave one final message to the audience, and if there's someone some point that you want that people here leave with, what is what would be? For for me and how how I believe that this new generation of financial financial technology or financial services will will come is that the adoption for it will make everyone lives much better, but it will bring also challenges for us working on it because there's a lot of things that we have established on it in our heads, in our works, in our work life that is it's complicated to to break.

Regulators will not follow the same speed that things will go, that the technology will go. And new opportunities will come with this. There's a lot of efficiencies to be still managed, and we can all take advantage, grow businesses, and develop new new solutions on top of it. So, the opportunities here are are are immense. Immense opportunities, to Yeah, two two quick ones.

One a quote that we really like at Rain is always on. Blockchain's always on. So, everything that requires banking hours to send money, do this or that, that will likely go away over time and I think everybody can lean into that. Um that's my serious thought. And then in a in a less serious thought, I think a World Cup year is the most interesting year to have people going to three different countries, spending money in three different countries, I think is a good stable coin and marketing opportunity for anyone who wants to do something World Cup related.

So, so I'll leave that out there and and see who who creates an interesting campaign. Marcos. Um you know, um I would say that my my main uh message would always be, you know, banks are the best positioned institutions to win this race. Um the back ends of banks are, you know, dead. 60 years without any evolution.

This needs to change. It costs too much. You can run global operations with less than 100 people, says Tether, says uh Telegram, says uh many many relevant players out there. Um and, you know, using players like Rain, in my view, is a very good way to kick in to this world. Um but it's not a technology play.

It's a culture and a process ops uh game. Treasury is completely new. And, you know, it's not about having an asset underlying asset called stable XYZ. It's actually about having the infrastructure to provide whatever underlying assets digitally, where you can have better yields, better service, faster moving uh money. So, I I think it's, you know, probably the probably I'm not saying anything new here, but hopefully uh reinforcing the message.

Kill your back end as quick as possible and you know, you will be better than anybody else. Great. Great stuff, guys. Thank you so much for your input. Thank you for your audience.

We're going to be here if you want to connect, network, ask questions. We are here all day, so thank you so much, guys.