Ep 33 - May 7, 2025 - Mastercard powering stablecoin transactions
Welcome to another episode of the weekly crypto check-in recorded on May 2025. I'm your host, Robert Sworthout, and joined by my cohost, Andres Sindate. How's it going, Andres?
Andres Sandate:Hey, Robert. It's good. It's good to see you. Rainy Wednesday here in Atlanta, but, I know we haven't recorded in a couple weeks, so looking forward to, breaking down some topics. Nothing too earth shattering happened in the last few weeks, but, nevertheless, just the machine grinds on.
Robert Swarthout:Yeah. We, you know, for a while we were talking recording weekly and, trying to figure out how to narrow down what we would talk about. And now we're at least the last couple times been on a two week, cadence and trying to find stuff to talk about at some level. So it's been a, I guess, bit of a reprieve. Obviously, the last month or so has been tariffs, tariffs, tariffs.
Robert Swarthout:But Yeah. Crypto market still is moving on, so we'll kinda jump in here. This first one I love just for the simple reason that it is showing that retail will be using or could be using crypto, but it's behind the scenes. It's more of the plumbing, and it and it's added in a benefit or a cost efficiency. So Mastercard basically came out with this platform where they're empowering merchants to receive stablecoins as
Andres Sandate:part of
Robert Swarthout:the transaction, whether the whether the retail client is using dollars or stablecoins, it doesn't matter. It can end up in stablecoins if they would like as the merchant. So trying to reinvent a little bit of how it might work. I think this really is more impactful outside The US than it is inside The US, but it's Mastercard has been at it for, goodness, I think a couple years. I've been slowly hearing them release stuff, and it's cool to kinda see it launch.
Andres Sandate:Yeah, I did a little bit of digging here, and it looks like it's going to be initially tested in Australia with a local fintech group called Stables using the Ethereum blockchain. And I think from the standpoint of like strategically, it's, you know, it's a big organization, a big company, in this case, Mastercard is sort of like laying out its intention to build on, you know, the build the rails between like TradFi and, you know, more blockchain native assets. So I think that's a really strategically like a really big takeaway here. You know, the merchant adoption, like merchant transaction processing business, ironically, like sitting here in Atlanta is is huge, right? Like all the infrastructure in Atlanta to support the payments processing business is a significant like fintech employer here.
Andres Sandate:A lot of big entrepreneurship wins have happened here in that business. And obviously a lot of big companies with First Data and Global Payments and others exist right here in our backyard. So it's kind of a for those that are in the payments world and the payments ecosystem, you know, they're probably paying attention to this. Don't know if they're popping champagne, but it's a but this is another, you know, signal. Right?
Andres Sandate:An important signal, I think, if you're watching what's happening in the crypto digital assets blockchain world.
Robert Swarthout:Mhmm. Yeah. And it's, you know, it's a simple building block at some level. Right? But it takes those kind of fundamental early ones to allow more complex systems to do more exotic things to come later.
Andres Sandate:Well, yeah. And it'll it it it kinda opens the the door for sort of three huge, huge areas where blockchain technology has the potential to be highly disruptive and obviously save consumers a lot of money and merchants potentially, right? So one area is remittances in terms of if this works, like you've got people still sending money, you know, expensive, clunky, slow ways where there's lots of money tied up in SWIFT. You've got, you know, obviously that's one another big area is just, you know, the whole idea of cross border payments that you talked about tariffs. And then just overall, just think about the emerging markets where the infrastructure is very, very nascent and frontier markets where the infrastructure that we take for granted every day in terms of payments is largely not there.
Andres Sandate:So this could allow those economies to really play catch up in a much quicker way.
Robert Swarthout:Right. And you know, it'll be interesting to see evolve over time with this is, you know, if it's a traditional credit card or debit card transaction, it's not really economical to run one for less than a dollar. Yeah. It's just so much of it goes away in fees that can start to change with a a stable coin based system. And again, it's it's all how much margin in this case Mastercard wants to give up because it's Mastercard and Visa that are a huge portion of those fees traditionally.
Andres Sandate:Yeah. Well, I think one other big takeaway too is that the infrastructure and compliance surrounding all this transaction activity is now becoming what you know, what we would call investable, right? So if I'm a if I'm a venture firm or I'm an investor in a venture firm and, you know, one of the thesis is, you know, payment or payment processing or infrastructure, You know, the fact that these are examples now case studies really of areas where it's an investable thesis. Okay, they're really companies going to do in this. So I think it's pretty cool.
Andres Sandate:It's an easy headline that the masses of crypto investors don't pay attention to because they get caught up in, you know, the latest meme coins or the latest, you know, hype and news on on on X. But this is the type of stuff that's actually going to move the the industry forward. We look back and you add enough of these up, and the amount of time it's taken to sort of put these types of even trials or, you know, this state, a pilot program together is like, there's there's tons of engineering and compliance and legal and stuff going on. And that's, that's where really the breakthrough and promise, I think of this whole thing gets super fascinating.
Robert Swarthout:Yeah. Well, I'm sure we'll probably get to talk about this one more in the future. And, you know, Mastercard is big, but Visa. What's Visa doing? And I think the future is going see.
Robert Swarthout:So I'm sure we'll get to hear about that probably in the next six months because they can't be too far behind. So moving on here, our next topic is more of a quick topic, but it's BlackRock is using the blockchain to track fund ownership of a money market fund. It's a hundred and $50,000,000,000 money market fund, but to kind of, you know, this this is BlackRock slowly creeping into crypto in ways that are less financially focused and more using the technology in interesting ways. So yeah, yeah.
Andres Sandate:Well, my big thing here around this strategically is right. This is this is obviously, know, dollars 150,000,000,000 money market fund. So a lot of people listening may say, what what is this? You know, what's the meaning? How does this impact me?
Andres Sandate:Like money market funds massive, like in the in the traditional finance space because it's where a lot of governments and sovereign wealth funds and, huge institutions like corporate pension plans, etcetera, like they park assets in these money market funds for short term safekeeping, if you will. So these money market funds are massive, but what they are is they are sort of the plain vanilla TradFi funds that are out there. There are some of the biggest, right, if not the biggest pools of So these money market funds are vital for the functioning of just corporate treasury and the functioning of like daily commerce. This to me is a huge green shoot, probably more so like a plant coming up or even a bush out of the ground. That is the beginning of what you and I've talked about on the show is, is the tokenization of real world assets, right?
Andres Sandate:So if you can do this in money market funds and it works, why couldn't you do it in other real world assets like real estate or private funds or, you know, treasuries or other asset classes? So I think, you know, this is big. It's kind of a validation that tokenized assets is not theory. It's, you it's real. So it's getting integrated, right?
Andres Sandate:One of the biggest asset managers out there is doing it. So to me, it's, you know, again, easy to gloss over, but important to stop and sort of read the headline and understand what's going on.
Robert Swarthout:Yeah, in the part here that I wasn't able to figure out or find details on is, are they running this with alongside in parallel to a traditional system that tracks ownership? Or is this purely like they bought in, and they are using the blockchain to track
Andres Sandate:the ownership? You know, I'm guessing that they're they're mirroring.
Robert Swarthout:Yes. Would guess they're mirroring. Maybe Yeah. Surely regulations don't allow it to be the only thing right now. Yeah.
Robert Swarthout:But soon enough, I would imagine in a short number of years, if not sooner, you'd be able to only have a blockchain based system do this.
Andres Sandate:So Well, yeah. And it's it's obviously gonna provide transparency, you know, around, you know, traceability, audibility, settlement time should improve dramatically. So yeah, there's a lot of real, real world stuff that, you know, we'll cover in future shows. Pretty interesting. Good headlines, Robert.
Andres Sandate:You thought this was gonna be a boring show.
Robert Swarthout:Well, we can try harder to make it boring. Yeah. Moving on to our third topic here is a on the topic of regulation, actually. So the stable point bill, the genius act and the stable acts have moved through. They've done all the reconciliation with within the different department.
Robert Swarthout:This mean that department's in the committees, and now it's moving along. And the reason why there's a question mark here for those that can't see it is, there was a group, I believe, or nine democrat senators, if I'm not mistaken, wrote a letter saying, oh, wait. We're not in support of this after we said we're in support of it. So we are now in the middle of politics, and we just hope to be able to work through this. It sounds like the Republicans are gonna push forward.
Robert Swarthout:I don't know if if it actually you know, Trump wants this by August. So, like, there's a little bit of room here to play around and play these games, but probably not tons of leeway. And just like to see it get it over with. There's even, like, the opposite rumor that, oh, they would be in support of it if it also included the the market structure for the rest of crypto. So like you go from just a stable coin bill to a to use Trump terms, one big beautiful bill for crypto, and all of sudden you have it.
Robert Swarthout:I I don't know where this lands. My guess is it just ends up being stable coin, but we might have a roadblock here.
Andres Sandate:So well, I did a little digging. And so there's sort of three points that are holding things up. It looks like at least at this point, right? This is politics and the sausage is still being curated and will get made. So number one is, you know, companies like Paxos and Circle, will they be, you know, state chartered trust companies and can they issue stablecoins, you know, and if you're going to be a state, you know, charter trust company, you have to be under federal oversight.
Andres Sandate:So the question is, should those types of entities Paxos and Circle are not household names, right? And so not familiar. And therefore, you know, the question of should they be licensed or should they be under some type of federal oversight? Question number one. Two is, you know, and this goes back to sort of what we talked about with Mika is what constitutes and how do you audit the contents of the statement and the basket that comprises the stablecoin?
Andres Sandate:Right. So you things like TBT bills and cash and repo agreements. And so all of the, you know, definitional things around reserves, but potentially and, you know, you I don't know the names of the of the folks in Congress that are holding this up, but it kind of comes back to things like enforcement of, you know, risk controls and like the systemic that come into play and obviously consumers, right? And so the you know, the senators, you know, Loomis and Gillibrand, they're pushing for bipartisan support here. You have Rod Brown, who's kind of saying, hold on, let's slow things down.
Andres Sandate:We don't know if we want to legitimize these non bank stablecoin issuers like Paxos and Circle. So I think there's some fundamental questions around this. You know, again, you go all the way back to the election and, you know, it's easy to point to, man, we were just going to sail through in the first one hundred days. We're going to have all this new and there has been a lot of development. But reality is, is that, you know, even just with this initial bill, the question is, do you do you just take what you can get?
Robert Swarthout:Mhmm.
Andres Sandate:Or do you try to go for the whole, you know, go go the whole go the whole way? And it was Cinco de Mayo this week. So did you go for the whole enchilada and try to get this thing done all at once?
Robert Swarthout:Yeah. I you know? I don't know. I would take just a stable coin bill at this point because I think it would just Yeah.
Andres Sandate:You just want the chips and salsa.
Robert Swarthout:Time kills deals. Right? And, like, the longer this thing stays out there, it it could die. Yeah. Yeah.
Robert Swarthout:Yeah. What what we did make into this news, and you kinda hinted at it, is, you know, so you have PAXS, you have Circle. You know, Ripple even has their own stablecoin, and that's chartered out of New York. And that one, believe, has the most stringent, I guess, controls around it compared to the other two. But Tether, obviously, for The US, the biggest stablecoin anywhere in the world, their Tether USDT likely is not, according to these bills, not gonna be US compliant, Much like it is not MICA compliant.
Robert Swarthout:So there's a rumor or speculation that Tether is launching an additional stablecoin just for The US market. So we have fragmented liquidity. In this whole time, everyone's been like, oh, they need to clean it up and they need to, like, prove the reserves. They've had so many opportunities like this being one of them to say, oh, no. No.
Robert Swarthout:No. We are doing it the way we should. But no. They they just keep like, it's a diversion. Like, oh, we're gonna launch another one that that one won't be, but that does that say the current one is not?
Robert Swarthout:It's just it's crazy.
Andres Sandate:So Well, and I think it's always important for us, right, sitting here talking about this stuff to lose the audience because at the end of the day, the whole reason we're doing the show is to help provide sort of a series of what we think are sort of newsworthy crypto new updates. Take the news that can get very down the rabbit hole and be full of like really technical jargon and simplify it for people that are wanting to follow the space. I think what I would say for this one and the first two, right, is we have to get some of these proof points like the Mastercard example and the BlackRock example with the money market. And then now we've got to get legislation to really see more broad, full scale adoption and use of crypto and digital assets in our, you know, in our economy effectively and in the rails of our economy at scale. And so to me, that's what the takeaways are for these first three.
Andres Sandate:And if we can't get the stablecoin bill passed, we're not going to see further adoption and therefore we won't get the quote unquote unlock and promise of the this new asset class to me. You know, it'll just meddle along.
Robert Swarthout:Absolutely. Well, this will likely be our last topic today about no, actually, second, the last topic today about stablecoins. But this next topic is Ripple buying Circle. There there's speculation out in the market that they made an offer of 5 to $7,000,000,000 for takeover of Circle. Circle is in the IPO process right now.
Robert Swarthout:Ripple, obviously, is has a smaller market share stable coin that is less than a year old at this point. This would dramatically accelerate ripples entrance into the stable coin market. And then there's a rip assuming Circle turned down that 7 or 5 to $7,000,000,000 offer. And then the next rumor was that Ripple offered 20,000,000,000. That's a huge jump that seems kinda crazy, but we will see.
Robert Swarthout:It it does seem like there is a little bit of, fire smoke here. Because even David Schwartz, the CTO of Ripple, kind of like he likes to stoke the fire a little bit on Twitter, and, he was commenting on people that were speculating about price. So Yeah. There's something here. What it turns out to be, I guess, we'll have to see.
Andres Sandate:Yeah. This is an interesting one because if you look at XRP and Ripple, like, they have the banking relationships. The the the likes of Circle have these strategic partnerships, like, with the groups like BlackRock we've talked about, and and Visa, we mentioned, you know, their big competitor Mastercard. So, you know, like one has the banking relationships and has gone down that path and has a lot more, I would say, traction internationally and globally in that. That's that's Ripple XRP.
Andres Sandate:Circle has some really powerful corporate partnerships and has actually gotten some some very solid traction and in terms of just market share. So the interest interest would be like, is there a way for Ripple XRP to sort of capture the momentum from Circle, you know, as it sort of marches towards what seems like it could be you know, I don't predict, but, like, could it be a a an initial public offering or a go public for Ripple at some point? Yeah.
Robert Swarthout:That that that'll be interesting to see how that part plays out. I mean, just last month, Ripple bought Hidden Road for $1,250,000,000.
Andres Sandate:Right.
Robert Swarthout:Now they're looking at this this next month. There's a lot of money in that bank account to be to pull these kind of things off. And, you know, if they could just immediately slip in USDC as the stablecoin that they plan to do all settlement with on the on the back end of hidden road for those transactions, that would be pretty incredible. So Yeah. Yeah.
Robert Swarthout:Well, in the next couple weeks, we'll have more to talk about here, but it's a lot of speculation right now.
Andres Sandate:Well, in USDT, right? USDT as in Tango. Yeah. Yeah. Tether has, you know, leading market share.
Andres Sandate:This could potentially catapult USDC into right sort of meaningful contention. I said I was mistaken. I said Ripple XRP had more international influence and they have some, but I think circle actually and in terms of international partnerships, probably actually is is pretty competitive. So for me, like this whole stablecoin space, I don't know how much retail individual investors and crypto really even understand it. I don't I don't know how well the average Joe and and Mary understands stablecoins and, like, what what's the value?
Andres Sandate:Like, if I now am starting to get Bitcoin
Robert Swarthout:Mhmm.
Andres Sandate:Now you're introduced to stablecoins.
Robert Swarthout:I I I think for the average consumer in The US, think it's important to emphasize The US, it doesn't matter. You're you're likely going on Coinbase or whatever you're doing. You're if you're doing any trading, you're settling into dollars. You're not settling into stablecoin. If you're doing international, then maybe it's different.
Robert Swarthout:But here at home, it's it's none the same. And, you know, especially if you're using ETFs to do your crypto these days, you're not touching stablecoins at all. Right. Right.
Andres Sandate:But when you start talking about global payments and international commerce, and a lot of the things we talked about earlier, it's different ballgame.
Robert Swarthout:And 100%. Yep.
Andres Sandate:Yeah.
Robert Swarthout:Cool. Well, moving on here. The Arizona governor, she vetoed a Bitcoin reserve bill that that was brought to her that had obviously passed their house and senate. And let me make sure I get this quote right. She This is
Andres Sandate:Katie Hobbs, governor Katie Hobbs of Arizona.
Robert Swarthout:Yeah. She she goes, it's an untested investment. That was her quote. Obviously, the Bitcoin crowd did not like this react, this this moment, but it was just like I was surprised to see a governor step in the way. Like, you you would think think that this would be something that'd be a little bit bipartisan, but apparently, she's got some opinions about this one.
Andres Sandate:Yeah. I mean, you know, she's citing lack of lack of clarity and sort of volatility, but, you know, also falling in line with some of the governors and some of these other states. Right? Texas, Wyoming, Missouri also had initiatives that had advanced somewhat through their legislative process and only to find, you know, sort of they were they were DOA. Right now, it feels like crypto and its ability to sort of penetrate, you know, another really big area is just public finance.
Andres Sandate:Right? If you think about state treasuries, not the case with corporate, which we may talk about as extra credit today, was something I was watching in '25 was the number of companies that started to own Bitcoin. We talked about that in our letter just in their corporate treasury, but it feels like in public finance, there's just I don't know if it's headline risk or uncertainty or blowback or or what, but it just seems like on the public finance side, a lot of these what seemed like what were real aspirational objectives around treasury reserves and crypto reserves early in the year have have somewhat fizzled.
Robert Swarthout:Yeah. I I think there was so much optimism. Then we started April, and then we all know how April went with the topic of tariffs. So it's a lot of distractions right now.
Andres Sandate:A lot of distractions. Yeah.
Robert Swarthout:So maybe that's a good segue here. So on the topic of distractions or possible distractions, how much evangelism is too much? And this is more framed around just what I'm seeing on Twitter around the Bitcoin community. And I'm not picking on them. I I should say that upfront.
Robert Swarthout:Michael Saylor in particular is rubbing me the wrong way. I'll say that also just kinda throw that out upfront. So everyone's generating images with AI these days. There's this picture. He's posted a couple different ones, but this one in particular, he looks like he's trying to frame himself as Jesus a little bit, maybe a disciple of sorts.
Robert Swarthout:And he's he he captioned it, teach a man to Bitcoin instead of teach a man to fish. There's a basket of ready he's holding with a fish. Like, I I just don't know if I want to follow along with this. Like, it it Yeah. It it it's crossing a boundary to me.
Robert Swarthout:I get that everyone's got different boundaries. But it's just like, man, like if people don't wanna buy Bitcoin, you don't this image is not gonna convince them to do it. Yeah.
Andres Sandate:So Yeah. Well, we've talked about this on the show, but I think it's it's always, you know, worth repeating, right? So you helped bring me along to this idea of, you know, there's the Bitcoin Maxi crowd, the Bitcoin evangelist crowd who they would prefer a future where it was Bitcoin only. Correct. And everything else goes away because nothing else has any utility, no benefit, etc.
Andres Sandate:So that's the maximalist evangelist crowd. And then on the other side, have, you know, folks that are, you know, focused on stablecoins and tokenization and, you know, other real world use cases. You know, sometimes things that go a little haywire, like Web three and all that and and and, you know, the the the silly tokens that get issued. Right? So it's but there's legitimate purposes on on that camp of things like DeFi and other uses.
Andres Sandate:So it just seems like he wants there to be this or he is creating this gulf between the two where you've got on the one hand, you know, the the maximalist and the and the Bitcoin only purists. And on the other side, like people who are like, yeah, I might own some Bitcoin and there might be some in my portfolio, but there's all this other stuff going on.
Robert Swarthout:There's a lot more out there than
Andres Sandate:they just I can only like it's only like I can only have Coca Cola is that is that what you're saying? Or I can only have Gatorade or I can only have water. You know what about you know so it's it's it's interesting to yeah
Robert Swarthout:to look at it. He's been a bitcoin bull for a while, right? Like, it's not like he's recently changed, but he has turned it up to 11 the last couple months when it comes to this. Well, part
Andres Sandate:of their strategy now, Like you have to be an evangelist. Literally on 200,000 bitcoin, it's a business strategy. Yeah.
Robert Swarthout:Yeah. So anyways, we don't really have any answers here. I just kind of bringing it up because I was just pondering it the other day.
Andres Sandate:I think micro strategy is something that's owned in a lot of these vehicles and funds and strategies that you see put out by digital asset management firms where they say, Oh, you get a proxy on the whole space by just owning, you know, public companies. And micro strategy is often one of the holdings right as a proxy, if you will, of the broader space. But to me, I just don't hear them talking about things like utility and because they're not like diversification and all that. And yes, they're not. That's the bottom line, you know?
Robert Swarthout:Yeah, it's like. Yeah. And, you know, obviously, the strategy slash Michael Saylor, they continue to buy Bitcoin. I'm looking for the number again that they're gonna issue. Oh, yeah.
Robert Swarthout:They're gonna offer up another 84,000,000,000 in preferred stock to raise funds to accumulate more Bitcoin. I like he's basically trying to raise 84% of the company's current market cap. Again, I don't see how this ends well for micro strategy holders or potentially part of the crypto market for that matter. So
Andres Sandate:hopefully, well, yeah, I mean, know, you're going to hear about people that go all in. They did it, you know, leading up to the GFC, you know, in housing, they own 20 houses and have any income. You saw it in the .com mania when people loaded up on, you know, all the dotcoms lost everything. You saw people rode the stock market, put all their retirement assets in the company's stock. I mean, you see this.
Andres Sandate:I meet these people and you're saying like, have you not ever heard of diversification or are you, you know, at all concerned like about like permanent impairment of capital, etc. But it's yeah, you know, when those folks are on the train and they feel like they're they've got a group of supporters around them, and it's not really anything anybody can say, they're just gonna keep going. Yeah. A %.
Robert Swarthout:So our last topic is admittedly a bit of a geeky topic here, but so the European Central Bank has selected quant the company to use their technology, which is also quant the token. It's a little confusing there to power the digital Euro. So the ECB is gonna launch a CBDC. That's what this is. They're not using that terminology here, but there's no doubt that's what this is.
Robert Swarthout:It will be interesting to see The US, at least under the Trump administration, apparently does not have any interest in maybe rightfully so to launch a CBDC. So you're gonna see Europe being very different than The US. But this allows the Euro to be programmable. Right? You can write it in software much like a stablecoin will act.
Robert Swarthout:So this might be, I guess, a good equivalent in The US. But again, not issued by a central bank. But yeah, it was a big deal. They've been doing this pilot for two, three years maybe. And it finally got announced and flew underneath the radar.
Robert Swarthout:This is an example of utility. It's admittedly it's butting. It's barely sticking its head through the dirt right now. But it's getting going.
Andres Sandate:Well, there's a few other big companies that are also doing, you know, CBDC pilots, One called China. You know, Brazil, you know, another major, you know, you know, big, big, huge, you know, population. Yeah. One of the smaller countries, right? Singapore, not a super big surprise there, but I think it's yeah, it's utility.
Andres Sandate:And it's also just another, again, validation of real world. The real world moving, you know, from sort of like theory into deployment. And whether it's stablecoins or it's enterprise adoption or block, you know, blockchain development, all three, this is something, you know, when you combine it with some of those first headlines in today's update, I mean, it's all part of this broader narrative. These, you know, new asset classes don't come along very often. And so we have one here.
Andres Sandate:And it's kind of like you said about the Internet back in the mid late 90s, it was getting born. It was born, you know, back in a research lab, but it was all the stuff that was supplied and built as as the technology, you know, found new applications. That is what, you know, consumers ended up, you know, being able to sort of then transact in. So I think we're just headed. I feel like we're just headed towards that same sort of path.
Robert Swarthout:Absolutely. I would agree. So I think that'll do it for today. So thanks for joining us on this episode of weekly crypto check-in. To stay updated on future episodes, you can find us any podcast by searching T Time Crypto Capital or the weekly crypto check-in.
Robert Swarthout:Take care.
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