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- [00:01]
Mark Rebe
When is the right time to sell a stock? How do you protect against inflation? Financial decisions can be tricky, and often your own cognitive and emotional biases can lead you astray. Financial Decoder, an original podcast from Charles Schwab, can help join host Mark Rebe as he offers practical solutions to help overcome the cognitive and emotional biases that may affect your investing decisions. Listen@schwab.com FinancialDecoder.
- [00:40]
Host
Join me in welcoming to the desk. Stellar Development Foundation Chief Business Officer Raja Chakravarti. Hey.
- [00:47]
Raja Chakravarti
Hi. How are you?
- [00:48]
Host
Nice to have you here. We're doing fantastic. How are you enjoying the event?
- [00:52]
Raja Chakravarti
It's amazing. There are so many impactful people here. I'm learning a lot, like, it is an awesome event. The weather could be better, but otherwise we're great.
- [01:00]
Host
Yeah, everyone's complaining about the weather, but we're having a good time.
- [01:03]
Interviewer
You didn't get a snow day today. I think. I think I could have gotten to school.
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Raja Chakravarti
Yeah. He should protest.
- [01:08]
Interviewer
You should. Yeah.
- [01:10]
Host
All right. We're talking about tokenization here. We're looking at it through a little. Through a bunch of different lenses, I guess, from your perspective, sitting at the Stellar Development Foundation. Why does this matter in the way that we're talking about it today?
- [01:23]
Raja Chakravarti
Yeah, I mean, I think tokenization is a lot more than just creating digital assets. We really take this idea that it's about creating efficiency, it's about creating greater accessibility. And ultimately, our premise is that sellers should be built for where blockchain meets the real world. And so when I think about tokenization, the types of projects we're really, really proud of are things like our partnerships with the United Nations. So the UNHCR used Stellar to distribute aid into Argentina, has used it to distribute aid into the Ukraine. And the idea was about tokenizing what would typically be cash donation. And through the adoption of those digital technologies, UNHCR has actually saved $12 million. I think similarly, when you think about accessibility, you're actually thinking about how people can get access to financial products that they otherwise wouldn't have been able to do. So take Franklin Templeton, for example. So they have their FOB XX money market fund. That's the tokenized money market fund represented by the Benji token. And when you think about a money market fund, it can typically cost like $3,000 plus to be able to enter into that. But through Benji, you can enter into it as little as $20. Coupled with that, on the Stellar Network, Franklin Templeton has done about 226,000 transactions at a cost of 104 XLM total. So if you think about that, that's like micro transactions of penny per per transaction. That is really impactful because it's creating broad scale accessibility. And so when I think about it from the idea of an investor side you have access to so much more but from a business side you also have so much efficiency. And that's where I think tokenization is tremendously powerful.
- [03:03]
Interviewer
So are you sort of so stellar sort of the last mile then, right? All this stuff gets built, built and then. But that last mile of road has to be paved efficiently, low cost to get to the actual end user. Is this where you're entering?
- [03:14]
Raja Chakravarti
Well that's an awesome question for me. I mean we are a network, we are a layer one blockchain and so we are the network upon which the transaction will flow. But our focus at seller has really been designed around this last mile solution. And so our focus has been the idea that look who is really going to benefit from a transaction. And we focus very much on, on payment, financing or pay fi. So cross border transactions, remittances, those sorts of things. We spent a lot of effort building out a network of 150 ramp partners plus and one of those ramp partners is MoneyGram. And MoneyGram has 450,000 physical locations. So we're accessible in 170 countries. With the ability for consumers to transact using the blockchain in a cryptocurrency but then be able to off ramp it in a number of different ways. They can either do it directly to their bank, they can do it through mobile money if that's the best case, or they can actually go to a physical location and cash out. And that is really the power of the stellar network. And to me that is where when you think about tokenization, it is really about how this whole blockchain can actually meet the real world and solve real problems for the people. It's out there.
- [04:25]
Host
In this scenario that you just explained to us, does the customer know that they're interacting with crypto?
- [04:31]
Raja Chakravarti
I mean I think the ideal scenario is that the customer never knows. I mean I think that's truly the future is that it is really just an infrastructure play, an infrastructure technology. I think if you are in Africa, one part of Africa, for example, you know, I think the idea that you can hold dollars in a digital US dollar backed digital currency like usdc, that is super powerful. I don't think they really care whether or not it is a cryptocurrency or not. It is just knowing that hey, I didn't have to go run out and buy dollars and get, you know, tagged on how much I can actually convert, but that it is actually a something that I can use in a digital manner and be able to transact on it. And so no, I think the answer is if you're doing it right, you're obfuscating that whole thing.
- [05:15]
Interviewer
When you think about what was announced this morning with the new chain happening and this kind of semi permission kind of hybrid model for, for serious financial instruments, collateral movement, storage of big storage of value compliance. Is this something that you're just eager to latch onto and then find users pave the last mile, have things move on bridge, I guess to Stellar and then get on to their final destination?
- [05:39]
Raja Chakravarti
Yeah, I mean look, when I think about, I try to think about it in relatively basic terms and so what do I think is really important in the future? I think the first is this idea of interoperability which was talked about today, but being able to have assets trans. Transact across different chains, very important if you're going to issue an asset. Two is regulatory clarity and we're not just talking about in the United States, but also in all the domiciles from which the cryptocurrency will move from place to place. But third, and I think this is really important and I think we sometimes ignore it. We say infrastructure but I mean like truly what is the infrastructure that can handle a enterprise level asset issuer on chain? And so one of the focuses we have, and I'm using this opportunity to talk a lot about Stellar, but we have in the history, our 10 year history for seller only had 16 minutes of downtime. So I come from a technology background. I translate that to a 99.9987% uptime, almost five nines of uptime. To me that is the level of infrastructure that you need to really be able to showcase the value here. Because that's what's going to get everybody truly comfortable with this sort of technology. And for me, I think I'm really excited about anyone who's coming into this space if it is going to make it better. And ultimately I think we as an industry owe it to ourselves and owe it to the people we're trying to help to make sure that we hold ourselves to these incredibly high standards because that's where we're going to make a lot of impact.
- [07:07]
Host
Is the infrastructure in your opinion up to. Is it ready for mainstream adoption?
- [07:15]
Raja Chakravarti
Well, I think that's a wonderful question. So I kind of put ourselves in this area today where we're kind of like in this pilot phase. So you see a lot of pilots, a lot of the institutional clients that are talking today. It's incredibly exciting, but it's really early on. What I'm hoping for, let's project three years out, is that a lot of those infrastructure answers, a lot of that stability has been resolved. Because the reality is it is new technology. And any time you see new technology adoption, there are going to be some of those trials and tribulations. But ultimately, I think learning from those who have been there, who have actually solved some of those really critical problems, and notwithstanding the idea of last mile, like, what is it we're actually trying to solve, the technology is great, but the technology is only there if it actually helps us get from point A to point B and, and really make those two things happen. I think that's what really has to happen. So today, not yet, but my hope is that with innovations that we are seeing around here and that what we are working on at seller, that it will truly be there.
- [08:13]
Interviewer
Take that question and maybe zoom in on interoperability because that, I mean, that's critical, right? For what we're hearing about today, what you're describing, that feels like the biggest blockade, doesn't it?
- [08:23]
Raja Chakravarti
I think interoperability is such an important thing. I kind of liken it to, you know, if you're going to go ahead and try to issue one place, you really just want to think about that thing being utilized by the end consumer or business that wants to use it. But the hurdles that we put almost in front of ourselves is this idea that, hey, I have to build to every single technology layer. And boy, is that a hurdle because it means a lot of engineering resources. It means that you are focusing on understanding the way different technology flows are. I'm not a technologist, I'm not a coder, but I'll tell you, like, being able to understand all of the different programming languages, that creates a lot of friction. Having interoperability is the key to being able to build that. I actually think about USDC as an asset. And so one way to think about USDC is that it is the stablecoin that can be used to transmit from point A to point B. Okay, so you're on a network. I've got uscc. I want to send it to my family in Argentina. I can go ahead and leverage the SATA network to do that. The second idea of it can be that IT in and of itself is this bridge layer between multiple networks because it is utilized across different ones. And so really, what do I care about as a consumer? I just care that the funds get to my family in Argentina. I. I care very little about what blockchain they're using or who else is using it. I just want to make sure that it can transact and that you're not losing any value between those two areas. The last piece of this, though, I think, is the efficiency play. And again, we've talked a lot about efficiency throughout this conference, and I'm sure you guys talk about it all the time, but Instant transaction settlements, 24. 7 availability, full time liquidity, like, those are the value adds that you have here. And that's why you need to have interoperability. Because if you didn't have interoperability, well, why even have these blockchains? You just use traditional financial systems.
- [10:20]
Interviewer
Right, right. No, that's fantastic. I mean, I'm just thinking how hard it is for me to send a text message to somebody on an Android phone thinking, like, we should be able to solve Android. Yeah. No, no, no, I don't. That's all. We're taking over Green bubble friends. So who do so. No, but that's. It's fantastic. And I think through this conversation, folks get a much better sense of how Stellar can attach to this, what we're announcing today, and how it reaches a bunch of different people.
- [10:45]
Raja Chakravarti
Absolutely.
- [10:46]
Host
Raja, thanks so much for joining us at the desk.
- [10:49]
Raja Chakravarti
Yes, absolutely.
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Host
And we hope you enjoy the rest of the event.
- [10:51]
Raja Chakravarti
Thank you so much. It was great.
- [10:52]
Host
Awesome. That was Stellar Development Foundation Chief Business Officer Raja Chakravorti.