World Startup Cities podcast: How stablecoins drive monetary providers innovation

Victor Swezey 0:04
Hiya, and welcome to a particular version of The Buzz, a Financial institution Automation Information podcast. Immediately is July 18, 2023. My identify is Victor Swezey, and I’m the editorial intern at Financial institution Automation Information. Immediately, we’re embarking on our World Startup Cities collection, taking you to among the most revolutionary tech hubs world wide to offer you a have a look at these startup cultures and the markets they serve. Alongside the best way, we’ll be speaking to fintech founders from new cities concerning the merchandise they’re bringing to market. First up, we’re visiting Buenos Aires, Argentina, a metropolis identified for its world class delicacies, stunning structure, passionate soccer followers and a lot extra. It’s additionally dwelling to among the most fun startups in Latin America and was the birthplace of Mercado Libre, Latin America’s main on-line market. Becoming a member of me as we speak are the founders of Num Finance, a startup utilizing stablecoins to assist companies throughout the area scale their operations. Please welcome CEO Agustin Liserra and CGO Mariano di Pietrantonio.Agustin Liserra 1:11
Thanks, Victor. From my aspect, properly, I’m Agustin CEO of the of the corporate. Simply as promoting a fast introduction, from my aspect, I’ve a background in in each engineering and finance, a grasp’s diploma in quantitative finance. After which over the course of my my profession, I gained in depth expertise in finance and danger administration. I labored as monetary publicity administration supervisor at YPF. That’s the the most important oil and fuel firm in Argentina. And since 2016, my curiosity was captured by the crypto and blockchain world. And I turned extremely obsessed with this this world. So I joined Bitex, one of many first cryptocurrency exchanges in Latin America. After which in 2020, I made the transfer to Buenbit because the CFO of the corporate for 2 years and a half.

Mariano Di Pietrantonio 2:19
My identify is Mariano, as I mentioned, and I’ve greater than 15 years of expertise as a product supervisor in gaming and biotech. And my record was seven years working for MakerDAO. Maker DAO for many who don’t know, is the most important protocol within the Ethereum blockchain with greater than 10 billion in whole worth locked in in belongings. I labored there as head of development for 4 years methods, communications and partnership.

Victor Swezey 2:55
Thanks. So I suppose, you understand, to start, I simply needed to ask, you understand, why did you discovered Num Finance, you understand, when did that occur? And what downside have been you hoping to unravel?

Mariano Di Pietrantonio 3:09
Yeah, properly, that’s a query that I at all times wish to reply, proper. It’s and we based Num for for 2 essential causes. Proper. Firstly, all through our expertise in fintechs, and startup, we establish that one of many greatest ache factors in regional within the area is the money administration, proper. And the method of shifting cash typically creates bottlenecks, proper, we one thing in increased costs for patrons, and that is whatever the trade, proper? And secondly, we noticed the rising adoption of blockchain expertise within the area. After the popularization of a regional greenback, sorry, sorry, further greenback again steady cash, we all know that many individuals have been integrating these stablecoins into their lives proper, however not exactly for funds, however for financial savings, proper. And for us, this indicated that there was an understanding of stablecoins as a sort of asset, proper. This is among the details and mixing these two parts, proper, the understanding of this kind of a crypto belongings and understanding additionally that cell cash initially is fairly troublesome, proper? Combining these two we’re we realized that it was potential to create the unique borderless and actual time cash administration system utilizing native stablecoins, proper. And the cool factor about this and that is many of the discuss at the moment that now we have with Agustin is that we needed to have an infrastructure the place settlements within the area will be accomplished virtually immediately, proper? And that is how Num Finance got here to life.

Victor Swezey 5:04
And so are you able to simply remind our listeners shortly what a stablecoin is, you understand, how does it match into the entire crypto ecosystem? And you understand, how does it match into your corporation mannequin?

Agustin Liserra 5:16
Yeah, positive. Nicely, stablecoins are mainly blockchain-based tokens, representations of different belongings, whose worth is tied to an exterior asset, similar to nationwide currencies or treasured metals or different commodities, for instance. These digital belongings serves as representations of conventional currencies just like the US {dollars}, the euro, Argentine pesos, or different commodities like gold, for instance. So, primarily, stablecoins are collateralized merchandise that may be purchased or offered throughout the cryptocurrency market ideally to ship and obtain cash and for the creation of actual monetary merchandise. One essential factor right here is that there are stablecoins within the within the ecosystem that aren’t collateralized. In our case, we we’re going for the collateralized aspect of stablecoins and never algorithmic stablecoins which are like a distinct a very totally different chapter.

Victor Swezey 6:30
So, are you able to stroll me via like a selected banking-related use case?

Agustin Liserra 6:35
Stablecoins play a vital function in in banking use circumstances, particularly in rising markets. Right here in Latin America, for instance, they provide a number of advantages that assist individuals on this area. First, stablecoins improve accessibility, permitting people with out conventional financial institution accounts to take part in monetary transactions and providers. One one case, I’d say that’s residing inertia Argentina is one large trade that’s providing a funds via a pay as you go card in Argentina the identical as Ripio and Let’sBit which are our essential companions. Second, stablecoins promote monetary inclusion by bridging the hole between the unbanked and the formal monetary system enabling financial savings funds and entry to credit score and lending providers. And on this instance, for I used to be I used to be mentioning in a single bit, it’s potential to transform your pay as you go card right into a bank card by taking a mortgage and doing like a purchase now pay later course of as you need with the amount and installments that you simply desire for to your your money flows and and your choices mainly, then a stablecoins present a sooner and far more economical and safe different for cross border remittances. I’d say that it’s the the primary and the primary use case of crypto normally, however with Bitcoin, it was like a nightmare to to do remittances hedging the publicity of the Bitcoin volatility. So stablecoins are actually a use for helpful for these sorts of providers. And eventually, stablecoins drive monetary providers innovation, facilitating the event of decentralized finance purposes that broaden entry to monetary services in normally. We’re seeing a number of new use circumstances being developed, however by our companions, our purchasers, the retail section. So for us is basically, actually essential to construct infrastructure to permit innovation.

Mariano Di Pietrantonio 9:21
Yeah, one one cool factor that I wish to add to that’s that we’re right here to assist the banking infrastructure that’s already place proper? We all know that banking infrastructure typically appears to maneuver very gradual, proper? And there are corporations that take that chance to offer different providers what we wish you to listen to is to kinda marry these two issues proper just like the banking infra with the crypto in reality proper and Num Finance is doing precisely that. Proper. We’re protecting that that hole. So individuals in On this area can have the providers that they want, proper? Simply do not forget that rising markets are some of the underserved markets by way of monetary providers.

Victor Swezey 10:11
And I used to be questioning if we might zoom out a bit bit. And possibly in case you might inform me a bit bit about what the startup scene seems like in Buenos Aires, you understand, what’s the what’s the funding ecosystem like? What’s the startup tradition like? And the way do you suppose that that is perhaps related to, you understand, the historical past and identification of the town normally?

Mariano Di Pietrantonio 10:27
Yeah, yeah, that’s, that’s a cool query. The startup scene in Buenos Aires is basically vibrant and is rising like quickly, proper? The town has develop into a hub for entrepreneurship and innovation, attracting a various vary of startups throughout properly, varied industries. And the startup is seen in Buenos Aires significantly may be very robust in expertise and fintech sectors, proper. Many ministers are centered on creating cell software program, cell purposes, e-commerce platform and different disruptive monetary applied sciences. And we’re additionally seeing this, like actually cool, vital development in sectors like for instance, well being, training, agro, there’s like a bunch of various verticals through which we’re seeing a extremely cool development. And I imagine that the I imply, there are numerous circumstances of that, why is going on. However general what I see, it’s like once I say this turning into one of many essential spots for the digital nomads, proper, to their price of residing, and, and the connection of the price and the standard of life that you’ve, proper? As a result of though it’s actually low-cost for foreigners in Argentina, you continue to can have a reasonably excessive, top quality life-style right here, proper? I’ve many pals from from overseas, they usually at all times inform me the identical factor by this concerning the meals, how the meals tradition right here, it’s superior. It’s a it’s a safe metropolis, proper? It’s fairly secure cities, proper? It’s a reasonably secure metropolis. And you will get additionally to journey so much contained in the nation. And since now we have a fairly large nation with many alternative climates, and really totally different, you understand, issues to go to. So yeah, I imagine that these components performs a vital function to have these sources to get extra individuals working right here, and in addition to create startups.

Victor Swezey 12:31
And simply extra typically, how would you say that the startup tradition in Buenos itis in Argentina and you understand, possibly even in Latin America extra broadly, compares to the US? And what you understand, what are you? What are some similarities you see? You understand, what are some ways in which you see this startup ecosystem that’s actually been, you understand, rising not too long ago, how do you see it differing from what now we have in the US?

Agustin Liserra 12:56
Sure, properly, I’d say that I might outline the ecosystem right here in Latin America, by by in direction of and I’d say that this was utilized to each single entrepreneur within the US and in Latin America, however I contemplate that resilience and resourcefulness are the large key factors in, in Latin America. And mainly, startups in Latin America face vital challenges, restricted entry to capital, a extremely, actually complicated regulatory atmosphere and political and financial instability and adjustments from the left aspect of the political events to the fitting. So, it’s a fairly troublesome to, to foretell the long run. So in Latin America, we select to create. So, in consequence, I’d say that Latin American enterpreneurs have developed exceptional resilient, resilience and resourcefulness additionally, we discover revolutionary options to navigate these obstacles, leveraging creativity and adaptableness additionally, a after which the market traits are presents some similarities and a few variations. I I’ll comment that Latin America presents like a singular market panorama by a big inhabitants and cultural range. So it’s not, like trivial to, to overcome totally different markets like Brazil, Argentina, Colombia. So it requires a extremely deeply understanding of this panorama to to achieve success.

Victor Swezey 15:22
And yeah, so to observe up on the purpose, you understand, you have been you have been talking about among the financial instability in Latin America. And I do know that, you understand, that’s been within the headlines relating to Argentina not too long ago with, you understand, triple digit yr over yr inflation, and that’s one thing that you’ve been fighting. And I used to be simply questioning, how does how has this financial instability possibly affected the startup scene? After which, you understand, from the Num Finance perspective, how do you see steady cash interacting with, you understand, what occurs when the foreign money that they’re pegged to is possibly not very steady, but additionally do you see them as a possible resolution or one thing which may be capable of assist in these sorts of financial environments?

Agustin Liserra 16:04
Yeah, properly, as as you mentioned, financial instability, make it difficult actually difficult for startups in Argentina to safe conventional funding from banks and traders, a distinct buying and selling situations foreign money devaluation, extraordinarily excessive inflation charges create uncertainties, and that results in a risk-averse averse atmosphere in Argentina. And likewise financial instability typically brings challenges by way of capital controls, delays in cost processing, restrictions to, to capital markets, additionally, it’s fairly troublesome to, to know the evolution, for instance, about worldwide wires in Argentina, and if you are able to do it or not, and it adjustments each single week. And our enterprise mannequin focuses on on actual time, cash motion, utilizing stablecoins can present the startups with the flexibility to transact swiftly, each domestically and globally. And this will facilitate operations. It’s a actually environment friendly manner for cross-border funds and larger monetary flexibility additionally.

Victor Swezey 17:43
Yeah, so thanks a lot, you understand, for all of that, you understand, each about your organization and concerning the state of affairs in Argentina and the startup tradition there and in Latin America extra typically. I suppose I simply needed to complete by asking you, you understand, what, are you touched on this, however what are some fintechs that, you understand, individuals within the banking sector, individuals concerned with financial institution automation would possibly need to watch popping out of Buenos Aires popping out of Argentina? You understand, what are some fintechs that you simply all are, are enthusiastic about? That, you understand, possibly needs to be on our radar?

Mariano Di Pietrantonio 18:13
Nicely, I imply, some of the distinguished fintechs to look at it’s, I suppose, you understand, it’s Mercado Libre typically referred because the because the Amazon of Latin America, and whereas Mercado Libre even began as an E commerce platform, it has expanded into FinTech providers via its subsidiary Mercado Pago. And properly Mercado Pago presents and a variety of digital cost options cell wallets, QR code funds, and I imagine that they’re turning proper now into this type of tremendous app proper in which you’ll just about have every little thing. In addition they added proper now deliveries and a few of these providers too. And since they’ve like many of the market on their hand, they develop like actually actually quick proper? However the cool factor is that also they are rising in all of the nations in Brazil in Uruguay in Colombia and Mexico. They’re actually actually, actually large. One other FinTech that it appears actually attention-grabbing to me for the factor that I that they’re doing is Ualà whereas is one other Yeah, pockets I’d say and that it has built-in a QR codes that has built-in and these Yeah, like E commerce platform to create your individual e outlets. They even purchase the financial institution in Mexico, I imagine the ABC financial institution. So yeah, there’s like a few these fintechs which are gaining a number of traction within the within the area. Yeah.

Agustin Liserra 19:49
I’ll add to what Marian was was saying. One thing associated to your query concerning the Latin American a panorama and it’s that this type of of profitable corporations are being funded by Latin American individuals. And it’s a the rationale for that’s that it’s fairly obscure the Latin American issues from outdoors. So I might see some challenges in for giant corporations similar to Amazon, Apple and, and worldwide corporations to introduce the merchandise right here in in Latin America, and this displays an enormous alternative for Latin American startups.

Victor Swezey 20:54
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