Why Liquidity Comes Before Yield in Corporate Treasury

0:11Paul Bances: I'm Brett Turner, founder and CEO of Travada. Paul Bances with me. This is really part two of an episode that we did. I'd encourage you to go listen to the first one if you didn't do that. That was sort of the backstory of just how we connected really sort of insiders and from our respective areas with from really the blockchain and crypto world and all in the founding of PYUSD. And then how we connected, which were really the Trivata story, which is really around data and infrastructure and automation of all the workflows, building something new and modern from a digital experience in managing cash and liquidity, more on the corporate side.

0:46Paul Bances: So we'll pick that up from that episode. But, you know, I'd be remiss to mention really the whole thing about this is a new stablecoin series that we're kicking off. So we've got a lot of episodes coming. Again, this is the second part of the first episode, really under this banner of what is it going to take for stablecoins to go mainstream, particularly in corporate finance and corporate treasury. That's very different than consumers. So if you think of like all the back and forth and the battle between the bank lobby and the crypto lobby happening around the Clarity Act, why isn't that done yet?

1:22Paul Bances: Yield is a huge topic right now and warring on that. Bank's worried about the flight of deposits. Can you get yield directly on the stablecoin reserves that sit outside the bank? Well, that's a problem. And so all those things are happening. But the corporate use case is very different because that's just, we see that we got a different story to tell because from that standpoint, it doesn't really matter. It's not really about yield. It's around liquidity and managing your operating capital, which is primarily just all of the blood and the arteries of the body of a business. I mean, that managing that working capital and that corporate cash is really critical.

1:58Paul Bances: Liquidity trumps yield. So that's really a core thesis of this. We'll talk about and unpack a lot there. So that's, you know, really the stablecoin series that we're kicking off. We're kind of teeing up part two now. What is, so the segue that we kind of ended the last episode telling the story, how we are, we connected. I got introduced from an investor to Paxos. Paul was at Paxos at the time. I remember it was pretty cool. They kind of, you know, were gracious to meet with me. It was the next day I was in town, came in, and then here I am telling this, you know, this corporate use case and all what was happening.

2:34Paul Bances: It was like, we need more use cases for stable coins to actually do more than just crypto trading. And so here I come in and, you know, Paul was right to mention, I was starting at the time, really looking with Circle IPO and coming out and big sort of, you know, like a lot of folks, it really legitimized the inspiration of like where this is now going to go and take off. And so it started with this, am I crazy? Because I mean, it felt like this has to happen, but what am I missing here? I need to talk to people that really understand this business, really understand the blockchain infrastructure and crypto and stable coins.

3:10Paul Bances: And so how is this going to intersect? And I think that's where we met. So maybe we'll pick it up there and talk a little bit about this corporate use case, because that's where it started and how we can get started now. I know.

3:23Brett Turner: I think that's a great place to start. So I'm going to ask you, I've never asked you this before. So what motivated you to walk into Paxos? I know you said there was things that were happening in the industry with Circle IPO, etc. But what were you hearing from a Travada perspective? What were you hearing from your customers? What were you hearing from the bank? Or what had you identified internally that made sort of some of those light bulbs go off and say, hey, this is something that I need to explore and then come up with your thesis? And then, you know, am I crazy for looking at it from this perspective?

3:54Brett Turner: You know, tell me a little bit about sort of the genesis of all.

3:58Paul Bances: Yeah, I think the genesis, I mean, it's one of these things. It's when people see where Travada's at today. I learned this phrase from a mentor of mine way back. He, you know, built a successful company, took about a dozen years, went public. And when they were going public, one of the junior bankers on the team kind of looked at him and said, man, you guys just came out of nowhere. And he's like, yeah, just a 12-year overnight success story. And I feel like a little bit of people are like, well, what's the epiphany? And it's like, well, yeah, you kind of, yeah, you have to have a vision in the beginning.

4:28Paul Bances: And we did, but you're learning so much as you go. And this is Travada now, the start of the company 10 years ago, a little more than 10 years ago now. We've been in market for seven years, but really, so, you know, to answer your question, it really comes out of just this journey that we've been on because it's really around the thesis that started with Travada, Trove of Data, really this steeped in data. and modern infrastructure, cloud-native infrastructure. Still today, not a lot of people understand the difference between cloud-hosted and cloud-native, which is a very different building block.

5:01Paul Bances: And so we focused there. We pioneered APIs with banks. Another big part, to answer your question, because we work with banks. It's a big part of our go-to-market strategy. We want to work with banks. It gives us a way to distribute our products, but it also helps the banks with building great technology and everything is resulting in this next-gen experience that needs to happen and next-gen technology that the bank also needs, especially with all these new things like a stablecoin. So all of this and being in market, working with customers, being in the corporate landscape, my background as a CFO, I started out as a CPA at Deloitte many, many years ago, spent some time at Amazon and their corporate finance group, but just being in the trenches as a finance professional, as a CFO in startups, but more enterprise focused startups.

5:49Paul Bances: Managing cash is key. Just as it is when you want a treasury, it happens more formally with very large companies. But every company, the lifeline is cash. And all of the utility of that, the working capital, all the management and workflows that go along with that are always hard. You don't get a lot of leverage with. you're easier using bank portals and spreadsheets, or if you're some of the largest companies, you're using a treasury management system. Those systems, there's few left and they're all extremely antiquated. There's a few left, but nobody's built the new treasury management system in almost 30 years.

6:28Paul Bances: So really this is all the context of going through this, innovating in this market, built on this data and infrastructure strategy that we focus because it's about automating all the workflows that sit on top. So part of the, you know, when, you know, more and more is happening with the blockchain, knowing that there's, this is going to really be the future. Like I think a lot of people would see that, but then when you have some of these catalysts, stable coins, and then the sort of coming out party a little bit with Circle that everybody, you know, gravitated to and sort of legitimized sort of the value and their approach to making it more regulated and focusing on that side more, kind of where the crypto's past kind of came through over the last few years.

7:11Then it was like, okay, now this is maybe not going to happen immediately tomorrow,

7:17Paul Bances: but this is now a building block. This can be used and kind of go, how is this going to go primetime here? And we've got a perfect use case for it because it really hits all of the utility aspects of it. So really long answer to your question, because there's just so much there of the why. But I think this is where the reason why it's the corporate use case is just because it's the next step in doing all the automation that pairs with AI that needs to happen. Otherwise, you're never going to get that sort of escape velocity or that sort of acceleration to kind of take everything to the next level.

7:51Brett Turner: Okay, wow. You said a lot there. So let's unpack a couple of things. One that I'm interested in early is you mentioned the banks, right? And we've mentioned that in the first session that we did. There's this sort of debate or tension between the banking industry and let's just call it the crypto industry on what the impact of stable coins should be, how they should be regulated, should they pay yield, how do banks participate, etc. You're in a unique position because you obviously have all of these corporate clients, some of the biggest brands in the world that utilize Trivada, but you also have these wonderful partnerships with some of the biggest banks in the world.

8:25Brett Turner: So in your conversations with those banks and as you start explaining what Trivano wants to do, how we want to incorporate digital currencies, how we want to automate some of these processes, how do those conversations go with banks? In your opinion, do you find that sort of they've accepted this sort of position where this technology, let's just call it the technology, is coming one way or another, and it's a question of, you know, what do I support? What do I build? You know, do I do a tokenized deposit? You know, do I provide infrastructure for my customers? How are those conversations going with the banks?

8:59Brett Turner: And can you share a little bit of how they see a platform like Travada being able to accelerate their own sort of digital strategy?

9:06Paul Bances: Yeah, absolutely. I think, you know, the early days of Travada, in order to build really a, you know, data and infrastructure, where does the data come from? You know, it's the customer's data, but the banks are keepers of that data, the ledger with the core system. And so they have all the data. It's just not being utilized and it's disparate in all the different pieces and parts and layers and things like that that the bank ecosystem is today. So in those early days, it was about the APIs. And in the early days of Travada, it was talking about APIs because that was prevalent in tech. That's how tech sort of rose, leveraging APIs.

9:42Paul Bances: A lot of folks in banking didn't know what an API was. But they embraced that. APIs came along. So we pioneered APIs. We did it with banks. Banks had to build them, make them available. We built to them. It became the intermediary. And it's still not a perfect science today. Far from. There's no standards. So we had to do a lot to actually make them useful and leverage that in a powerful way. And that's a big part of kind of how we built Trivata on kind of that data thesis. So now we've kind of come a long way because I think in those days it was the banks were like, do we really want to do this?

10:16Paul Bances: Do we need to do this? And I think now it's a pretty emphatic, well, of course, data is key. APIs are part of kind of where we want to go and where we need to go, how our customers need to leverage their data. And so now when you kind of look at the stablecoin strategy, I think it's now whole next level from there, knowing that there's systemic change coming. The blockchain is very different. The momentum is moving to the blockchain. What exactly is it? Is a stablecoin just another rail to adopt and utilize by the bank? or is it really now a killer app that's actually, you know, the momentous shift that's going to drive people to making blockchain something very different and really a whole new planet that's going to start to spring up in terms of where the global system, you know, financial system is going to go.

11:04Paul Bances: So I think now what's happening is that whole shift has happened. I think the banks know it's systemically important. I think if they don't do it, they know that there's going to be issues. And so I think they've all embraced it. And so I think now the next question is, okay, if you do it, well, what happens next?

11:22Brett Turner: Yeah, no, it's, again, fascinating. That's why I was asking from your perspective, because it's interesting. The banks have been a little slower to move. But if you look at other aspects of sort of the ecosystem, I credit a lot to like what Visa has done and MasterCard has done. And Visa just made an announcement about their stablecoin platform, VSP. You know, Zelle issued a stable coin to be able to take their services international. Swift is now talking about, you know, going on chain as well. So a lot of changes are happening there. That's why I was interested in your conversations with the banks.

11:53Brett Turner: Another question along those lines, because you said that, you know, sort of the retail and the individual use case, you know, sort of that's on one side, but you said the use cases for corporate, but you didn't double click on some of those in your mind. So what are these sort of no regrets type of use cases that you think, you know, a large enterprise can start utilizing stable coins? What pain points are they solving and where does the technology actually add value to them sort of in the early days until the ecosystem continues to build up?

12:23Paul Bances: Yeah, absolutely. I think that the use cases get missed because, again, not a lot of people understand how the enterprise functions, how corporate treasury functions, how even corporate finance, how they utilize various systems and those rails in all of their day-to-day. And I think most of the, everybody has the context of more consumer banking. And there's, you might have one or two bank accounts. You might have an investment account. And so it's pretty compact. You're going to park money in high yield savings, let's say, or maybe you're going to invest through Robinhood or whatever, but then you're going to have your cash, your paycheck's going to come in.

13:01Paul Bances: So it's very simple. All the utility is, there's not a whole lot of utility and you generally get those things for free. And so now with like, if you look at a stable coin, you're kind of, there's some utility, some benefits, but you want those for free. It's just a better free. You've already got some of that stuff for free. I want a better way and to do more things, have more freedom, but it's still, you know, still going to be from that context. On the corporate side though, managing working capital, it's not about, so therefore on On the consumer side, yield becomes a big deal because it's like, I want to, if I'm going to use this, you know, stable coins, put my money there, I want to earn on that.

13:38Paul Bances: And so on the corporate side though, it's, you know, the first thing people look at if you're a consumer and you start asking about or you're talking to somebody maybe in corporate finance or corporate treasury, you're looking like, well, that's, you're sitting on a ton of cash. You got to invest that. You don't want to let that sit there and not earn on it. But the first thing you learn is like, it's really not about yield or interest on that money. It's about availability and control of that money. It's about liquidity. Liquidity is making sure you have the money when you need it. It goes in the right places when you need it.

14:10Paul Bances: And so that level of control and that level of safekeeping, because it's all about using it for your operations, for your business. It's not about secondary, maybe tertiary is really, you know, earning on that. That would be nice if you could do it, but it has to be almost like, it can't be like medium risk. It has to be almost, you know, zero risk, right? So that's the posture that's taken. And because of that, there's just a whole different, you know, set of use cases and utility. And that's why we can get in a little bit into some of those things. Right out of the gate, there's some low-hanging fruit.

14:43Paul Bances: And that's, you know, intercompany settlement, for instance. You don't have that in the consumer side, but that can be a pain point because you got entities or businesses that have a web of entities. And a lot of, you know, business is transacting between entities. And so managing all that can be fairly complicated. And some businesses are just global businesses. They have these entities, you know, they might have a thousand entities and all of the subsidiaries and all these structures. So all of that intercompany activity is big on the accounting side and especially big on executing. It can have impacts on taxes.

15:19Paul Bances: You know, all of the aspects that, you know, the business is setting up those for. And so the use cases are very different. That's a huge use case right out of the gate. And that's something that if you're a corporate using it and you can streamline a lot of that stuff and tap into a lot of that utility, you're like, am I willing to, because I'm paying for a lot of that stuff today. And, you know, am I willing to give up some yield to cover that and have all these benefits? Well, the answer is usually yes, because you're not caring about that yield as much right now. And if you can tap into those benefits, those would be huge and a huge unlock.

15:57Brett Turner: Yeah, it's interesting that you position it that way because one of the criticisms or one of the critiques now of stablecoin for payments is the ecosystem is not mature enough. First of all, you have to have a willing counterparty that's willing to accept the stablecoin or you have to go through what they call the stablecoin sandwich, fiat to stablecoin, stablecoin to fiat. And what that does to things like efficiency and cost and is the promise of the technology being fulfilled because we don't have sort of the ecosystem built out. But what you're saying is sort of an immediate use case that's sort of a no regrets use case that you can start doing today is that intercompany settlement because it's not dependent on sort of the ecosystem being built out and willing counterparties to receive the payments.

16:39Brett Turner: It's you're just moving value amongst your own related entities, right?

16:43Paul Bances: Yeah, absolutely. And I think the other part of this is that it gets missed besides some of these utility aspects is just being able to do it in a safe way. Having this accessible, these controls are really important. So I think when you kind of cover, have these low-hanging fruit use cases and you have this governed access that's within your system where you're doing everything already, and they become symbiotic in that realm, then all of a sudden it starts to unlock and the utility then is even stacks even more. So that kind of ties into the utility. But yeah, when you look at kind of what, like what we've done with Trivada, for instance, is that now we have customers that are starting to onboard and use stable coins within all of using Trivada as a system for where all your cash and liquidity is managed today.

17:34Paul Bances: But now you have a new means to do different things with it. And a stable coin does different things. It sort of collapses a lot of different things. And so now you can do things where before there was different levels of dependencies and a lot of manual workflows. And now you can set up an agent and you can move stable coins between wallets, between a two intercompany, to settle intercompany payables and receivables between two entities that you wholly, as a company, your parent company wholly owns. And so that to transact and to have a ledger around that as that record keeping and that bookkeeping, that's constantly happening.

18:12Paul Bances: And that happens at a high degree or a high volume. So being able to do that agentically and then having an automated means to capture all that, put that into the accounting system to support all that, and not having a lot of people and process and spreadsheets and things to manage all that. Like that's just, that's just a scratching the surface, but it's almost like, and even if that's domestic use, not dealing with cross border because you have, you know, global entities, there's enough on the domestic side, even that you're, it's almost like you're doing a form of, you know, internal banking or almost like book transfer, except you have full control of doing it.

18:47Paul Bances: And you can do it, you know, 24 seven, you can do it on a Sunday, you can manage all that stuff yourself. And that's really capturing all that, that power, and all of that control that you have, and then having it, you know, using agents to do it. Now you're, it allows you to sort of, you know, get leverage in an area that, you know, you've never had leverage before. And that becomes game changing.

19:08Brett Turner: You mentioned agents several times, and I think one of the most impressive things about Travada is how seriously it takes sort of its AI component and agent component. Off topic of the stablecoins for a second, just give me your thoughts on what are sort of the misconceptions or how people underestimate the role that AI is going to play in sort of treasury management. Tell me a little bit about sort of your approach to building that and what you've seen some of the customers, because I think obviously, you know, having stable coins and digital currencies is going to wonderfully complement, you know, as we go towards that world.

19:42Brett Turner: But just kind of want to understand sort of your viewpoint, independent of the stable coins, just on AI and tool for treasury management.

19:49Paul Bances: Yeah, I think the big thing, this is where, you know, as we've kind of built, you know, Toronto over the years, we've still kind of coming out of a world and kind of lived through a world where, you know, enterprise software is something. You're using that. There's a lot of complexity there and all of that, the features and functionality. I need features and functionality. I have to have those things to do my job. And in the corporate treasury landscape, it's, you know, they call it a workstation, you know, very this desktop oriented view where you've got to do all these things and you need the system to be very functional.

20:20Paul Bances: And now when you kind of look at AI, it not only is he giving you access to us this incredible intelligence, but it's also the promise of agents to be able to start automating those things. And so it starts to, you know, give you a move toward a world where you're starting to obfuscate even the UI layer. And so, of course, you know, we're all too familiar with the SaaSpocalypse and all that's been happening. You know, maybe that's overblown and you see, you know, Salesforce and other stocks that are kind of bouncing back as a result. but there's still that overhang of where's the role of kind of enterprise software?

20:52Paul Bances: Is it sort of the end of that? Are we, you know, sunsetting that now? And I think AI, yes, will have a bigger role in how that's going to be utilized in sort of the app layer. So I think when you now look at data and infrastructure, it's even that much more important because again, AI sitting on top of that, it can use the application layer. It can use the APIs and all of those things in the functionality that's built from that lens, but it's doing it with agentically and using it in a way to just have smarter outcomes. And I think, but that's all really conditional on having modern infrastructure.

21:26Paul Bances: And if you're now using something that's a 30-year-old enterprise software and the under the hood, all that stuff before would never really get scrutinized. Now it exposes that a bit because now your deployment of AI, is that going to be native AI? Because now when you're going to ask those questions more and more because at the end of the day, are you getting these highly intelligent, precise, deterministic outcomes when you're using an agent or using, you know, the intelligence that you're gathering through chat? And I think right now everybody is witnessing it. You know, there are companies that are just kind of taking their database, connecting it to a, you know, an LLM and expecting to get great results.

22:08Paul Bances: And will they get good results or that will they get interesting thing, of course. But if you get 80 % or 80 % right, that doesn't work in the corporate world. It has to be 100 % right. When you make an error, it could have massive risk and massive downstream impacts. So that might work okay for a consumer because if something goes wrong, maybe it's not in that cataclysmic. But in the enterprise world, and that's kind of where my career has been built in enterprise startups is really, if you fail or if something fails, then that might be it. You might be kicked out. You might be done. So I think those are the sort of the things that is happening now with AI because it's starting to really expose the infrastructure layer, how that has to be modernized.

22:51Paul Bances: And then also it's to really get the most out of it, to do what it's really intended to do. It has to be configured. It has to be utilized. It has to be deployed in that kind of way. Otherwise it's close, but not good enough.

23:04Brett Turner: No, that's a great answer. It makes a lot of sense. And the other phrase that you constantly use is governed access, right? So when you're talking to the different treasury teams and talking to CFOs, what's top of mind for them when they start talking about those type of things? Like, have they articulated what their concerns are either on the AI side or on the stablecoin side when you said you can't get 80 % or 85 %? It's 100 % or you're looking for a job. So how do you close that gap? How do you make sure that's 100 %? What is it that they're concerned about when you say, you know, governed access and things like that?

23:38Brett Turner: And how are you going about sort of building that confidence for these folks to be able to say, OK, we're going to test and learn and be able to incorporate? Because as we've discussed, you know, in other contexts, there's a lot that a company has to do to be able to start utilizing this right from from creating their policies and procedures, you know, to training folks and understanding the technology. So tell me a little bit about, you know, that whole governed access and those guardrails and controls that Travada puts in place to make it easy for these companies to start testing them.

24:08Paul Bances: Yeah, and when you're dealing on the corporate side, the enterprise mid-market side, it's like you can't bring a piece of software to market unless you have those kind of things in mind. The hardening of the software, the testing of it, the securities, the controls, the transparency, the logs, the audit logs, auditability, all these things are so crucial in all of that. And if you can't in a world now with AI, or even, you know, years ago is kind of like the hesitancy of like using machine learning, because it would be like, great, I like it conceptually. But if it's a black box, I don't know how it's computing or, you know, doing things, then that's a problem.

24:47Paul Bances: Because I have to have a full audit, auditability or whole audit trail of of exactly how it arrived at the outcome. Because I can't just say, well, it just did it. Trust me, you know, just like the teacher when you're, you know, you're probably that math teacher that you had. It's like, you can't just show the right answer. You got to show me the proof, you know? And so I think that's a big part of that. So when you look at all of those, you know, the internal controls are really extensive. The larger the company, the more complex. There are teams that manage all of that. And so having various systems, having all those controls, all of that that makes it so it's all about risk.

25:23Paul Bances: It's through the lens of risk. It needs to be industrial grade. It needs to be hardened in a way that you know the risk of error, it's, you know, nothing's ever perfect, but the risk of error is extremely low and a tolerable risk when you know that even if something happens, you've got good visibility, you've got good remediation, all of these things that, you know, are set to be able to respond to that. And I think those are the kind of, That's the lens really that they're looking at stable coins. It's like, yeah, but I don't, I'm not just going to go and, you know, set up a Coinbase wallet and start, you know, moving money into that wallet and move it to some counterparty in, you know, in Columbia, for instance, I want to get the money to that counterparty in Columbia, but I've got to do it in the context of my system, all my workflows, all those controls, all that governance layer.

26:12Paul Bances: And if it's not in there, I'm not going to do it. I'm going to wait until it does get in there.

26:17Brett Turner: Yeah, no, it's. I definitely see that. And like you said, risk management is an important element of this, you know, and just from a compliance standpoint and giving them the tools that are needed. Do you find that in your conversations with potential customers, do they see the promise of the technology? Do they already see the use cases? Or is it also not only in terms of the governance access and controls, but is there an education process of saying, hey, anytime you're moving value from A to B or anytime you're doing any of these sort of activities, there may be some benefit of using stablecoins.

26:50Brett Turner: And that's what we alluded to earlier, that trying to avoid hype, right? And saying like it solves every potential situation, which is not true. There'll be certain situations where stablecoins make sense and others where other forms of payment will make sense. But do you find that you have to sell folks also on the use cases or are treasury departments and just corporates already thinking internally, here's all of my operations, here are all of my workflows and are they starting to independently see where those opportunities are, or is that still an education gap that Travada has to sort of take on?

27:22Paul Bances: It's a great question. I feel like on the enterprise side, there's a different kind of sequence of adoption. I think on the consumer side, once there gets to be sort of this education layer and understanding of it, then you see this engagement start to happen, and it's maybe a little bit more broadly. On the enterprise side, though, there's always early adopters, and the early adopters absolutely see those benefits. and more so than others. But the barrier is just like, okay, I can't use it until it's, you know, the risk goes down or again, governed access. When it's consumable, then I'll wait in and use it.

27:56Paul Bances: And then once those early adopters use it, they become sort of the test case, you know, that the leads for the rest of the industry. And because they're looking for, there are people that they trust, there are people that they think through, they see those use cases firsthand, they see the case studies, and then they start to wait in. And so I think definitely their education is ramping along the way. But the biggest, you know, catalyst is seeing that people, you know, who's going first. Some of those trailblazers are using it. And I think like anything, it's like maybe when you went to that scary roller coaster when you're a kid at Magic Mountain or whatever, and you're like, you know, I'll go on that.

28:34Paul Bances: But I want my big brother to go on it first. Once you go on it, and I know that you're safe and you get off and you can walk off the ride, then I'll go on it. There's a little bit of that. I think that's kind of what happens a little bit on the enterprise side. It's like once we see that it's safe, once we see that it's working, I already believe in the value. I already see some of the utility. Yeah, maybe I'm not going to be a power user and use all that out of the gate, but I definitely, you don't have to sell me necessarily on those pieces. You just have to sell me that it's going to work and I'm not going to get fired if I wade into it.

29:02Paul Bances: And I think it's kind of stages in those two buckets.

29:06Brett Turner: Yeah, I know. And I think as we said, you know, and some of the momentum now in the industry with reputable big giant companies like Visa, MasterCard, what they're doing, some of the banks, you know, I think it's encouraging for folks, right? Because these are people that are in the business of moving value, moving money and payments and to be able to incorporate the technology makes it safer, I think, for some of these enterprises to at least dip their toe, as we like to say. I hate roller coasters, by the way. So even if you were right, I wouldn't ride it after you. But regardless, that's interesting.

29:38Brett Turner: Now, let's take a step back for a second, because we've been talking about stable coins, which is tokenized dollars, right? I think the more interesting conversation at times is what we're starting to see on just other forms of tokenized assets, right? And sort of the interplay there between a tokenized dollar and a tokenized asset. And we said earlier, sort of atomic settlement of going in and out of these positions quickly. Tell me a little bit based on your background in your career and currently with Travada, how do you see the potential for that? What are some of the, again, pain points that something like that can solve when we start this whole concept of tokenizing all of these assets, which a lot of people have been a proponent of that for many, many years.

30:19And they said, in fact,

30:21Brett Turner: we're going to start with the dollar and then we're going to go to other assets, whether it's gold, whether it's equities, whether it's real estate. Tell me a little bit about from a treasury management standpoint, how you view that sort of evolution of tokenization of asset.

30:33Paul Bances: Yeah, for sure. I think that because there's such high utility, because that government access is so important, that's why you kind of go where it's safe. You work with, you know, can't fail banks, you know, that ecosystem is so important to utilize. And if you look at the last 40 years, like again, banks are still run off their core systems or off mainframe computers. You know, These mainframes are still, you have to find COBOL developers to fix something, right? So we laugh about that, but that's kind of, this is still really the state of a lot of banks and how they function and operate. And so you look at the entire global financial system.

31:09Paul Bances: We want to do all these advanced things, but at the end of the day, it goes through the bank. If it's not going to, you're not going to really do much outside of that, you've got to sort of reconcile or you've got to make sure that it's happening with the bank. And I think over the last many decades, that's where you have just layers and layers and workarounds and this and lots of different new rails and formats and protocols. And you just get this massive system. And now when you could look at the promise of like blockchain and a stable coin or digital assets and tokenized assets, now you're talking about you're really, it's not about how that's going to fit into the banking system.

31:47Paul Bances: Because that's sort of the, you know, the, everything is revolving around the bank. in this world, now it's moving to, you're going to see an entirely new order or stack of how that's all going to work. And so, you know, maybe the analogy would be like, and I've got gray hair, so I had to deal with this with the, your component video cables, you know, the green, the blue, and then you got audio. There's a couple of cables there before, you know, fiber came along. So you're using a lot of cables. It's like, man, there's a ton of cables. And then all of a sudden the HDMI cable comes along and it's like, Hey, it's got audio, video, one cable, all of those pieces and parts kind of all now happen in one cable.

32:25Paul Bances: Isn't that nice? Just connect one cable now and you handle audio and video with that. And I think there's a little bit of a, there's a chance to kind of, as we kind of look at this, where blockchain is going and stable coins sort of being a, you know, tokens are going to be, you know, these ways that are all digitized and it's all essentially built on the core of data and modern infrastructure. Now you can sort of do things differently. You don't need to go through the same, you know, system. You don't need to go. So I think they've got to reconcile. They got to come together. And I think the bank absolutely still has a big role in this.

33:00Paul Bances: But I think when you look at now, it's a chance to kind of do things different, more streamlined. And then once you're in that world, now you can start to stack or be interoperable in all these different other kinds of adjacencies. And whether it's a tokenized money market, you know, fund, that's something because when When you look at the interplay between your corporate cash, and then you look at excess cash from what you intelligently determine, that excess cash now, does that, you start to have a different, you know, tokenized instruments to the money market securities and things. And does that be something, you know, of course, everything we're moving into a digitized or tokenized world.

33:37Paul Bances: And so now when everything kind of boils down to data, leveraging in a blockchain world, all of a sudden you get that, you know, things that you can just do, bundling into many moving parts, moving into one, no disparate data, all kind of, instead of batching things, you don't have to batch for efficiency because this system has choke points if you put too much data through. So you've got to batch it in order to make that work. And now this world, like millions of transactions flowing through at high rates of speed, like everything can now just happen at a transaction level because that volume of transaction is no longer a pain point.

34:15Paul Bances: And so you can handle all that at high speeds. And so that means you're not going to deal with reconciliation. It's inherently reconciled because you just have everything. There's no batches to unpack and then to tie out. Transaction to transaction. Now, you know, AI will essentially just easily match those up. So I think everything is, it sets up for this proliferation of tokens, which then, if everything is moving in that world, this is where AI and agents can do things. Because now it becomes a great baton for agents to be able to do things and automate a lot of these things. And we don't quite know how that's all going to look just yet.

34:52Paul Bances: But we don't, you know, on the corporate side, we do know that, you know, it's constantly over decades, it's constantly coming down with finance and treasury and accounting, always having to do more with less. And we're coming out of a cloud era and technology, where you expect that you can do get all that compression on costs on workflows, getting leverage. And that just hasn't really happened that much, you know, in the finance world. And so now you can finally get this shift where you can get that kind of leverage. And once you get everything kind of digitized and tokenized on this new foundation of blockchain, and you have AI, and AI is teaming up with the tokens or teaming up with stable coins, you know, that everything can change.

35:35Paul Bances: And I think that's sort of ushering in. And then it gives you a chance to really look at all the underlying workflows. Why are we, do we even have to do it this way? And so now you can change all of the workflows. some of those just might just go away. So I think it's exciting. It opens up all those possibilities. It gets a chance to really, you know, dream big on from a first personal, first principles perspective on how that's all going to happen, how that's all going to interoperate. And, you know, then it just, it's going to just be a bit of a flywheel where that's all going with all kinds of other adjacencies and other, you know, tokenized products.

36:12Brett Turner: That's fascinating. Like we said, it's a really interesting time to be in this space. So I'm going to ask you one last question. You know, again, you're fairly new into the whole digital currency, stablecoin space and all that. So what has you interested? What are you following? You know, what's sort of the topic of the day for you between now and maybe the time that we record the next one? There's the whole thing on Clarity Act. You know, there's some momentum on that again. Are they going to land that plane soon? Mad rush of everybody getting an OCC charter, right? Every week there's an announcement somebody's got their new license.

36:43Brett Turner: There's the announcements of OpenUSD, which again could be, you know, quite interesting. Fascinating.

36:48Paul Bances: Yeah.

36:50Brett Turner: But what Visa and MasterCard are doing, the Visa stablecoin platform, you know, Anchorage Digital is doing a bunch of stuff. Like what of all of these things, which one's the one for you that's sort of like, okay, I'm not keeping a close eye on that because I think that's going to have a material.

37:03Paul Bances: Yeah. I always kind of wondered like, you know, Stripe is going to do more and now you're kind of, you know, some of the stuff that's coming out with PayPal and that's super interesting. You see, like we're coming out of a world where it feels like, you know, all of the crypto trading, the gazillion of, you know, cryptocurrencies that are out there, things are coalescing around a few, but even the volume and stuff is maybe kind of waning a little bit, you know, so I think everybody's now okay, hey, this, you know, crypto is, is really cool. well, it's here to stay, but let's, you know, as opposed to just kind of trading on some of these, you know, the value pockets or let's, in some of the speculative nature of it, like let's do some real world things.

37:44Paul Bances: And I think that's kind of where stable coins and more tokenized, you know, assets are going. It's basically just tokenizing all the real things that we currently do today, which is, you know, fascinating. And I think all this is leading to, again, what I feel like that, you know, the entire global financial system is going to essentially, you know, be rebuilt in an entirely different way. It's not going to happen overnight, obviously, but it's going to happen probably over the next 10 years. I think a lot of people will agree with that. But how the thing that fascinates me is that when you even look at all of fintech, because, you know, you have to contend with the bank, most of fintech companies are all more point solutions.

38:22Paul Bances: It's identifying where there's some things around the edges. Here's an opportunity, We can exploit that maybe that the bank doesn't do or is not doing well, or here's a user experience. And it's building a company around that particular niche thing. Now, some of these are big niches, but there's definitely lots of point solutions. And now, you know, we're shifting a bit and it's starting to open up the playbook a little bit. And then on top of that with AI coming in, the ability to develop software at an entirely different pace. And now it used to be always like, hey, stay in your lane. You're going to do this.

38:55Paul Bances: and then somebody else is going to do that. But don't get defocused. Don't boil the ocean. You know, you got to focus, focus, focus. And I think that's, you know, still largely true as an operator. But I think now when you look at some of these adjacencies, if you've built, you know, you have modern infrastructure and with AI, you can now tackle some of these adjacencies and really built it on a really powerful data mode if you have that. And I think that's the exciting thing for Travada. That's why, again, Trove of Data, it's Travada. It's not like, you know, we weren't focused on the application layer.

39:30Paul Bances: We were focused on the data and infrastructure layer. And so now with AI, like we can build things and add things onto that core. So you're starting to see it as other companies as well. You start to make this run at it's building more, focused on building more operating systems or a super app sort of, you know, focus. And I think you normally would never do that. But I think because of the elements of what's new, of where things are going, plus AI to aid you in that and leveraging that, that's really opening up a whole new world and how you can build and how you go to market and how you can capitalize and add value for your customers with that kind of whole different paradigm shift of value that can happen.

40:12Paul Bances: So I think that's the thing that we kind of look at because what we've built is essentially we're the first company to really focus on corporate transaction banking data. There's no Plaid of corporates. I know there's corporates that work with Plaid, but maybe it's more B2C. But when you kind of look at the corporate use cases specifically and leveraging your corporate bank data for, you know, automating and decisioning and intelligence and all of that to drive all of that, like being able to, you know, have something that's across kind of the old school of data, the new school with APIs, there are no standards with APIs.

40:51Paul Bances: So we've had to kind of normalize that and build a really powerful kind of default standardized normalization layer through all that. So now that gives you a foundation to kind of build. And now you can build faster to kind of do some of these other things that are now, it's much more of the art of the possible. And so it's, yeah, it's a fascinating new era. And what's crazy is I've never seen this in all my years as startups that like everything is accelerating so fast.

41:21Brett Turner: Incredibly. Incredibly. No, and I'm very interested to see how the banks are going to react to this because I talked to a lot of them, obviously, in this space. and how many of them are going to support what's out there? How many of them are going to become infrastructure providers to their customers and actually provide the wallets and participate on that level? What role is tokenized deposits going to play? So a lot that we're going to cover in this series. I think, you know, just for future reference for folks, we have a lot of guests that are coming on from different perspectives. We have banks, we have treasurers, we have, you know, builders and other aspects of the industry.

41:51Brett Turner: So hopefully just a nice mix of perspective of how all this is evolving. We'll provide that for folks over the next couple of weeks.

41:58Paul Bances: It's going to be fun.

42:00Brett Turner: Absolutely. Well, thank you, man. I appreciate sort of your origin story as well and how we got here. And as I said, I think it's going to be an interesting time because, you know, the regulatory piece was big, you know, once we had Genius Act. And now we kind of, again, have to land the plane on clarity. But I think, you know, once that's behind us, I think this is going to open up incredibly. I think people are, they know where the direction is going, but I think people are still kind of waiting for that last sort of bit of clarity. all pun intended on that one last bit of clarity on all of this to kind of really unleash what you want to do so yeah this is going to be a great time yeah absolutely thanks paul

42:37Paul Bances: excellent and thanks everybody yeah we'll see you till next time