How Anchorage Is Becoming the Infrastructure Layer for All of TradFi | Nathan McCauley & Kevin Wysocki

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Talking Tokens: Crypto, Onchain Finance, Investing 51 min 3 speakers 8 chapters transcribed 1 month ago
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What is the main topic discussed in this episode?

Nathan McCauley 0:00
2017, I thought we were late to crypto. The players that were going to win had already won.

What is the current state of institutional adoption of crypto and stablecoins?

Nathan McCauley 0:06
Turned out to absolutely not be the case. It was still like the early innings there. And that's what's happening with the agentic banking.
Jacquelyn Melinek 0:19
Today's guests are Nathan Vicali, the CEO and co-founder of Anchorage Digital, and Kevin Wysocki, Anchorage's head of policy. Anchorage was the first federally chartered crypto bank in the United States. They were on the forefront of the stablecoin adoption side of things, institutional adoption, many different things. So I'm excited to chat with them today. Nathan and Kevin, welcome on.
Nathan McCauley 0:40
Thanks for having us. Thank you.
Jacquelyn Melinek 0:43
Yeah. Over the past several years, I would say Engridge has been at the center of the institutional crypto adoption front, working with teams ranging from asset managers to protocols and stablecoin issuers. So you've kind of had this front row seat to institutional adoption for years, even though that trend is kind of like picking up speed over the past 12 to 18 months, you guys have been in the thick of it.

How are stablecoins and digital dollars being defined and used by banks today?

Jacquelyn Melinek 1:05
So maybe at a high level, starting with Nathan here, like what is your take on the state of the institution's adoption curve today?
Nathan McCauley 1:13
So I think you're exactly right to say that it is something that's been in the works for now, probably the last three to four years really in earnest. But what we're seeing right now is an absolute acceleration. And so if you look to the previous administration, you saw Some real milestones like the first ETF start to get approved, the first banks start to make a foray into the space. And now with the passage of Genius and, fingers crossed, the eventual passing of Clarity, what we're seeing is everybody starting to come in. Far more asset managers are starting to come in the space and either look at launching new crypto ETFs or tokenizing their existing funds and assets. And then institutional allocators like large banks, large financial institutions starting to build the space, whether they're building in stable coins, tokenized deposits or real world assets.
Nathan McCauley 2:05
So absolutely a sign of acceleration that's been happening and we're getting to see a lot of that from the front row seat.
Jacquelyn Melinek 2:13
Kevin, how would you categorize the state of the industry's adoption curve today, too?
Kevin Wysocki 2:18
It's really strong. I would say, like Nathan, the Genius Act was a huge unlock. I think when Genius was passed, the market capitalization of stablecoins was around $250 billion. Now it's north of $300 billion and growing rapidly. And I think when we get clarity across the finish line, it's going to lead to more capital in this space and more growth and more projects.

Why is the U.S. dollar likely to remain the dominant global reserve currency?

Jacquelyn Melinek 2:41
100%. I know you guys have been talking about digital dollars for years, stable coins, however we want to categorize it. What are institutions understanding today that they weren't even asking about, let's say, like one to two years ago in comparison?
Nathan McCauley 2:55
Yeah, I mean, I think the biggest thing is the level of things that are now possible to build on top of stablecoins. And you see it in both old school type use cases, like, say, pay-ins, pay-outs of your suppliers, of the people in your ecosystem, absolutely seeing it there. A textbook example of this is everything that Western Union is doing with us. Western Union has decided that they're going to upgrade their remittance flows, and central to that is the issuance of a new digital dollar that is going to exist within their ecosystem. This is going to enable a whole set of interesting use cases for them. Probably principle of which is the fact that folks in the developing world receiving remittances will be able to receive those remittances and stay in the Western Union stablecoin.
Nathan McCauley 3:50
Rather than having to immediately convert into local currency, they can stay and become US dollar savers. So that's a very old use case that is now being upgraded with stablecoins. As strong stablecoin use cases we see are agentic banking, where agent to agent commerce is starting to pick up. Still small, but there are some very compelling initial use cases that are starting to happen there.

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