On The Brink with Castle Island - Geetha Panchapakesan (Tesser) on Enabling FIs to Utilize Stablecoins (EP.680)

Episode Date: October 29, 2025

Geetha Panchapakesan, the founder and CEO of Tesser, joins the show. In this episode:  Geetha's background in payments and how she arrived in stablecoins Major shifts across payments over Geetha's career Building a one-stop shop solution for financial institutions, PSPs and MSBs Where FIs are today as it relates to engaging to stablecoins Regulatory tailwinds post-GENIUS See more at tesser.xyz

Welcome to On the Brink. My name is Sean Judge. Today I'm joined by Gita Punchapacasan, CEO and founder of Tesser. We recently announced we let a $4.5 million seed round of financing into Tesser alongside Strobe, Anthemus, and Digital Currency Group. Punchapacasan has spent nearly 20 years in payments across MasterCard, PayPal, Moneygram, FISA, and most recently Circle. She's now helping enable financial institutions to utilize stable coins. Without first, Further ado, here's my conversation with Gita, Puncha Pocasana. Matt Walsh and Nick Carter are partners at Castle Island Ventures. All these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guests and hosts may maintain positions in the assets discussed in this podcast.

You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only. Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more to Britain's ailing economy with a new round of quantitative easing.

You print a couple trillion dollars, and all of a sudden people start to worry. So out of this worry, we have something called a Bitcoin. Bitcoin. Welcome to On the Brink. My name is Sean Judge. Today, I'm sitting down with Gita Panchapoxan. Gita, welcome to On the Break. Thank you so much, Sean.

And you did my name very well. I'm impressed. Worked on it. Just to start, Gita, if you could just share your personal background and how you arrived at working in crypto. Absolutely. I landed in payments with a job at MasterCard, no particular reason. And then tried a few things, meandered a bit, landed at MoneyGram, did cross-border payments, loved it.

And then meanded a little bit more. And from money ground to doing stable coins for cross-border payments, just eventual thing that had to happen. So here I am. That's great. And within payments, what is it specifically about payments that interest you? It's going to sound cliche, but it's the reality of it, the usefulness of it. It's something that everyone has to do.

And especially when I started doing cross-border payments, regular payments, yeah, paying for goods and services can be a little boring. But when you start sending money overseas, it feels like much more real value to it. definitely something that I appreciated a lot. Little anecdote was that while I was at MoneyGround, I set up U.S. to Philippines, U.S. to Mexico, and then I set up U.S. to India, and then I sent money to my in-laws. I was like, oh, this is real. Like, I'm actually using it. So there's something very, very real about it. That's great. And so you've obviously worked at a number of large payments companies before arriving at Circle. What major shifts have you seen occur in payments

before even stable coins? That's a very good question. There's a lot, right? But if I I were to step back and say, what are the big things? Domestic real-time payments with governments actually stepping in to push that within their countries. I think that's a big one, the UPI. The UPI, I think is about 10 years old in India. Picks is, I think, throws it a five years old, picks in Brazil. But I think real-time payments generally has become pretty popular, pretty big, pretty important. I think the other thing you see is a lot of this open banking,

API-based payments, like account-to-account payments, that whole thing, I'm clubbing into one big thing. but going beyond card to make payments, it's still more popular in markets where card is not that prevalent, but it has become a big trend. Plaid exists because of that, for example. The other interesting thing is wallets, which were primarily payment methods.

In a lot of the rest of the world, wallets are used for lending. So you can actually, from your wallet, I think PTAM does it, AliPay does it, all these super apps you can do loans from your wallet, insurance from your wallet, investing from your wallet, which even I think Revoluted offers.

So I think the wallet becoming a gateway to overall financial services has actually been very, very interesting to see. Well, makes a lot of sense. And then diving into Tesser, you started Tessor earlier this year. We were thrilled to lead the seed around there. What is the high-level overview of Tessor? Desson was built basically to enable traditional financial institutions to access blockchain in a very simple and easy manner.

Traditional financial institutions, which we define as banks, PSPs, MSPs, they move trillions of dollars today, but they don't move it very efficiently. And we now have a very efficient way to move value. Why not try to buy an easy way to get access to that? So basically, Tessa was created as a one-stop shop, simple, widely built technology solution for traditional financial institutions. And was there a specific moment before or at Circle that shaped your conviction in the space

around stablecoins? It's the journey, having been in Crosborder for so long, it's very much at MoneyGram, spending six months with my partner in the Philippines, who is a bank, trying to figure out how much money we need to keep there, and if they will give us any interest, and what will we do if the money runs out? It was so painful. And the fact that there's constant tracking of the working capital that's sitting in these places, I used to come running to my treasury guy and go, we've run out, can you please move some more money instantly? All of that, By the time I got to Circle, I was like, this makes sense. And so where are those legacy payments companies today as it relates to stablecoin strategies?

You see a lot of headlines. Are people really engaging with these things? Where are they in their journey into being able to send stable coins? They're all over the place. There's a simple answer. Even when I was at Circle, I think two to three years ago, some of the big ones like WorldPay, Visa, Stripe, all these guys started actively looking at stablecoins and using it. some PSPs who got into the game early, specifically PSPs, a few banks, but primarily PSPs.

But then ever since the Stripe Bridge announcement, it's become, it's really accelerated. A lot of the PSPs have tried to get in. They're doing partnerships. They're trying to figure out what makes sense. Banks have been a lot more cautious because they are much more cautious about regulatory impact on them. So they have been much more cautious, although, you know, like standard chart had got into the game early. And even now banks are like, okay, I will maybe provide a way to invest in digital assets. I'm not exactly sure what to do with stablecoins, but they know they need a stablecoin strategy. So they're all working on that. There are, of course, there's still some that need a stablecoin 101. So it is all over the place.

On Tessor, if financial institution wants to have the alternative to send stable coins, what infrastructure is lacking today for them to do that or said differently? What is Tessor building to enable this as an option? Truthfully, the infrastructure, It's very fragmented, so it's all over the place. If you have to go understand what custody options you have, what makes sense for you, and then you have to figure out what providers to use if they can actually do exactly what you need to do, especially when you're a regulated FI, then you have to figure out where do you go for on-ramp. And then which token should I use?

Which change should I use? Wait, there's a new chain. Should I use that? What exactly should I do? And then what is gas? There's all that stuff. And then at the end of the day, we bring all of that. together in one package solution where they can plug in and go and be able to offer stable coin

payments either as offering it to their customers as an option or even using the rails in more efficient ways to find the new revenue opportunity. Lots of new things that they haven't thought about we're able to bring it to them in one piece. It would take them upwards of 12 months to build this. They can build it with us in like two to four weeks. At the end of it, they do payments on behalf of others, right? So they have to account for every cent. So we do all of the reconciliation, the reporting, the cleanup, all of that for them, which makes it a lot, lot easier. So technically from an infrastructure perspective, yeah, things exist, but it's difficult.

It sounds like these financial institutions are a little bit all over the map, to your point, in terms of where they are and they're a stable coin journey. But what is your view in these conversations on how stable coins will benefit a financial institution? I mean, so many ways. A lot of what we are seeing people realize is that settlement as is, A use case is a very big one. Banks have grown up on this nostro-vostro accounts up. So they have accounts everywhere, friends and other banks, they hold funds and all of these banks.

It's a painful thing to manage. Treasury across multiple currencies, multiple banking partners, when you can settle with a better instrument where once the value is transferred, it's yours. You don't need to hold value there in order to have it ready to be transferred, but you can transfer it at a moment's notice, and the value now has actually been transferred. That is an incredible innovation. So for a lot of these banks that move money,

they don't need to do this anymore. They don't need to hold funds with other banks any. They can instantly move value with stable coins. That to me is fundamental, like an operational efficiency in leaps and bounds. There's also, by the way, a lot of the dollar accounts, we talk about dollar accounts in like Argentina and places where there's volatility, But I don't know if you notice, Wise announced recently they were hiring a new person. It was all over the news.

And they're hiring somebody to actually look at what they're specifically the digital holding strategy is. How do you actually provide capability to their customers to hold funds in dollars? And that's basically what people are saying is that de-dollarization, notwithstanding. There's actually a lot of demand for holding dollars globally. And this is a very simple and easy way to do it. And just thinking about starting this, starting tests are a few years. years ago versus right now you mentioned it feels Stripes acquisition of Bridge was the starting gun for a lot of traditional Web 2 companies as well as just financial institutions broadly saying,

hey, we should start to look at this stable coin space. But I think more importantly, recently, with regulatory clarity, how is the Genius Act shifted conversations you're having with banks and fintechs? That's an interesting question because the Genius Act is focused on the issuance, right? It's not really focused on how does a bank account for stable coins and what can they lend against it and how does it look on the balance? It doesn't say any of those things. It basically says these are the rules if you want to be an issuer. You have to be, I think it's called a PPSI, but these are the rules if you want to issue a stable coin. That being said, newer fact of the existence of the Genius Act has actually opened up a lot of doors because people are

like, oh, okay, so it's not a bad thing. We can actually in some way it's legal. Exactly. we can engage with it in some way. So I think that has been extremely helpful. And needless to say, the U.S. sets the standard. So although Mika in Europe has been around for a while, and it's much more comprehensive, it's not focused on issuance. Once the Genius Act has happened, other countries are also at least willing to engage and talk about it,

although they're probably a lot slower. There's been a tremendous amount of infrastructure that's been built over the last five years or so that have made it easier for individuals to hold and send digital assets. What other infrastructure could you enable today that wasn't maybe quite built a few years ago? There's a bunch of tooling underneath Tessor.

The way I think about it is there are two or three different kind of broad areas. From pure like tech perspective, I don't think you could do payments on, I don't know, Ethereum five years ago. What was it like? 15 transactions second, some ridiculously small number. It was very expensive. But that has significantly become better. The chains are able to compete with visas.

like 65,000 transactions per second. You have layer two that can actually do that. I think that's a big step forward because you can actually take this to a bank that does payments or a PSP that does payments and say this is very similar. You can get the same kind of throughput you used to get with other payment methods. From a technology front, there are some of those things like custody infrastructure also, whereas you had Bitco Anchorage, which were meant for large holders where it's not easy to move in and out. You need to look at something and people are starting to actually show. towards more of a payments-based custody options, which are also secure and tight. So I think from a technology perspective, those things are there.

There's then the ecosystem. This on and off-ramps have continued to grow. Without that, you couldn't do anything in payments. So I wouldn't have been able to take this to a bank and say, hey, look, we can build you an ecosystem. We can connect you to the ecosystem because it's there. It exists. So that's been a big shift.

But honestly, I think it's the maturation of the space overall has been, why Tesser, we're doing this at the right time. It's the visas of the world that push to say, we're going to do this, we're going to be an early adopter. It's the regulations. It's the fact that regulations have been enforced on exchanges and other crypto-based FIs so that there's now trust in that as well, that they're responsible for AML. They have AML obligations. They have KY, C, Y, KYB obligations. All of those things have brought in a certain amount of trust into the ecosystem.

So I am able to build Tesser for this specific audience only now because of all these things that have actually happened. Right. And I guess with the Tesser product, what does the product look like today for businesses looking to move money? And you touched a little bit on some of the reconciliation reporting piece. So what are some of the core aspects of the product that really stand out for FIs as they evaluate other providers in the space and other ways to, engage with stablecoins? Absolutely. The MVP, by the way, is going out tomorrow.

And the core platform, the MVP actually does cover most of the plan for the core platform. The core platform is, it's a packaged end-to-end for the FI. FIs today are talking to payments networks, other access to stablecoin infrastructure, but they don't really have the pieces that need to plug in, number one. So we provide the custody infrastructure, which the plan is to have multiple options, depending on the kind of FIUR, depending on the specific needs you have. It could be a custodial option, an MPC wallet. So based on what it is that you're looking for, we have different options. Starting from that, we can plug you in with the right on-ramp providers, depending on your geo, depending on your risk appetite, etc.

And then there is all of the treasury management, the gas management. We are plugged into multiple chains. We offer multiple tokens today, the MVP is USCC and USCT, but eventually we plan to add a lot more. So all of that you have access to immediately. And we're managing your treasury for you in the sense that today the MVP is all about tracking your balances based on, okay, you're sending money to Nigeria. Yesterday the rate was one thing.

Today the rate is another. You may not have enough money to match that. So we make sure that your treasury is ready to make the payments for your day. We are obviously doing the payments. The payments are almost the BAU piece of it, like everybody's doing the payments. So we are plugged in to the right off-front providers. So we're enabling the payments. We're executing on the payments.

But then, like you said, the important piece is the reconciliation because we ensure, again, for you as a service provider to others, as an FI, we ensure that we get you all of the data that you need in your transaction so you can take and tie everything at the end of it. That's basically the end to end of what we provide. And I'm fairly confident there's nobody else that provides this out there in this particular form for NFI. It will provide bits and pieces again. I think it's fragmented. You can use other service providers who have their own regulatory framework and operational framework.

But if you want to build this within your own framework and do it quickly, this is the best way for you to do it. It's amazing. And as you're building, Tesser, if you could fast forward one regulatory or technical development, what would that be today? Honestly, even though I was saying regulations would move forward, the truth for the matter is banks, especially banks, are still a little skittish about, okay, I don't know if I can hold stables. Can you find me a way in which somebody can hold it on my behalf? And that's primarily because in a lot of jurisdictions, including the U.S., you don't exactly know what it means to hold stables. In a lot of the jurisdictions in Latam, for example, stables are neither a good or a bad. It's just gray. When it's gray, you're like, what happens if they come knocking on my door and I don't really have an answer? I wish that would accelerate. I think it's going to. I wish it would accelerate a lot faster than it does.

Well, this is great. We invested earlier this year. What are some of the kind of key hires that you need to get going on here in the next year or so? We've done kind of an initial hire already. We've got very deep product people. We've got BD people. Needless to say, we've got our key engineers. We are going to probably hire some folks on the operations.

side once our design partners get up and running, we'll continue to build out the engineering team, although really the engineering team is trying to see how much they can use AI to keep it tight. And then we'll see. We'll see what else we need as we go. But we're now five and a half or six people, five and a half because one of them is actually part of them. Well, congrats on the launch at Money 2020. And I'm sure people will be excited to see that next week.

In the meantime, where can people learn more about Tessor? Yeah, for sure. If you're at Money 2020, please come see us at Booth, SU 13, which is the startup era. But otherwise, tessor.xyz, of course. And in that, by the way, if you go down to the bottom, you can actually reach out to the team and get a meeting going. So do that if you want to talk to us. There's a link to our calendars. You can find us all on LinkedIn and we've all posted at various times. So you'll be able to look up Tesser on LinkedIn and be able to find the people that work there and reach out. or to any of us on LinkedIn as well. So those are some good places to start. Great. Well, Gita, thanks so much for joining us today. Super excited to be partnered with you and the team at Tessor. Awesome.

Thank you so much. Really appreciate Castle Island for believing in us, trusting in us, and getting us up and going. So, yeah, we'll do this journey together. Awesome. Look forward to having you on in a couple of years. Thank you so much. To talk about all the big financial institutions that are using Tessor.

Yeah, for sure. Awesome. Thanks, Gita. Thank you. Thanks for listening to another episode of On the Brink with Castle Island. To learn more about Castle Island, visit castle island.vc. And to listen to all of our podcast episodes, please visit castle island.vc slash podcast or just click on the tab on our website.

Thanks for listening.