On The Brink with Castle Island - Stepan Simkin (Squads) on Stablecoin-Powered Financial Services (EP.688)

Episode Date: December 1, 2025

Stepan, founder of Squads, sits down with Wyatt on today's episode. In this discussion: Squads' evolution from a DeFi-facing product to servicing a broader range of companies' asset treasury needs. What are the pain points of local small-medium businesses? What is driving the gradual global movement from local currencies into USD stablecoins? The appetite for safe yield across user types. Other traditional digital banking players and how they are evolving with technology. How the stablecoin trend impacts governments. What happens to local banks?

Today, I sat down with Stepan Simkin, the founder of Squads. Squads started in 2021 as a multi-signature wallet product, effectively a crypto savings account for Solana-based protocols and companies. Over time, the company has evolved into a much fuller financial platform, serving the Treasury and financial operations needs of a significantly wider set of global customers using stablecoins. Today, that broader business finance account platform is called Altitude, while Squads, continues on as the original crypto-native account for protocols.

Stepan and I discussed the company's evolution into being a financial services provider, how stable coins are changing banking, and the impact on global currencies. I hope you enjoy our conversation. Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guest and hosts may maintain positions in the assets discussed on this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific

inducements who 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 liquidated. 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 into 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. Stepan, thanks for sitting down with us today. I want to kick off with how do you describe squads and how do you describe the company you guys are today? First of all, thanks so much for having me. I think the way we described the company because of old over time, just like we evolved and the industry evolved as well. The way we think about squads today is we're a financial services company. That is a very short description. And then a longer one would be where a stable coin powered financial services company, building infrastructure and services layer for the stable coin economy. And yeah, I'm excited to

dive into what that actually means on the podcast today with you. How do you map who you consider to be the other core players in stable coin stack or who else do you rely on? Because you have issuers like a circle or tether. And then you have other custody providers like maybe an anchorage who are also in the banking space. or fireblocks. So where do you be like you guys sit and what do you think are the important businesses at a high level longer term? So when I think about the stack, you have more the regulated and the more Fiat connected part. So that includes issuers, that includes orchestrators, that includes card providers and card assures. That's one bucket. Then you have the custody bucket, which like you

mentioned, there's Anchorage, there is fireblocks, there's coin based custody, there's all these players. And then I think where we exist is on one hand, we're essentially even a lower level, even closer to the chain, because we are building programmable account, programmable wallet infrastructure that is directly connected to the blockchain. Obviously, I'm biased, but I think if you also look at the market today, the orchestration part, for example, gets commoditized relatively quickly at this point, while the real sort of knowledge and expertise is how do you build on top of the table coin rails on top of the blockchain? in a way that actually converts to real business outcomes that is secure, that actually allows you to take most out of this new financial infrastructure. And so I think the closer you are to the source, the more valuable you are in the stack. But it's also important to mention that just that layer is completely useless, at least to the current state.

So we need all the layers. You also have, we can talk about this command of as well, which is like its own layer. You need all the layers today. But I think from a long-term perspective, the way I think about the stable coin space is that we should all be our North Star as an industry, a subset of crypto, should be anti-stable Coat settlement because the way the market is structured today is that we're using all these intermediaries, again, which are amazing companies, amazing businesses. But when I'm thinking about stable-point backed cards, the amount of intermediaries, the fees in the middle, the complexity

that we're enduring just to get to the same state, basically where I can tap the phone at the point of sale and buy a cup of coffee. I think I should be scanning a QR code and doing a single transaction on chain from one account to another, and that should be the settlement, as opposed to doing all this sort of jiu-jitsu with seven different vendors in the middle, a lot of them being the old vendors and using legacy tax stack to, again, achieve sort of the same outcome we have today on Webterails. Yeah, it makes sense. And you are obviously coming from the Solani ecosystem where you have an environment that is built around seamless money movement. So it makes sense. To that point, I wanted to ask you, because I know you guys started, I'd say predominantly,

it correct me if I'm wrong, but as a multi-sig product facing custom, casting assets for protocols in that ecosystem, was the move to being a stable coin-centric financial services provider proactive from you guys, or was it something that the market and customers push you to do? What we started with, the way we think about it now in hindsight, is we first had to build this capital aggregation layer, which is the protocol, and the way it happened is we had all the demand from crypto-native companies and protocols. that wanted a secure account on chain

where they can store their assets and then manage them with different workflows. What were they doing before? It was a mix of CLI wallets, single essentially like a ledger, like a cold wallet that they would manage the authority with. And so there was a lot of duct tape, basically, and they didn't really work.

When we actually entered the market, there was plenty of competition. There were different multisigs that were being developed. And the way we always thought about this chapter of our company history is that this is the first stage. This is a very, crypto-native focus and it allows us to create the secure foundation that today we think about

to a crypto company, what we have on the protocol layer is a multi-tech, it's a smart account, to a non-cryptanative customer that we're interfacing through Altitude, which is our business account product. Squad Protocol is more of a bank and PSP. It's a protocol that allows to create an account with store value. There are different permissions that you can create around how that value is going to be managed. Then there's different workflows you can apply.

And so it really depends on who you're interfacing as a customer, but the stack is that versatile, right? that it does very simple things. You create an account where you can start and chain assets and move them around. Yep, understood. That makes sense. And who are you serving when it comes to non-crypto customers or how do you interact with them differently? What makes them come to you guys? So I think one interesting distinction is that as we launched Altitude, which is our business account, which one way to think about it would be that if Multisig is very crypto-native, Altud is very much looking at serving traditional businesses and traditional operators. Because even in a crypto startup,

One of the reasons sort of Altru really came about and we decided to make this push and build out those products is because we would have a customer on the multisex side. We originally onboarded them by interfacing with the CTO and with the development team and maybe with a CEO. And then at some point, as these project matured, they started having CEOs and CFOs and they started having foundations and thinking about accounting. So you grew with them in a way. Exactly. Yeah. And then at that point, you have a CFO who never touched the ledger, who never signed a. the transaction in the blockchain, and now they're tasked with managing corporate finances,

essentially, regardless of that project being attached to crypto. And so even within a crypto startup, there is very traditional on Web2 side to a lot of these businesses where they need to do all the regular things. They need corporate cards for expenses when the employees travel. They need to reconcile the ledger and essentially file taxes, and they need to make payouts in stablecoin or fiat. And so that is where we are very much today. we're onboarding crypto businesses, but from a very different side.

And then the altitude is a permission of product, like anybody can apply and get verified. So we are seeing inflow of businesses that we didn't expect to others. Like there's corporate services providers, law firms, and a lot of them are based in offshore jurisdictions. A lot of them already service crypto businesses. And so the way to think about our ICB today is if you're already one way or the other exposed to stablecoins and you're looking for a better solution to manage your financial operations as a business, and those operations include stablecoins, this is where you come to us today. But I think as we expand, the idea is that obviously we want to democratize access to

really high-quality premium-grade fintech in places where there's just no fintech system at all, either because there's just no tech broadly in that geo, or because it's just non-viable from economics perspective to go on board customers with low median flow and low card volume spans. But I think because we're doing it on these different rails, the economics become very different, right? Because for us to go to a new jurisdiction and serve a business customer, we don't need to now obtain all these licenses and invest that much capital and time to actually expand because we're doing it in a self-custodial way in relying on this sort of new financial infrastructure. So the way you guys map it is you have squads, the traditional product,

which call it is a crypto custody product facing, Russians say custody, but crypto wallet product facing crypto companies. And then you have altitude, which is a stable coin dollar savings product for companies, which might be in crypto others that may not. That's correct. There's a couple of cabinets. The way you think about multi-sick is like it's a treasury product that's a small product because it is not custody. It's self-custody. So we're not actually taking custody with funds. But the ethos of the way we build products, the way we build infrastructure is that we're making self-custody feel like custody. You should be able to still recover your account. There's different ways for you to do two-f-a-fay and essentially for your enterprise to interact with the sunshane permissive. And so that's on the multi-stakes side. On the altruist side, you're exactly right. But we strongly believe that stable coins are not just about dollars. We need all major currencies to be tokenized if we're really expects the sort of fintech to move on these new financial whales. And so today we have used in euro.

And as we're progressing, we're going to be expanding to major currencies, I guess, starting with pounds and hopefully Singapore dollars if you can find the right provider. And then there's BRL and XN, which also are in high demand at this point. Yeah. And you mentioned a couple of points I want to touch on. One is on the altitude side, do you expect your customers to save money in the currency of the country they're in? Do you expect Mexican customers to store in Mexican pesos and British customers being great

British pounds? Or do you expect that US dollar stable coins will be an asset that people save in outside? I think from a business perspective, there's going to be always important. I think that, like, for the altitude customer, they're going to keep in dollars, right? And they're going to probably opt in to earn U.S. treasury yield and then earn yield on dollars through Defi and we're about to announce a couple other yield integrations as we progress. But I would say a business has obligations usually in different currencies. You have contractors around the world, you have employees, you have different vendors you need to pay. And I would say from that perspective, the reason we

believe in non-Uddd stable coins is because maybe even if your treasury is going to be in dollars, you still need to do some payouts at the end of the month in pounds. And so the idea is that because we're doing this on purely programmable rails, you can have just in time effects on chain for when sort of it's the best price and then go deeper into exploring what the genetic finance could mean, an agent managing your altrued account will be able to do that effect scheduling essentially for you and then settle your obligation when that needs to happen. And so from that perspective, we think you do need to solve that last mile use case because right now you have all these different orchestrators in different countries where they give you just in time effects for when

they're actually doing the payout. I think if you're a consumer, that's probably okay for you because you're just withdrawing from your dollar savings account, you withdrawing for your local link account because now you need to pay some bills or you need some obligations locally. For a business, I think that's a very different story. You don't want to find out what FX is going to be at the moment when you have to do in the payout. You want to hedge that in advance, particularly if you know that you're going to have these obligations, you're going to have to meet in that currency anyway. You want to hash that in advance and then pay one to one. And that also allows you to make sure that you understand exactly what your costs for the payout is, as opposed to getting this variability

just in time when you actually need to do the payout. Do most businesses that you work with have a pre-existing bank account, or are they establishing their financial footprint for the first time with you with altitude? I think right now, definitely they all have some form of a bank account. For example, obviously, UUS has really well served in terms of fintech, particularly for businesses. The existing solutions don't really give you great stablecoin focus workloads, so that's why we're seeing a bunch of customers come in. And then also, any good head of ops should diversify. Definitely. You should have multiple bank accounts. You should have multiple options to do the payouts, right? And so that is our kind of wedge in, both on the stablecoin side. If you are dealing

with stable points, we're going to give you a better solution than existing solutions in the market, or you just need to diversify. We're a great option. Definitely in the future, we would love to essentially enable net new customers that didn't really have access to banking or had access to very old legacy rail banking using UIs from 1990, now actually getting access for the first time to a great fintech experience. That is with all the two of the products. And to your point, What businesses do you think benefit from the entry of something like altitude the most? Right now, it's probably two buckets. If you're touching stable coins and you want to do, you want to do atomic workflows, like for example, you have, you're looking to move your workforce

onto stable coin rails. You want to pay your contractors and employees through stable coins. Why is that most of the time when you see it? Is it because they have global employees or what's the push there most of the time? Correct. They have global employees or, for example, they're already doing it in stable coins, but it's always. over the place. Like somebody wants to get paid out through Tron, everybody has a different wallet, and it's really messy. But because you have a global workforce, they already prefer to get paid in stable coins. And so that's like one example where if you want to streamline that experience, we're going to give you the best way to do this. I'm already touching stable coins bucket.

Or, again, there's a lot of businesses that some customers paying them or some vendors paying them in stable coins and they need a reliable way to receive that payment. Maybe they want to keep a portion of that to earn yield and they want access to better yield opportunities. and then they want to do the payout at some point into the bank account. So that's one bucket. I'm already in doing something with stable coins as a business, and I'm looking for the right solution. I think the second bucket, which is we are looking to expand that as we sort of progress,

but I don't really have a proper bank account experience for whether I'm a merchant on Shopify. There aren't that many options for me, other than using the actual storefront platforms like Shopify themselves, like we should give you some financial features. But then again, there's a lot of geographical innovations. And we are seeing a bunch of employees from that side. I think the second bucket would definitely will love to see grow, but I understand the first need to solve

the very core, and we actually need to, there's a lot of features we're shipping right now, which we consider just to be table stakes, whether it's the CFO stack, accounting, bill pay, invoicing. These are not things we're innovating, but we're putting them on table point rails and giving you exactly the same experience you'd expect, but without actually touching the legacy tech stack.

And then there's a lot of room for innovation, whether it's giving access to, you know, internet capital markets, or different yield sources and different automations and programmability that you can essentially enable when you have an operations person running that account. And so we are really happy that we have this group of 500 to 1,000 customers that already love squads, love the products, really trust us, trust our infrastructure that are willing to give us the benefit of the doubt. As we're essentially

building out business banking solution without the bank, we're super grateful for and we definitely don't want to accelerate too far and too much right now because we think that the motions we're seeing right now are valuable to actually get to the right end state of what this product should look like. It's interesting you mentioned the behavior of a lot of your customers is using something like squads for yield opportunities or they'll store money in U.S. dollar stable coins because they can earn U.S. treasury rate on it or presumably even invest in some kind of other product from that experience because I think you hear about people where they're in a country with high inflation and they move into U.S. dollars because it's just a better store of value and a little bit less about

that treasury behavior and they're different behaviors. So I did want to ask you, there's currency flight in the traditional, like, oh, move to stable coins because it's a better alternative than the domestic currency. But do you think we'll get almost an equal measure people who move on to stable coins or U.S. dollar stable coins as a rail because they just think of better financial opportunities and that becomes almost an alternative form of currency flight that's happening? Yeah, it's not really good. And I think if you listen to interviews with John and Patrick Collison back from like 2021, where

they would talk about how they obsess over how much literal friction there is in the world and how removing that in software, like solving the very little things and thinking ahead about what the user journey might be and like where they want to click, giving that information earlier. This is the level of obsession we got in Web2 and then SaaS. And now we're getting to do that in essentially financial infrastructure. And so even if you think about access to yield, like even if I'm as a business can access the same yield opportunities and I have enough access in Web2 Rails. and I'm getting access to the same opportunities through stable coins and essentially

public-chain infrastructure. Even when we talk to customers, the idea of just daily liquidity, the fact that you can withdraw in seconds and you can deposit in seconds, there's no T-plus-1, there's no T-plus-3, even that's a huge appeal for D-FI. That also, by the way, when you think about the businesses assessing risk and thinking about, okay, am I going to go into the D-FAR protocol where I get six or seven percent yield, but where I can withdraw any time, or I'm going to go into some structured product that the bank is offering me, where I'm locked in for 30 days, I don't actually control

this relationship. A lot of the businesses are choosing to go into defy just because that idea of pure efficiency, that it's one click away and it's pure software. There's no human in the middle managing this for me. Even from that perspective, it's a good example of where I think, also, I heard that before with people saying stable coins are going to be irrelevant in the US. They're only going to be irrelevant in places where you have people trying to move to dollars because they don't trust local currencies. It depends how you sort of view stable coins. I really think that stable coins are it's just the new financial rail. It's just superior infrastructure.

And I think over time, everything's just going to migrate over to these new rails. I don't think it's going to be on a single blockchain. I think it's going to be a network of blockchins. But it is an inevitable future. It will just take a while. It will take maybe five to 10 years to fully get there. But it's just a natural evolution of where we're going. And so I think even in the US, you're going to see financial service company ours

just build better products and better experiences where customers will like, well, they're giving me exactly the same thing. but it's better, cheaper, faster, doing it with stable coins on chain. Why don't I just go there? Well, you see the demand for instant with Venmo or Robin Hood, because the revenue that PayPal and Robinhood do from the instant payouts, where they charge 1 to 3 percent, is incredibly meaningful. I think it's a natural human behavior. I know there's a couple of wallets in the salon ecosystem that one of the main revenue drivers is instant unstaking of Seoul, and it's the idea that you don't want to wait 48 hours or whatever the 24 hours. I want this now. The same goes for even

phantom swaps. I can go to a sec two more clicks. I'm in Jupiter directly. I don't pay the point 85% fee, but it's just the pure efficiency and the speed. I just want this right now. It's relevant for consumers, relevant for businesses. And I think, again, just the more programmability and the more pure software you have when it comes to managing money, the more you can deliver those experiences. And so I think it touches businesses, touches consumers in a similar way. Thinking about this need to have relatively quick transactions, the fact that you guys have customers who store money in U.S. dollars and other currencies, are you by nature a believer in non-US dollar stable coins being at scale? Because seemingly in that lens, it might make sense that

you need to have Mexican pesos on a blockchain, you need to have euros on a blockchain at scale. But it hasn't happened yet, which I think is interesting. I think it's going to take a while. I definitely believe in non-usible coins. I think we're going to see at least all the major currencies it's tokenized because stable coins, it's a movement not about dollars. It's a movement about just better, more efficient technology. And then if that's your thesis, then why would it stop at dollars? If I'm trying to build a better financial services company in Mexico and I want to deliver better experiences for my customers and blockchain and stable coins allow me to do that, I'm just going to move to those rails. The companies are best positioned to do these

tokenized currencies are the orchestrator because we've seen an example of this, right? Like where you have different tokenized currencies on chain without the, orchestration component. And I think that is useless. You need that to be a virtual account so somebody can pay in. I can receive the value in stable coins on in that native currency and then be able to do the payout. You need both. And then over time, that one is much harder to solve. You do need also be able to spend on the card because right now all the table coin back cards we have, there's FX rates all over. If they're issued out of Hong Kong, if you're spending them, you know, if you're using to spend anywhere outside of Hong Kong, you're paying the FX fees.

same goes for if you're doing it in the US and so on. So that is definitely going to happen if it's going to take a bit more time. The way, at least we're thinking about it right now on altitude, we're going to be supporting multiple payout routes for using local rail. It's going to be sort of BRL,

MXN over time, where you do SEPACH for dollars and euros. And I think where we'll see most demand, this is where we'll lobby for essentially having this currency tokenized. Because for our customers, it is the way we think about the business use case, you do need to do FX hedging,

FX forwarding. And then I think in some cases, there's interesting yield opportunity. When you think about different government bonds from emerging markets where it's higher risk, but higher reward, we're going to see that as well. The next major tokenized currency will be one of the sort of let down ones. I'm pretty sure. I know bits of doing some work there. I know there's a couple of companies trying to do a general purpose, BRL or an Excel

stable coin. I think we're going to see that first before we see anything else. And why do you think that U.S. dollar stable coins have had the incumbency that they've had? Do you think it's a result of lendiness where it started working early on and it just continued to because of momentum? Or why do you think that paradigm has taken shape versus an alternative, more diversified set of on-chain payment products? Look, I think we, at least today, we still live in a dollar denominated world. When you're thinking about the value of your assets, you think about value of assets you don't own yet, you're really thinking in dollar terms. The way stable coins came about, and I know you guys talked about this at length on the podcast as well,

well. It started from sort of technological changes. And again, this was about how do you trade against another asset. And so I think it's natural that we started with stable coins. Also, majority of the innovation around stable coins and fintech generally is coming from DOS. So it's natural that dollars are there first. But as you know, the technology can use to propagate the growth different jurisdictions will definitely see more of these come about. I live in the U.E. I also think in dollar terms. I don't think in, Deercom is not how I evaluate my financial life and wealth. And I don't think in our life. that's probably going to change that much. But at least from a technology perspective, from

usability perspective, we're going to see more of these currencies. And I do imagine dollars will stay very much dominant, but we do need the other currencies to exist as well. Yeah, it's one thing to have the mental model. But when people have access to dollars globally and that continues to expand and access to U.S. Treasuries, financial products from other countries, do you think that destabilizes other currencies or even other financial products, other treasuries? To an extent for sure, from like a saving perspective, because at the end of the day, you're still going to have local obligations that you're going to have to meet in local currency, whether you're paying rent, you're paying utilities. Most likely you're still going to go into your local currency, but from a saving perspective...

You don't think those can be disintermediated? They can. I think they technically can. Also, keep in mind, like, in a lot of these places where the local currency is really weak, there's also great risk of government control and currency controls that can really prevent that happening. And so I think that is much more of a regular question than it is a technology question. And again, if some of these companies actually adopt dollars as like, look, we're just going to live on dollars now. I think this is where you're really going to see, you know, the shift happening. Like, some of you glad I'm economy already live on UDT and they're really happy with it. We'll see how that evolves. But I think it's a bit too early to tell.

But I am kind of excited to see where this goes. And I do think dollar dominance is not really going away in time soon. Do you think that other banks, but even, let's say, other neobanks, will move into offering comparable services to what you guys do? Absolutely. They already are doing that. I think the interesting component to this is they have to honor the legacy tech stack. They have to maintain it and they have to figure out a way how to connect it to systems.

And that, on one hand, gives them a bunch of opportunities. They already have a lot of the licensing and the regulatory status. On the other hand, that makes them much slower. and this is where we have a real opportunity, but the opportunity is not there forever. Do you have to accelerate. And the ones that are the most successful, it's going to be the ones that realize today

that we're going to have to rebuild majority of our stack from scratch, and we're going to have to figure out how to the existence of stablecoin world, as opposed to saying, oh, it's a short-term trend that lets adopt it in some shape or form to stay in a board meeting that we did. And so I think whoever treats stablecoin seriously today and invest in the buildout,

like Stripe is doing a great job at that. whoever recognizes that this is the future technological rails, or at least believes that there's a really high chance of that happening and invests heavily in making sure that they don't miss that trend. I think that will be really successful, and they will be the most interesting and serious competitors to what we're trying to do here. But we're coming from a completely different entry point where our problems are much less about how do we solve self-custody security, recovery, how do we build a fintech experience of stable coin rails? Our questions are, what is the minimum viable regulatory stack that we need to build, which license that we need to get.

It's just very interesting to see this evolve, and I think there will be a natural equilibrium that we're going to see. But some of these major fintic companies will be just displaced by tablecoin for those businesses because of sheer speed and efficiency that you can gain by building on stablecoin rails. Well, it feels like there's an innovator's dilemma as well. These banks are just not going to be compelled to move into areas that are first off, in some way, it's just not quite as safe from a regulatory perspective, looking forever forward at the same time, not necessarily serving their core audience. It feels like they'd have to, like, go out on a limb to make this their core business or core offering. From a regulatory

perspective, that's the big aspect. But even if you think about it, majority of the traditional financial system, the way they make money is on the inefficiency, is on the slowness. If I'm paying you in 30 days, why am I paying you in 30 days? Like, why am I stopping this in 30 days? because I'm earning yield on the float while the delay is happening. That is my business model. And so the moment you're saying, like, well, it's just going to be self-custody, instant settlement, substantial actions. You're like, well, you're killing my business model.

And that is like the chart of when you let technology into a market, the price has collapsed. There's education that's going up and like all those things where the government's involved, for example, and then you have TVs that are becoming much cheaper, you know, year by year. I think the same thing here. You kind of let technology really go much deeper into the market. you just collapse all of these business models and prices. And for a lot of these businesses, they can't really imagine, they don't want to believe that this technology is that conformative

because, again, it kills their business. And it's really hard to say, oh, I'm just going to rebuild everything from scratch and reinvest in this when you're feeling good and cozy in your current situation. Yeah, it's funny. On the East Coast in the U.S., we have two trains run by a company called Amtrak. One is called the Excella and one is called the Northeast Regional. And they're very similar. The Excella train is slightly nicer, but more importantly,

it's always on time. And the Northeast is delayed all the time. And so this is the analogy I use some time, is that they can charge more for the Xcela because if you have to be on time, you have to take the Xcela. So it's like... It's a good analogy. Right, exactly. It's why would they give away when they can charge for a premium instant payment experience in comparison to a slow one? Do you think local banks can survive in this paradigm? Or do you think digital banks and even say incumbent banks take away market share? I don't live in the US. And so for me, because I travel through Europe, I spend a couple months a year in Europe. I live in UAE.

I don't really think the concept of local banks is at least very familiar to me. I think in the US, you have a lot of these smaller banks that have existed for a while. And don't think a bank is an actual business you can go into. I don't think in the EU at this point, all the credit regulations, like starting a bank is even a possible opportunity for anybody, even if they have enough resources. In UAE, obviously, a lot of major, larger banks that can run everything. And I do think the barbell is you're either going to have these giant banks or really cutting-edge in the innovative of, you know, fintechs. If it's a bank that is embracing innovation, we're seeing more of that happen in the

now. You have new bank charters being issued to very take forward banks that are trying to adopt stable coins from the start. They're trying to be both the bank and the fintech. I think those banks will do really well. Without Cross River or lead bank, we wouldn't have a lot of innovation we have today. And so I think it just depends on what kind of, because I'm sure lead bank is not the level of JP Morgan, but the way they're building their business is fantastic because they are adopting all these new technologies and working with all these new providers to essentially allow banks to participate in the innovation. And I think those banks will do really well. Yeah, it's funny. What I've seen behaviorally from the regional banks in the U.S. at least is they'll be really entrenched in a very specific business for a long time. So it'll be something like we serve manufacturers in Cleveland, Ohio, and they'll do that for 75 years until they realize that they literally cannot survive anymore if they don't adapt. So then it'll be like, okay, now we serve cannabis companies. They go all the way out on the risk curve. And then they'll do that for however long they can. And then recycle. And in 75 years, they serve only whatever the regulatory dangerous.

the situation or the emerging market is in that case. But to your point, we've seen these companies serve crypto as a result. Absolutely. But that's why you have to try to think I've had long term. Don't try to react in the moment because things are not working. Like, I think it's thinking about where this is all going. And I think banks and finance is becoming much less local because it's moving on, it's now on internet. It's not online. And that is kind of naturally becoming more global. And so I think from that perspective, it used to make a lot more sense like it's a bank that would know me. I live the same place as it exists. That made sense, I think, some time ago

or past those days you're going to have to figure out how you're going to specialize. The location itself, I guess, is not enough anymore. Who is your guy's future customer set in your mind, ideally? If you're running your business online, in the long run, we want you to be our customer.

Whether you're building a startup and you're selling software or you're selling goods and you're a merchant. From a startup and SMB perspective, If you're doing stuff on the internet, we want you to be our customer. But again, we're talking specifically for two businesses now. From an enterprise side, there's a lot of demand we're seeing,

we're spending a lot of time with larger enterprises who are thinking about treasure management with stable coins. Interesting opportunity that we're still exploring, but there's definitely a lot of room to improve there. Because if you're like a multinational corporation, you have 40 entities around the world. If you're like at Apple scale, you'd have an internal bank, the bank's a dedicated company that has all the bank relationships,

all the bank accounts that is doing essentially, its only purpose is to do treasure management. The fact is having all the things we talked about here. I think moving that on the stable coin rails is like a very, from a sales perspective, it's actually a very easy motion once you do the work because you can say, look, here's how much you're paying and SWIFT is now.

Like, here's how many banking accounts you have to maintain. And here's how much it's going to cost if you move all of that on the stable coins. I think that is a powerful exercise. And we're already seeing Stripe themselves are doing that, right? I think they were talking about it. There's, to an extent that SpaceX was doing that with Bridge in the early days a few years ago, and I think they're still doing it.

we're starting to see elements of that, but there's a great opportunity for some like us as well to come in and Palantir style say, okay, what is your current banking setup? Let us map all of it onto stablecoin rails. And even starting with intercompany obligations, right? You'd have a subsidiary in Ireland that owns the AP. You're going to have to pay that every month or every quarter you pay royalties. Do that in the stable coin. Settle those obligations internally, 24-7 instantly and for free instead of moving money through the banks when you just need to settle internal obligations. Yeah. Oh, complete resonates. I think. that visual you paint of showing people just how much the like-for-like costs is insightful.

Well, Stefan, it's been a pleasure hearing some of your insights, especially from the experience that you have day-to-day looking at the emerging big banking space, I would call it. But I wanted to ask you, if people want to get in touch, people want to use altitude, learn more, what's the best way for them to do that? Who can get in touch with you guys? Who can explore being a client? Anybody who listens to this conversation and either has any ideas, feedback, or wants to be a customer, You should DM me on X. My DMs are always open. It's ad.

Simkin step on. Let's talk. I'm excited to hear more. That's true. Founder-led outreach. Just get in touch with you and learn about altitude. Well, thank you again. I hope to have you back on at some point and congrats on everything so far. Thank you so much. Thanks for coming. 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. dot vc slash podcast or just click on the tab on our website. Thanks for listening.