The Breakdown - Is Crypto Becoming Fintech? | Nick Almond

Episode Date: February 26, 2026

Crypto and fintech are converging. But who captures the value? Nick Almond on stablecoins, DAOs, and the future of capital formation. As always, remember this podcast is for informational purposes only, and any views expressed by anyone on the show are solely their opinions, not financial advice. – Follow Blockworks Research: https://x.com/blockworksres Follow Nick: https://x.com/DrNickA Follow David: https://x.com/dcanellis — Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/ —-- Timestamps: (00:00) Introduction (01:07) FinTech vs Crypto Today (03:28) Banks Onramps and Walled Gardens (07:53) Where Value Accrues Onchain (16:47) DAS PROMO (17:39) Where Value Accrues Onchain (Con’t) (25:02) Tokens Culture and Market Outlook - - Disclaimer: Nothing said on The Breakdown is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Host and guests may hold positions in the companies, funds, or projects discussed.

I don't think we deserve a full bear market this time. So my heuristic for sort of crypto bare markets is, do we deserve it? Is there enough scam that needs to be purged from the system? And I don't feel like we deserve it this time. For the first time, every previous bear market, I felt like, yeah, we absolutely deserved that. There's too much potential. There's too much moving at the big scale for it to feel like completely hopeless at this point. Welcome to The Breakdown.

I'm your host, David Canales. The following conversation flows on from a recent episode which explored the growing relationship between Crypto-InFintech and the tension over which camp stands to benefit the most as global finance moves on chain. For the best viewer experience, it's worth going back and checking it out if you missed it. And don't forget to hit like and subscribe so you don't miss anymore. And with that out of the way, let's start the show. Nothing said on the breakdown is a recommendation to buy or sell securities or tokens.

This podcast is for informational purposes only and any views expressed by anyone in the show are opinions, not financial advice. Host and guests may hold positions in the company's funds or projects discussed. me is returning guest Nick Armand, their head of governance at the Judo Foundation. Welcome back, Nick. Hi, David. Good see you again. Cool. Okay. So the topic of today is, yeah, FinTech and whether crypto is becoming fintech or the other way around, whether fintech is going crypto. So I suppose a good way to start this is, you know, Solana is so crypto-native and J-DOTE itself is also crypto-native within that context too. So do you feel like you're working in fintech or do you feel like you're

You're working in crypto these days? It's an interesting question. I do feel like Gito feels very crypto to work at. Attitude, sort of the pace, frontier technology. It certainly doesn't feel like what I conceptualize fintech as. Is it getting more institutional? It's more of the conversation becoming about how we interact with institutions and is more of it becoming about conversations around ETFs and ETPs and

and custodial integration, things like that. Yeah, absolutely. There's more of the conversation is increasingly taking institutional form, but it's also, you know, frontier technology. And we're sort of deep in architecting how blocks are built. And it feels very new in that sense. It's new market structure and a new world that we're playing in. But there is certainly an element of the synthesis happening

between the sort of traditional world and crypto. Yeah, and it's difficult because, yeah, the frontier technology thing, by warrant of that definition, you're going to start with a relatively small user base and then have to go out and find new users. And when it comes to financial technology, those users are with fintech companies or with, you know, very modern and technologically progressive tradfi firms that understand how to roll out a very good consumer app. So it's inevitable that you have to, you know, I don't want to say like poach the users of

fintech, but you are playing for the same market. So, you know, when you see fintechs, you know, rolling out their own crypto integrations and targeting the crypto audience, are you kind of looking at that as well? They're coming for crypto users or they are trying to bring. crypto to their user base. I guess it's the question. Yeah, this is an interesting question. I think there's certainly an element of these large banks looking at the kind of users that are in crypto. They're Zoomers, digital natives. Are they using this as a kind of sort of as you mentioned in your speech at the beginning.

Is it just marketing? Are we just, tacking on crypto to access Zuma deposits. I think there's an element of that, and there is a value for them to do that, right, to appear to be a modern bank pushing into frontier technology, and consequently I trust it more to stay relevant. And I think there's an element of that. But I do think even if it is, you know, and comparatively the crypto market's going to be quite small

compared to the rest of their user base, what value are they getting out of it? I think if they're not exploring these kind of frontier aspects of the technology, they need to to stay relevant, right? They're going to be wide open to disruption if they're not playing in the space. So yeah, even if it is a kind of cynical, we're doing it like kind of trendy fintech to look relevant to the kids, it's still valuable for them to be able to play around in this space, to keep an eye on how the industry is going to change, which it will. Yeah, I think to broader point, is the market changing such that the traditional world is going to kind of drown out crypto and all of our original cyphopunk ideals just kind of get pushed away completely? I think it depends.

I think for the first time I've started to see, I think it might be possible. And it means polar, who you had on recently turns out to be right, that we retain our subculture forever status. One of the most heartwarming things are like one of the things that may be the most optimistic that FinTech giants like kind of do get it was, I mean when PayPal rolled out PayPal USD and they first rolled out like crypto support within the app and for I think it was maybe six or eight months, it was a walled garden like it was a closed ETO system. You could get crypto in or you could at least purchase crypto within the PayPal app but you couldn't get it out. But eventually they did roll out withdrawal, so PayPal was then a proper on-ramp for the crypto ecosystem.

And I totally get that, you know, we don't want to say we pick on Stripes Tempo, but Tempo like kind of does represent this next phase of crypto's evolution to where they are integrating more closely with FinTech. And the intention there is that it is an interoperable network and all that's great. That's, that really, it's still really dependent on how, Stripe users will interact with the stuff that's on that chain and whether they do decide, well, it is going to be worth it to use Stripe as an on-rap or it's just okay that I can exist within this network and never really branch out into the rest of the ecosystem. And I mean, to some degree, it's all perfectly fine, but it would almost be advantageous

for crypto to use FinTech as a funnel to bring in, I don't want to say mass adoption, but bringing more liquidity, more usage. And I just, I'm not sure how realistic that funnel will end up being just because of the size of the stripes and the Robin Hoods and stuff like that. And maybe it has a lot to do with how these ecosystems are structured, you know, and going back, then going on to Robin Hood chain, how it's an Ethereum L2. And there's a big discussion over how those are meant to monetize

and really benefit the greater Ethereum network. So I guess what I'm trying to get to is how is it that crypto can really influence the conversation still to the point where there is a motivation for users to not just stop their crypto experience with the stripes and the Robin Hoods and actually go and explore on chain and kind of maximize what they're doing within the ecosystem in that context? Yeah, I think this is it. Do I think that there's going to be, you know, trillions in stable coin liquidity moving into, moving into onto blockchains over the next few years? Almost certainly. Do I think that's going to come and buy people's coins out of the trenches? No. I think there's going to be entirely different channels of where this liquidity flows through. And it's very unlikely that those two worlds will cross over. I think what percentage of the users that come on and end up transacting effectively on blockchains will have that mostly abstracted. Do they even know they're using a blockchain? You know, tempo is the back end. But to them, it's Shopify. And does that mean they're then going to go to a bridge, you know, and bridge into, you know, Solano or onto Ethereum Mainnet?

Probably not. I think it's an entirely different user persona. So will some of it and practically only needs to be, you know, single digit percentages of that for it to really make a big difference in the wider crypto ecosystem. But I think, yeah, largely these two worlds are going to be really quite separate, I think. Yeah. And I mean, I know the last time that we had you on,

we were talking about metrics and everything like that. And maybe a proper framework for understanding where value accrues is, is almost the answer to what differentiates fintech from crypto over the next five or 10 years in that, okay, if most of the value for all of this adoption and this usage is accruing, not even like on chain, but to the actual company that's, I don't want to say like running the chain, but like mostly maintaining the chain and in charge of stewarding the ecosystem. If the value is accruing off chain, then maybe that is more relevant. within the fintech context, because then at least that revenue will show up in their quarterly

earning statements and their P.E. ratios and everything like that. And then maybe if the value is really accruing on chain, then that is how you know that you're operating with a quote-unquote crypto project within the crypto space. Would you kind of vibe with that logic? I do, actually. I think that's a really interesting framing. I think there's, For me, it's about is the money, is the value that's being generated, staying inside the crypto ecosystem. How much of it, I think some of it is, you know, will be overtly exited to centralized, you know, entities. We saw this with Pump.com, for example, for a large part of its life cycle, which has since moved to a more, you know, on-chain value accrual mechanism. But a long period of time, those fees were, you know, in the net.

network assets being put in a centralized entity and effectively completely exited from the crypto economy. Does that make Pump.com fund fintech? Probably not, but does it make it a entity that is effectively extracting for outside centralized parties? Yes. And I think that's certainly more likely to happen in the sort of fintech world, right? So do the validators extract fees on tempo, for example, and take them straight out of the economy? ecosystem or is that value being sort of redistributed back into back into the ecosystem as a whole as a stretch probably the former and we will see you know fintechs necessarily their primary stakeholders are their shareholders which means that they have the mandate and in fact they have

to sort of take that value out of the ecosystem but really I do think a good hook for crypto native finance is one in which that value is redistributed back into the ecosystem certainly a philosophy we have at JETA where any value that is created is redirected back out to to sort of validators and stakers and the ecosystem writ large. So I do think that's a good angle to, it's a good line to draw, if you like, in terms of whether it's a crypto-native project or not. Yeah, and it's difficult because at some point it is just business savvy that, you know, you're talking about reintegrating the value accrual back into the ecosystem.

so you invest in that ecosystem. So it makes sense that fintech companies would create their own ecosystem to which they can benefit the most. And this is really the beauty of open source technology, the interoperable nature of modern day crypto, and that they can do that. No one at all can stop them. And it is really up to the users whether they want to go there

and enjoy that ecosystem in their own way. It's quite difficult to navigate through that when you can do that in every instance where it's possible. So it's like at some point we do have all, you know, let's say tempo is wildly successful and Robin Hood chain is wildly successful. You'll see almost all FinTechs want to do the same thing. And so this element of like the liquidity fragmentation and the capital fragmentation. will only continue to get worse and worse and worse. So as I'm unpacking that, it seems obvious that bridges would be almost one of the most critical things

in actually, like both figuratively and literally merging crypto and fintech together. So then the question then becomes, why wouldn't fintech just make their own bridges? And then, so at some point you're going to have more fintech than crypto natives, especially when you also can see that's the way the venture capital market is going too, that they're funding startups that are servicing fintechs in their quest to come on chain as well. Is that too Duma? Are you worried about that?

Or is it really like a good thing because it just does bring so much more legitimacy to the space and so on? Yeah, really interesting questions. I think we're going to see every facet of this kind. of synthesis happen almost simultaneously. And then it's a question of which of the sort of worlds will sort of dominate. I certainly think we've seen the likes of Coinbase centralized exchange is becoming much more like a bank. We've seen, you know, neo-banks go much more like crypto. And we've seen crypto projects moving into consumer fintech-like infrastructure.

And that synthesis will happen across the board. and you would hope that there will be both offerings on the table here. You've got your crypto-native version of a neobank, which is all about its own crypto assets. The way to get exposure to that project is by holding the token, you know, there's tight value accrual loops that are all sort of crypto-economic and verifiable. And then at the other end, you'll have, you know, your classic centralized fintech that's using crypto rails

to provide new services to their existence. in customers and they've got the mandate to effectively like extract as much value as possible from from the crypto space. So I think will we just end up with more of the latter than the former at the end over time just due to basic market forces? I think it's very possible. I think what might change that is if some of the crypto native offerings win in that market. So they get more users.

they get just because it's more native to the technology, it has more functionality, leverages the affordances of blockchains, simply because the people who've built it know what they're doing more. So hopefully the technology can win out if you like, but it would be a pure technology race at that point. We're winning on UX features and potentially leveraging crypto assets,

in a more native way, I'm not imagining some of these very dusty fintechs. I can imagine them using blockchain technology and gaining lots of power out of the automation potential of it. I don't see them slinging coins around quite as much. So I think where the digital asset native stuff could get really interesting around incentives and actually sort of deep value accrual of revenue

that the app makes could make a huge difference. But, you know, we need to actually crack that first for us to have a chance of winning against the fintechs, I think. Yeah. And a lot of it is just, it's a little bit stuck because of, you know, the Clarity Act and the Genius Act still trying to figure out if, you know, you can even offer yield properly in certain jurisdictions and stuff like that. And that does kind of seem to be the next frontier. And I mean, I don't want to steer this into AI. But it is like the velocity of development within crypto natives can really be so much faster than

Tradfi and even FinTech. And maybe this is a little bit of a tangent, but do you see a difference between FinTech and TradFi anymore? Like I really, I struggled to even really see a big difference there. And it's only because, I mean, FinTech itself also isn't even that old. I mean, FinTech really kind of grew up alongside Bitcoin. in the mid-2010s. But it just, like, FinTech, I mean, crypto is enormous in its own right, but FinTech is much bigger.

So it's, but it just feels like that because, I mean, because we mentioned it before, like Bankston just launched an app and then technically that's fintech. So it's like, I mean, how different is fintech from, from TradFi in your mind, I wonder. Yeah, I've spent more time. in those circles in the sort of last year. And there's more suits for sure, right? There's a different attitude,

different culture. I think certainly FinTech has become TradFi in the sense that most Tradfai has made it to FinTech, if you like. But on crypto narratives, they're about four years behind. So you can see the institutional framing is, institutional are implicitly around stability, things that have hit this kind of mainstream adoption. Institutions are good at working and like operationalizing existing and proven out flows and processes. they're not very good at operating at fringes of new technology and agility and adaptability

and pushing into new and changing territories. Just institutions are almost antithetical to that kind of world. So I think that's potentially where our edge is, right? We are at this era of extremely radical change around particularly where the agent economy fits into this that's bound to happen in the more crypto-native world than it is in, you know, out of a J.P. Morgan spin-out or something like that, right? So I think it will come down to a kind of innovation war. And I think we'll start to see, yeah, new functionality, particularly around the sort of AI and crypto crossover.

the institutions would have no hope of getting to anytime soon. Because there is that lag institutional inertia that slows them down. I don't want to be too cynical, but I have to like unpack this a little bit because, okay, the big these stable coins and payments. And I really understand the utility there. And I understand that users can have a better experience with stable coins than they can you know, traditional bank wires. Like, that's really cool. The margin on payments is still incredibly small. Like, you, you, you, you, you aren't making a ton of revenue processing

stable coin payments. And it is very brand new and exciting because it's a lot of white space that, that fintech and tradfai can fill up because, again, they do have their, they already have users for, for payments. So why not just offer them a new way to do those payments? and then maybe you'll bring in some new users along with it. And they do move quite slowly, fintechs and tradfis, especially compared to the crypto natives like we're talking about. At some point, they'll get to the other side and realize that, okay, all this is not really making us very much money.

That's my interpretation. Maybe I'll be wrong. But at that point, then you will have to find other things to make more money on. At that point, maybe it is reorganizing the initial coin offering market so that TradFi can underwrite those things and make money from it in that way. Is that too kind of bleak in terms of bullishness on stable coin payments and so on? It's a thing that also Ethereum is going through. You are inspiring a lot of activity on this Layer 2 ecosystem, but none of it is actually

flowing anywhere. You know, I just wonder your take on this. So Stablecoin TVL has become a bit of a meme metric as we kind of touched on last time. So it's used as a proxy to understand the value of an ecosystem. So I think the stable coin value beyond fees will exist purely as a kind of proxy for capital potential in an ecosystem potentially. It's also, you know, good liquidity in defy. and it's how much of that is going to be sort of activated

within a kind of liquidity profile of an ecosystem. And it will come down to how much of it is completely abstracted away. And I think there'll be grades of it. I think it's very likely that stable coins is going to happen for most institutions over the next, you know, four or five years. The question is, is, yeah, are they going to make money from it? I suspect they will, actually. I think there's going to be the, once they get the head around sort of global

set and instant finality, you know, all of these kind of affordances, I think we'll start to see an awareness of what's possible, start to permeate through the institutions, and then they'll start to look what's next. And they'll also be in a position to, like, massively double down. You know, this is working. And we could get a kind of escalating adoption purely because it is making. money and actually we can put this much more money in and make more money. And then we could get a kind of a real push into the industry very quickly once these winners are proven out.

Will it move to things like ICOs? Eventually, I'm almost certain it will. I think the whole machinery of capital formation will be reformed completely by blockchain technology, but I expected that to happen five years ago. So, because it needs to be done, right? So, but eventually, whatever the institutional lag is, it will happen.

It's just going to take some time. And, you know, will it, something will have to happen to mitigate, you know, the kind of trust failures of those mechanisms. But there will be a version of the crossover that will happen at some point. Yeah, it just might happen on a much longer time. frame than I think people are aware. But in the meantime, it's going to be very exciting because, you know, I have, I have in my head like two, two big pools of capital. One is the internet

capital markets that are forming and the other is tradfai. And then, so we're watching the internet capital markets get bigger and bitter and bigger. And eventually maybe they'll be on the same stale as both. And then all of a sudden one would just go fump and we'll end up with it all on chain. I suppose stable coins are the first way through that, and that's all very exciting. It just will be very important, I think, that crypto can really go out and tell the story how it needs to be told. So we aren't just, I mean, it's very cliche to say that we aren't just recreating what tradfai is except on chain. And I do think that the technology stacks make that very easy because they are, so different. But it's it's it's it's it's it's how to get through that without just being

aqua-hired by by fintech or straight up bought out by fintech and then it's like well you know what what the future of it is really controlled by the same people who have gone through this over the last decade now with with tripey too. You know it's it's it's difficult. I just I just wonder how long it is. until, you know, not just the GEDOs, but all the different parts of this growing ecosystem, how long is it between we need to differentiate ourselves from TradFi and FinTech to where,

well, we actually need to be FinTech and just own that? Because a lot of FinTech is just, it's very venture-based. It's very, it's very, it's very, it's very, it's very, it's very, it's very, it's very, it's very, it's very, it's very see because there's no tokens in FinTech. This is really the thing. And I would love it to be the fact that all crypto startups will have tokens. I feel like it is going the other way. And throughout the, at least at least the bear market into the start of the next ball market, there won't be many token launches. So at that point, what is it that differentiates crypto from FinTech if there are no tokens? I think there will be. I don't think you can

I think the tokens are such an inevitability in crypto. And in fact, it won't be just tokens. It will be other things that are crypto-nated affordances that will be the differentiator. For example, Gito has a Dow and the protocol is governed in a decentralized way, radically different to anything that would even be considered inside TradFi. this kind of attitude of unilateral control is crucial foundational to as is you know structured compliance and the the real tension will come down to permissionlessness and like there's the features of crypto that are that still remain that really differentiate it it's permissionless finance it has aspects of deep decentralization and has all of this new kind of economic system that is mediated by digital assets. And we've not quite cracked how to do that bit yet, which is why we don't have many sustainable token economies.

And I think the pressure will be on to find that differentiator now, I think. and I think we'll see both in that synthesis new kinds of financial technologies that will come out of the merger that are genuinely new and interesting and we'll do a kind of cultural exchange across the boundary but I think genuinely most of the really exciting stuff will be out at the fringes in people who are explicitly anti-corporate who are looking for something completely new who are doing sort of grassroots, hacker building stuff, outside of the system, picking up a lot of the open source tools that are dropping because of the institutional funding that's coming in

is actually leaving behind a substrate of tools that can be used to create radically new things. And all of that's possible now. You know, all we need is good people with good ideas. We just did a little bit of funding to get them off the ground. And a lot of the problem is the institution, institutionalization has already happened. Most of crypto, the reason why we don't have a

flourishing app ecosystem at the moment is because they've not been funded for, you know, multiple years. We haven't funded DAPs, really, and since the 2018 sort of cycle. So I think largely an institutionalization has already happened. We're already a kind of small subculture of real crypto builders that exist that are making the new stuff.

And I think that'll just continue. I think that dynamic will, my hope is that we find some mechanism for boosting the more grassroots ecosystem initiatives, which again, I think will be a differentiator between no one, like no fintechs have a community, you know, and they don't have fans and things like that, whereas that does happen in crypto. Yeah, and it's, I mean, me and you both, we've been through multiple bear markets and ball markets and this, I mean, it is still very early days. It does feel like a bear market, but this does feel different. I mean, maybe in the next six months, maybe if we speak to it, then we'll both, you know, really see that it is very grim out there. But it feels like, it feels different. It does feel a lot more optimistic of a bear market this time around. How are you feeling about that?

Yeah, my theory on this is it's by a market starting to get priced in. People are starting to accept. You know, I've heard more and more people say, it's a bear market, and we've kind of tacitly accepted that it's happening. I still think it's a bit touch and go. I don't think we deserve a full bear market this time. So my heuristic for sort of crypto bare markets is, do we deserve it?

Is there enough scam that needs to be purged from the system? and I don't feel like we deserve it this time for the first time. I think every previous bear market I felt like yeah we absolutely deserved that whereas there's too much potential there's too much moving at the kind of at the big scale for it to feel like

completely hopeless at this point which is normally what a bear market feels like so yeah I'm not convinced we're going to have a multi-year full doldrums bear market I can see us bouncing out of it soon. Yeah, it feels like price discovery. It's always a cop out to say, but literally, it's not just a meme this time. It does feel like, okay, we just need to take a step back and understand how to value these things

and maybe not lump everything together into one bucket and really kind of differentiate everything. There's much more diversity in the market now, and there is assets that are very close to having like a genuine real value based on their sort of revenues and how well they're connecting the sort of that revenue to the to the asset. There's some, we're getting close to like true value of quite a few assets in crypto at the moment, which yeah, I think it's right, a bit of real price discovery. And I think that's where it's more closer to like, it's like a consolidation rather than a bare market at this point.

Yep. Let's leave it on that hopeful note. Thank you so much for joining. us again, Nick. And I'm sure we'll have it back again soon. Thanks. Cool. See you later.