🎙️ Ep. 57. Cash App Launches Stablecoins & JP Morgan Goes Onchain

If you're reading this and still haven't signed up, click the subscribe button below!

This week Simon Taylor hosts a conversation with three leaders navigating different layers of the stablecoin stack. Joao Reginatto, Chief Strategy Officer at M0 and former Circle executive, brings deep expertise in stablecoin platform architecture and the evolution from product to infrastructure thinking. Mark Greenberg, Global Head of Consumer at Kraken, offers the exchange perspective on consumer distribution and the challenges of making stablecoins accessible to millions of users. Kevin Lehtiniitty, CEO at Borderless.xyz, focuses on the critical infrastructure layer connecting onchain money with offchain global liquidity - the pipes that make cross-border stablecoin payments actually work at scale.

🎙️Listen to the full episode here on your favorite podcast app or 📷 watch on YouTube.

Key Takeaways

M0 and MoonPay announced a partnership this week that signals a fundamental shift in how the market views stablecoin infrastructure. As Joao Reginatto noted, "Stablecoins are going to be this phenomenon, but not so much because they are products, but more because they can behave as infrastructure. Stablecoins are essentially the next banking as a service layer." MoonPay becomes the third stablecoin issuer joining the M0 network, marking what Reginatto characterized as crossing from "data point" to "trend" territory. The strategic value lies in M0's open platform approach, where issuers can pledge collateral and issue stablecoins as part of a common, interoperable network rather than creating yet another walled garden.

The Deposit Token Versus Stablecoin Debate

JPMorgan's announcement that JPM Coin will operate on Base, alongside their work with DBS on tokenized deposit transfer interoperability, sparked sharp debate among the panel. Kevin Lehtiniitty challenged prevailing assumptions: "People have had this assumption that financial institutions are going to move into stablecoin based cross border payments, and I think that's false. I think financial institutions are going to move into deposit token-based cross border payments." He argued that for banks, deposit tokens are "incredibly" more capital efficient than fully reserved stablecoins because "they're able to now go lend against, generates their normal revenue from."

Mark Greenberg pushed back on the deposit token thesis. "How boring is it to have another walled garden, slightly onchain stablecoin that a tiny group of users can use?" he asked. "We're moving to a world where trust for banks is less...I love the idea that I can hold my money fully reserved and earn the yield off of it, and not have to worry about a bank going under." The argument centered on fundamentally different markets: JPMorgan moves $10 trillion daily in institutional settlements versus stablecoin's $9 trillion annually but growing at a significant rate. As Simon noted, stablecoins solve expensive, slow money movement for the excluded and Global South, while banks solve for their largest clients managing 35 different bank logins.

Consumer Stablecoin Infrastructure Goes Mainstream

Cash App's announcement that ~58 million domestic users will be able to send and receive stablecoins in early 2026 represents an important moment for consumer adoption. Every user receives a blockchain address, with stablecoins automatically converting to dollars on receipt and dollars converting to stablecoins when sent onchain. Reginatto cited what he understood from Cash App leadership: "I haven't seen Miles Sutter from the Cash App team say this, but if he said it, I believe it, because I spoke to him a few times in the past...I think it was something along the lines that if we were to rebuild the Cash App product today, we would build it on top of stablecoins." He emphasized this represents "a first step, and I'm excited to see a product as large as the cash app joining the fray."

The competitive dynamics extend beyond just stablecoin implementation. Greenberg noted the consumer confusion challenge: "Users get confused by the balances they have on Kraken right now, right? You have four or five different stablecoins...but there's probably 10 or 15 on Kraken today, and probably hundreds more coming." The panel agreed on making stablecoins "default behind the scenes" in money movement apps, though they acknowledged the branding challenge ahead.

FX Markets and Institutional Adoption Realities

Circle's unveiling of an onchain FX engine and integration of eight regional stablecoin issuers into their payment network exposed the complexity of competing with traditional FX markets. Lehtiniitty drew a stark line: "If you call Citi and you want to do an FX trade, the trade size starts at a billion dollars. If you're not at least trading a billion dollars in that clip, they don't take the phone call." He argued the opportunity exists in SMB and mid-market segments paying 10-40 basis points on FX, not institutional markets already transacting at one basis point with 99% margins.

Greenberg identified the critical unlock: "Stablecoin adoption, in a much bigger way, comes down to us having viable stablecoins in other currencies." The challenge extends beyond simple issuance. Reginatto pushed back against the "stablecoin sandwich pattern" for cross-border payments, arguing it contains hidden costs and remains "objectively worse than a product like a transfer wise" when examining full cost and balance sheet implications. The real opportunity emerges when "you can continue on this digital transfer all the way from the beginning of the leg to the end of the leg," eliminating the need to off-ramp and convert at each endpoint.

Capital Formation and Platform Strategy

Coinbase's launch of a retail token sale platform and UK savings account (3.75% AER) reflects broader institutional positioning beyond exchange operations. Greenberg reported that Kraken's token sales "saw demand that far outstripped our expectations," though he noted "a lot of risk associated with doing it in the United States right now." The institutional interest stems from "easier access to liquidity, the ability to distribute your tokens to retail and not have to go many layers to do that." However, Simon raised the persistent concern about "institutions dumping their bags on retail" even as consumers gain access to value creation previously restricted to institutional investors. The regulatory uncertainty remains, with Greenberg observing "most tokens aren't securities and probably don't follow securities rules, and so maybe it's fine again, I think more to figure out there."

Thanks so much for reading the Tokenized Newsletter!

Please share this edition or share it with your colleagues if you enjoyed it!

Disclaimers