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Simon Taylor Profile picture
@sytaylor
Apr 21 • 2 tweets • 2 min read • Read on X
Did Circle just declare stablecoin war on Visa and MasterCard? Things never that simple. My take 👇

Stablecoins are THE hottest topic in finance.

- Growing rapidly
- Lots of use cases
- Global regulatory clarity coming

Circle is a leader and wants to consolidate that lead.

- #2 by coins issued
- popular choice for remittance and fintech
- Distribution partnerships with Binance and Coinbase to gain market share

Becoming a payment network is a new path to revenue

- You set rules about refunds, returns and fraud
- You connect merchants and wallets
- Collect a fee in the middle
- It's a model that made Visa one of the GOAT success stories

Stablecoins need a clear winner or interoperability

- Too many coins, too many networks
- Makes a poor UX and limits liquidity
- Lots of projects like Paygrid and Ubyx want to be "Visa for stablecoins"

Can circle be that clear winner?

- Hisorians remember Visa grew out of Bank of America
- Market share matters
- Circle is trying to land grab that now
- If rates come down it would diversify their revenue too

Visa will be fine
- Stables are a new rail
- Visa's strategy is to be the card and Auth link between rails not just their own..

What's your take?

Follow me for more takes like this or head look for Tokenized PodcastImage
More on @TokenizedPod and Tokenizedpod.com

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More from @sytaylor

Simon Taylor Profile picture
Mar 31
A founder sold her startup to JPMorgan for $175M.

The bank thought they were getting 4 million customers.

They actually got 300,000.

Now she's going to prison.

The Charlie Javice story is a masterclass in how NOT to exit your startup... Image
Charlie Javice founded Frank, a financial aid platform for students. By 2021, she'd raised over $20M from notable investors.

She'd even been featured in Forbes 30 Under 30.

JPMorgan saw a golden opportunity: acquire Frank and sell banking products to millions of students.
But there was one problem...

Frank didn't have millions of users. Not even close.
When JPMorgan asked for customer data during due diligence, Javice faced a choice:

- Walk away from $175M
- Create fake customers

She chose option B.
Read 12 tweets
Simon Taylor Profile picture
Jan 12
Stablecoins aren't cheaper; they're better

The mistake is comparing card fees to crypto network fees.

This is Apples-to-oranges (see table).

Stablecoins are now over $200bn.

Here's how they make payments better. 🧵 Image
Visa doesn't move money; banks do.

When you pay with a card, Visa takes 15 cents.

Yet merchants pay $3.20 on a $100 purchase.

Where does the rest go? Image
You're not paying for moving money.

You're paying for managing risk.

What happens if you buy something and need to return it?

The whole industry is built on:
- Checking for fraud
- Stopping money laundering
- Preventing sanctions violations
- Managing disputes
Read 9 tweets
Simon Taylor Profile picture
Oct 4, 2024
TL;DR on yesterday's SWIFT and VISA Crypto announcements

SWIFT announced backward compatibility with their network for banks doing things with tokens.

VISA announced a service that lets banks turn Fiat into Stablecoins or tokens

What's the difference? 👇
The two networks play different roles.

Therefore their announcements fill a different need.

SWIFT is Layer 0 for bank-to-bank payments. It is not a settlement layer; it is a messaging network.

VISA is a consumer-facing brand that unlocks in-store and commerce.

Banks eventually settle via SWIFT or their local central banks.
SWIFT typically

- Does less transactions (50m per day)
- Does way higher volume ($5 trillion per day)

VISA typically

- Does way more transactions (720m /day)
- Does less volume ($33bn /day)
Read 5 tweets
Simon Taylor Profile picture
Dec 15, 2022
If there's a consistent theme in technology and Fintech, it's the low hum of fear.

You're probably reading lots of 2023 predictions, but most explainers miss these key details 👇

1. Financial services is the world's largest profit pool

The prize for disruption is massive Image
2. Banks are making a come back, but it won’t last forever

Banks suffered a “lost decade” after the financial crisis. Now as interest rates rise they’re returning to profitability. Are the good old days back? Image
No.

Most traditional banks trade below their book value and will continue to do so

The opportunity for banks is in niche’s like enabling payments or embedded finance Image
Read 11 tweets
Simon Taylor Profile picture
Oct 11, 2022
Bowing to pressure, Goldman Sachs will no longer pursue checking accounts for the mass market. Bloomberg reports Goldman will also limit their consumer lending but will continue their existing card partnerships. 🧵
🤔 There goes the case study. When pointing at "who's doing something interesting in consumer, every consultant (including me) would point at Marcus.

Amazing resilience and case study in how to do "new" in big org. Reality bites. Massive org w/ shareholders and P&Ls has bitten.
🤔 It was a great strategy but expensive execution. Marcus had three legs to their strategy. 1. Becoming a universal bank direct to the consumer across all product types. 2. Partnerships like Apple Card. 3. Starting to offer APIs to get into Banking-as-a-Service.
Read 10 tweets
Simon Taylor Profile picture
Sep 18, 2022
The average P/E multiple for Fintech businesses in public markets is 3.4x. That puts the Fast .com's 166x revenue multiple from 2021 into a sharp perspective!

So is Fintech dead? I don't think so.
The whole venture and tech sector is down

Of the 124 tech IPOs in 2021, only 15 are above their trading price

Fintech deal velocity is also slowing (h/t @ftpartners)
*Some* Fintech companies burned cash rapidly to compete on who could grow fastest.

With the pandemic and unlimited marketing spend, many hired too quickly, and did so with questionable future business models.
Read 9 tweets

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