Key Takeaways

• Payment systems offer numerous layers for innovation beyond just transactions.
• Cash App leveraged existing infrastructure to innovate instant payments.
• The US dual banking structure fosters fintech innovation through diverse competition.
• Despite robust infrastructure, the US lags in payment performance among developed nations.
• Successful financial products enable faster and cheaper transactions.
• Stablecoins are poised to become a significant payment rail over time.
• Current stablecoin use is largely limited to trading and DeFi, with untapped cross-border potential.
• Regulatory changes will be crucial for the stablecoin space’s long-term success.
• Businesses’ approach to stablecoins is heavily influenced by regulatory perceptions.
• Stablecoin activities are viewed as riskier by regulators compared to similar non-stablecoin activities.
• The fintech landscape is shaped by the efficiency and cost-effectiveness of financial products.
• Stablecoins’ future hinges on regulatory developments and market adaptation.

Guest intro

Zach Abrams is CEO and co-founder of Bridge, the leading stablecoin orchestration platform that was acquired by Stripe for 1.1 billion dollars in 2025. Previously, he co-founded Evenly, which was acquired by Block (then Square) over a decade ago, and he has worked at portfolio companies including Airbnb and DoorDash. Under his leadership, Bridge has become instrumental in enabling faster and cheaper cross-border payments through stablecoin infrastructure, positioning the company at the forefront of reimagining global financial services beyond traditional banking rails.

The potential for innovation in payment systems

• Payments involve complex layers that can be innovated upon beyond just the transaction itself.

  — Zach Abrams

• Innovation can occur at various levels, including the money storage layer.

• I would say the thing about payments that is so interesting to me is that you have so many areas where you can be creative and find new solutions… it could be at like actual the money storage layer.

  — Zach Abrams

• Understanding these layers is crucial for fintech advancement.
• The multifaceted nature of payment systems offers numerous innovation opportunities.
• Recognizing where innovation can occur is key to navigating the fintech landscape.
• The potential for innovation extends beyond simple transactions.
• Payment systems’ complexity provides a rich ground for creative solutions.

Cash App’s innovative use of financial infrastructure

• Cash App succeeded by utilizing existing financial infrastructure for instant payments.

• The way Cash App built their product was by taking advantage of a debit card refund so everybody in the US had a debit card and you could refund money to a debit card which then immediately credited that balance back to your bank account.

  — Zach Abrams

• This approach highlights the importance of regulatory and infrastructural innovation.
• Cash App’s strategy showcases a new payment experience within traditional systems.
• Understanding the limitations of traditional US payment systems is crucial for innovation.
• Cash App’s model demonstrates how existing infrastructure can be leveraged creatively.
• The innovation lies in navigating existing systems to offer new solutions.
• Cash App’s success underscores the potential of infrastructural innovation in fintech.

The US dual banking structure and fintech innovation

• The US dual banking structure promotes a diverse and competitive banking ecosystem.

• In the US we have this like dual banking structure where you can be a federal bank… this dual banking structure has multiple different regulators and the net result is that it’s a lot easier and permissive in the US to create banks that operate at different scales.

  — Zach Abrams

• This structure fosters innovation in the fintech sector.
• Understanding regulatory differences between the US and Europe is crucial.
• The US environment is more permissive for creating banks at various scales.
• Competition and innovation are encouraged by the dual banking structure.
• The regulatory environment plays a significant role in fintech advancement.
• The US system contrasts with more centralized banking structures elsewhere.

The paradox of US banking infrastructure and payment performance

• The US has robust banking infrastructure but poor payment performance.

• You know, I think everybody around the world can see the cons in the US where we have some of the most robust banking infrastructure in the world yet some of the worst payment… and lowest performance payment rails of any… major developed country.

  — Zach Abrams

• This paradox highlights the need for improved payment systems.
• Despite strong infrastructure, the US lags in payment efficiency.
• The gap between infrastructure and performance calls for innovation.
• Understanding this paradox is key to addressing payment system challenges.
• The US payment performance contrasts with its banking infrastructure strength.
• Improvement in payment systems is necessary despite robust infrastructure.

Traits of successful financial products

• Successful financial products enable faster and cheaper transactions.

• The commonality across all of them whether it was square or coinbase or you know brex or what have you all of these products were made financial sense and so that by that I mean they enable the payment or some type of functionality to happen faster or cheaper and they did it in a way that was much more durable.

  — Zach Abrams

• Efficiency and cost-effectiveness are key to financial product success.
• Understanding these traits is crucial for evaluating fintech products.
• Successful products share a common framework of efficiency.
• The competitive landscape in fintech is shaped by these traits.
• Durability and cost-effectiveness are essential for product success.
• These traits provide a clear framework for financial product evaluation.

The evolving role of stablecoins in payment systems

• Stablecoins are poised to become an important payment rail over time.

• It was very clear to me that they were an economically rational winner over time they enabled payments to happen faster or cheaper and as a result it was super clear to me as we started spending time in the space that at some over some arc of time this was gonna become a very very important payment rail.

  — Zach Abrams

• The potential impact of stablecoins on future payment systems is significant.
• Stablecoins offer faster and cheaper payment solutions.
• Understanding their evolving role is key to navigating the financial ecosystem.
• Stablecoins are predicted to play a major role in payment systems.
• Their efficiency makes them a rational choice for payment rails.
• The trend towards stablecoins indicates a shift in the financial industry.

Current use and untapped potential of stablecoins

• Stablecoins have primarily been used for trading and DeFi.

• It was shocking to me that more had not been done over the subsequent eight years to enable that type of functionality stablecoins had mostly been used for trading use cases, you know, defi and bitcoin settlement.

  — Zach Abrams

• There is significant untapped potential for cross-border payments.
• The limited application of stablecoins suggests a market gap.
• Understanding current use cases is crucial for identifying opportunities.
• The potential for cross-border payments remains largely unexplored.
• Stablecoins’ current use is limited compared to their potential.
• Addressing this gap could expand stablecoin applications significantly.

The importance of regulatory changes for stablecoins

• The long-term success of the stablecoin space depends on regulatory changes.

• It is really clear that the long term success of the stablecoin space is going to be downstream of regulatory changes.

  — Zach Abrams

• Regulatory developments will shape the future of stablecoins.
• Understanding the regulatory landscape is crucial for stablecoin success.
• Businesses must consider regulatory changes in their strategies.
• The stablecoin space’s future hinges on regulatory adaptation.
• Strategic considerations must include potential regulatory shifts.
• Regulatory changes are a key factor in stablecoin market dynamics.

Regulatory perceptions and business strategies

• Regulatory perceptions significantly impact business approaches to stablecoins.

• We just heard it over and over again from our customers of like our board doesn’t know if we should be doing stuff in stable coins or you know our regulator doesn’t understand stable coins so like this is too risky.

  — Zach Abrams

• Businesses are cautious due to regulatory uncertainties.
• Understanding regulatory perceptions is crucial for corporate strategy.
• The influence of regulation on business decisions is significant.
• Regulatory understanding directly affects stablecoin strategies.
• Businesses must navigate regulatory perceptions carefully.
• The impact of regulation on business strategy is profound.

Risk assessment of stablecoin activities

• The current regulatory environment views stablecoin activities as riskier.

• The banks were like you know if you’re doing anything with stable coins you’re automatically in this risk bucket whereas if you’re doing the same activity but not with stable coins you’re in a different risk bucket.

  — Zach Abrams

• There is a disparity in risk assessment between stablecoin and traditional activities.
• Understanding risk classification is crucial for financial institutions.
• The perception of risk affects stablecoin-related business activities.
• Financial institutions categorize stablecoin activities differently.
• The regulatory environment influences risk assessment significantly.
• Navigating risk perceptions is key for stablecoin-related activities.