Important points
- Payment systems offer numerous layers for innovation beyond just transactions.
- Cash App leverages existing infrastructure to revolutionize instant payments.
- The U.S. dual banking structure fosters fintech innovation through diverse competition.
- Despite its strong infrastructure, the United States lags behind developed countries in terms of payment performance.
- Successful financial products enable faster and cheaper transactions.
- Stablecoins are set to become an important means of payment over time.
- The current use of stablecoins is mainly limited to trading and DeFi, and their cross-border potential remains untapped.
- Regulatory changes are critical to the long-term success of the stablecoin space.
- A company’s approach to stablecoins is heavily influenced by regulatory perceptions.
- Stablecoin activities are considered riskier by regulators compared to similar non-stablecoin activities.
- The fintech landscape is shaped by the efficiency and cost-effectiveness of financial products.
- The future of stablecoins depends on regulatory developments and market adaptation.
Guest introduction
Zack Abrams is the CEO and co-founder of Bridge, a leading stablecoin orchestration platform that was acquired by Stripe in 2025 for $1.1 billion. He previously co-founded Evenly, which was acquired by Block (then Square) more than a decade ago, and has worked at portfolio companies including Airbnb and DoorDash. Under his leadership, Bridge helped enable faster and cheaper cross-border payments through stablecoin infrastructure, placing the company at the forefront of reimagining global financial services beyond the rails of traditional banks.
Potential for innovation in payment systems
Payments involve layers of complexity that can innovate beyond the transaction itself.
— Zack Abrams
- Innovation can occur at various levels, including the money custodian layer.
What’s so interesting to me about payments is that there are so many areas where you can be creative and find new solutions. It may resemble a real money storage layer.
— Zack Abrams
- Understanding these layers is critical to the advancement of fintech.
- The multifaceted nature of payment systems presents numerous opportunities for innovation.
- Recognizing where innovation is likely to occur is key to navigating the fintech landscape.
- The potential for innovation extends beyond simple transactions.
- The complexity of payment systems provides a rich foundation for creative solutions.
Innovative ways to use financial infrastructure with Cash App
- Cash App succeeded by leveraging existing financial infrastructure for instant payments.
The way Cash App built their product was through debit card refunds. So now everyone in the United States has a debit card, and when you withdraw money to your debit card, the balance is immediately returned to your bank account.
— Zack Abrams
- This approach emphasizes the importance of regulatory and infrastructure innovation.
- Cash App’s strategy represents a new payment experience within the traditional system.
- Understanding the limitations of the traditional U.S. payments system is critical to innovation.
- Cash App’s model shows how to creatively leverage existing infrastructure.
- Innovation lies in navigating existing systems to provide new solutions.
- Cash App’s success highlights the potential for infrastructure innovation in fintech.
US dual banking structure and fintech innovation
- America’s dual banking structure fosters a diverse and competitive banking ecosystem.
The United States has a dual banking structure that allows banks to become federal banks, and this dual banking structure has several different regulatory authorities, making it much easier and more tolerant to establish banks that operate at different sizes in the United States.
— Zack Abrams
- This structure fosters innovation in the fintech sector.
- It is important to understand the differences between US and European regulations.
- The US environment is more tolerant of the establishment of banks of various sizes.
- Competition and innovation are encouraged by the dual banking structure.
- The regulatory environment plays a key role in the advancement of fintech.
- The US system contrasts with more centralized banking structures in other regions.
Contradictions in US banking infrastructure and payment performance
- Although the United States has a strong banking infrastructure, payment performance is poor.
You know, I think everyone in the world understands the shortcomings of the United States. Despite having the most robust banking infrastructure in the world, the United States has the worst payments…and worst-performing payment rails of any major developed country.
— Zack Abrams
- This discrepancy highlights the need for improvements in payment systems.
- Despite its strong infrastructure, the United States lags behind in payment efficiency.
- Infrastructure and performance gaps require innovation.
- Understanding this paradox is key to addressing payment system challenges.
- The US payments performance contrasts with the strength of its banking infrastructure.
- Despite a robust infrastructure, payment systems need improvement.
Characteristics of successful financial products
- Successful financial products enable faster and cheaper transactions.
Whether it’s Square or Coinbase or Brex, what all of these products have in common is that they make economic sense, which means they allow you to make payments or do certain functions faster or cheaper, and they do it in a more durable way.
— Zack Abrams
- Efficiency and cost-effectiveness are the keys to the success of financial products.
- Understanding these characteristics is important when evaluating fintech products.
- Successful products share a common framework of efficiency.
- The competitive environment in fintech is shaped by these characteristics.
- Durability and cost-effectiveness are essential to a product’s success.
- These characteristics provide a clear framework for valuing financial instruments.
The evolving role of stablecoins in payment systems
- Stablecoins are set to become an important means of payment over time.
It was very clear to me that they were the economically rational winners over time. They allow payments to be made faster or cheaper, and as a result, when we started spending time in this space, it was very clear that this was going to be a very, very important payment rail at some point.
— Zack 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 an important role in payment systems.
- Its efficiency makes it a reasonable choice as a payment rail.
- The trend towards stablecoins signals a shift in the financial industry.
Current uses and untapped potential of stablecoins
- Stablecoins have been primarily used for trading and DeFi.
It was shocking to me that over the next eight years, no effort was made to enable that kind of functionality, where stablecoins have primarily been used for trading use cases such as defi and Bitcoin payments.
— Zack Abrams
- There is huge untapped potential in cross-border payments.
- The limited use of stablecoins suggests a market gap.
- Understanding your current use cases is critical to identifying opportunities.
- The potential of cross-border payments is still largely unexplored.
- The current uses of stablecoins are limited compared to their potential.
- Addressing this gap could significantly expand the uses of stablecoins.
Importance of regulatory changes for stablecoins
- The long-term success of the stablecoin space will depend on regulatory changes.
It is clear that the long-term success of the stablecoin space will depend on regulatory changes.
— Zack Abrams
- Regulatory developments will shape the future of stablecoins.
- Understanding the regulatory landscape is essential to the success of stablecoins.
- Businesses need to consider regulatory changes in their strategies.
- The future of the stablecoin space depends on regulatory adaptation.
- Strategic considerations should include potential regulatory changes.
- Regulatory changes are a key factor in stablecoin market trends.
Regulatory awareness and business strategy
- Regulatory awareness has a huge impact on how businesses approach stablecoins.
We’ve heard from our customers over and over again that this kind of thing is too risky because boards don’t know whether they should do things with stablecoins or regulators don’t understand stablecoins.
— Zack Abrams
- Companies are being cautious due to regulatory uncertainty.
- Understanding regulatory awareness is critical to corporate strategy.
- The impact of regulation on business decisions is significant.
- Understanding regulations directly impacts your stablecoin strategy.
- Companies need to carefully navigate regulatory perceptions.
- The impact of regulation on business strategy is significant.
Risk assessment of stablecoin activities
- In the current regulatory environment, stablecoin activities are considered riskier.
It was as if banks knew that if they were doing something with a stablecoin, they would automatically be in this risk bucket, whereas if they were not doing the same activity with a stablecoin, they would be in a different risk bucket.
— Zack Abrams
- There are differences in risk assessment between stablecoins and traditional activities.
- Understanding risk classification is critical for financial institutions.
- Risk perception impacts stablecoin-related business activities.
- Financial institutions classify stablecoin activity differently.
- The regulatory environment has a significant impact on risk assessment.
- Navigating risk perception is key in stablecoin-related activities.