Stablecoins Are Taking Over Finance? Regulation & Crypto Adoption with Konstantins Vasilenko | Ep 18

🎙️ New HODL FM Podcast is live!

In this episode, Tanya sits down with Konstantins Vasilenko — co-founder of Paybis, a crypto on-ramp provider helping both retail users and businesses enter the digital asset economy.

They discuss how institutions, fintech companies, and global businesses are integrating crypto, why stablecoins are becoming the backbone of payments, and what regulation like MiCA and the Clarity Act could mean for the future of crypto adoption.

🔗 Guest:
Konstantins Vasilenko → https://www.linkedin.com/in/konstantinvasi...
Paybis → https://paybis.com/

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⏱️ Timecodes:

00:48 — Konstantin’s background & entering crypto in 2014
01:24 — What Paybis does and how it started
04:01 — Retail vs institutional crypto adoption
05:00 — Why businesses are driving more crypto volume than retail
07:33 — Which companies are adopting stablecoins
08:10 — How stablecoins improve global payments
10:25 — MiCA regulation: good or bad for crypto?
13:10 — Why regulation brings institutional adoption
16:55 — USDT vs USDC dominance in the stablecoin market
17:34 — The Clarity Act and US crypto regulation
20:05 — Institutional demand vs retail participation
20:46 — Is altseason still coming?
22:30 — Why most crypto projects fail
24:30 — Do beginners still buy altcoins?
25:39 — Is retail interest in crypto growing?
27:03 — Why stablecoins may dominate payments in the future

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Transcript

SPEAKER_01 0:05

Maybe five or ten percent of all the crypto projects out there are actually there's something real behind it, not just promises.

SPEAKER_00 0:12

It's not something that's gonna change in in a in a short while. Who's gonna shill the loudest everyone was waiting for the alt season?

SPEAKER_01 0:21

Everybody was waiting for it. Businesses around the world who will integrate stable coins into their existing business processes and payment flows.

SPEAKER_00 0:30

Do you actually own your money, not some kind of bank who can decide to uh to close your account?

SPEAKER_01 0:35

They will have to uh adopt stable coins.

SPEAKER_00 0:43

Hello everyone, and welcome back to this department. We discuss later. Um today we're going to institutions in uh in the crypto world because we know that it's a lot of institutional demand for Ethereum and other cryptocurrencies. And today we're doing Constantine Vicillian because the cool thing to play this, and he's gonna let us in into how institutions are interested in buying crypto, what processes are happening right now, how companies are adopting crypto as of now, and uh where the retail interest is still there. Hello, Constantine, and thank you for joining us.

SPEAKER_01 1:31

Hi Tanya, thank you for having me here on this call. I'm always excited to tell more about the crypto market, the insights, what's happening because I'm a crypto enthusiast myself from 2014. Like seen it all, been it all the uh done it all, so I'm always also kind of on the edge trying to understand what are the latest trends, where is it all going, what's happening with adoption, and so on.

SPEAKER_00 1:55

Yeah, that's that's really cool. And to begin with, maybe you could say a few words about Pabase, what you guys are doing, and how long has the company been around? So you've been around for for quite a while, and how old is the company?

SPEAKER_01 2:08

Uh yeah, Pabus is around for a little for more than 11 years now. Basically, when I started uh when I learned uh about Bitcoin, it was the time when me and my friend and uh our CEO we started uh a company. And back in the days the goal was to make it easy and simple to buy crypto, right? Because in 2014, you know, when when you if you want to buy your first Bitcoin, for example, it was not as easy as it is right now. There were a few places, some forums, some P2P marketplaces, like local bitcoins was back in the days uh a popular place to get your first crypto. And uh we understand understood in the beginning that we want them, you know, make it easy. Of course, uh it's it's business, it's about the revenue. And we saw the opportunity. So later on along the road, we started not only helping retail people, or as we call them, web to customers to get into crypto, but we started uh also helping businesses to get into crypto. So we launched our on-ramp product, and we're on the market now, one of the leaders in the on-ramping world. So, for example, in trust wallet you can buy crypto using Pabys as a provider, in Phantom Wallet, you can buy crypto like Bitcoin, for example, or Solana. Uh, with through our company as a payment provider, we have a lot of payment methods and so on. So, this is the retail part of the story. So, we are basically helping crypto projects, centralized exchanges, wallets, uh DeFi projects to bring more web to people into the space and of course generate additional revenue with the their existing traffic of uh let's say web 3 people, because you know most of people want to get extra. And uh from the business perspective, we also started uh helping companies to get into stable coins because when you say institutional, I would say institutional is more like ETF funds, like uh which are uh investing their customers' money into crypto, like we we all know about Bitcoin and Ethereum ETF funds and so on. But we are actually helping businesses to integrate stable coins into their payment infrastructure. This is kind of the main two uh like let's say three lines of business that we have, right? So retail uh business ourselves. So we have a mobile wallet, you can download it on the on your iPhone, get the first Bitcoin like in 30 seconds, then businesses, you know, get an account. If you're a small, medium enterprise, business crypto wallets, start uh participating in the crypto economy, and then all other projects which want to kind of adopt or add on-ramping or or off-ramping flow into their business, this is what we do as well.

SPEAKER_00 4:43

Okay, that's that sounds nice. It's actually a lot of a lot of different stuff. So you're like on one hand, you're something similar to the exchange, but not the exchange though, and on the other hand, you help businesses to adopt crypto processes so that basically people would be able to buy crypto and pay with crypto in their daily lives. And as far as I know, you guys are mostly focused right now on B2B spheres. So you're not interested in the B2C processes uh within the company, but you're mostly focused on uh B2B procedures. Why is it like this?

SPEAKER_01 5:20

Not really, to be honest. Uh let me explain. Uh so as I said, we have two kind of big verticals, right, for our business B2C, the retail part, and B2B the business part. So B2C stays. I mean, we continue to develop our wallet. So we are more like more like a custodian crypto wallet for newcomers. So, for example, if you want to explain to your parents, like, hey, go and buy Bitcoin, you would not tell them go and use MetaMask, right, or trust wallet, because they have to remember the seed phrase and so on. You will not send them to Binance or Bybit because it's overly complicated with a lot of trading features. They don't need that. So if you want to recommend, let's say, to a friend he wants just to get his first hundred spend hundred bucks or euros on Bitcoin or Solana, this is the typical customers for us. It's super simple, super secure. Uh I mean, same level of security as a non-custodial wallet, but with a custodial uh sense on top. It doesn't go anywhere. We're still you know constantly improving, building uh new features. So we have our own card on the roadmap so people can actually spend crypto and so on. But uh from when you say like we start focusing more on businesses, I would say revenue-wise, uh let's say trading volume-wise, when we started last year working with business customers and helping them to get into stable coins and get out of stable coins. Of course, you know, businesses have completely different scale, right? Average check per person is like about 300 bucks, right? When you want to buy as individual your first Bitcoin, when businesses are are transacting, right, then they are transacting in in thousands, uh like hundreds of thousands, uh let's say euros. And it's completely different numbers. Of course, the fees and marginality as a business for us is completely different. But in terms of trading volume, I think it's like ten times the the retail volume that we are doing right now goes through our uh let's say business B2B volume, and the growth rate, the interest from the business customers is much higher than interest from retailer. Retail customers tend to slow down a bit in their purchases. But businesses they are not investing. I mean, at least our customers that we help, they are not the customers who are buying Bitcoin as a long-term investment. These are the customers which are transacting internationally and they need to use stablecoins to replace bank transfers. Right? Because for many reasons, and we can talk more about it. So this is our typical customers right now. I mean, we are building cryptofed infrastructure to make sure that we can support multiple use cases that businesses that want to integrate stablecoin infrastructure into their existing financial systems can use us as a partner, right? Because it's uh it's uh clear now that uh the question like if crypto adoption will come or stablecoin adoption uh is uh will come is answered. And the next question is like when businesses around the world will integrate stable coins into their existing business processes and payment flows.

SPEAKER_00 8:15

And if we're talking about non-crypto businesses trying to adopt crypto and trying to use stable coin coins within their procedures, which kind of businesses are these mostly? What are your clients?

SPEAKER_01 8:27

So yeah, we have clients uh basically from the fintech sector. These are typically payment institutions of various kinds. Uh, for example, uh let's start with the card acquirers. So those companies who are provide card acquiring services and they are direct partners with Visa MasterCard. So, for example, if you go to the let's say shop or online anywhere and you pay with a card, there should be somebody on the end charging your card, right? Taking money from your bank, transferring money to uh another another bank. So the whole economy, worldwide economy, uh holds on these big companies. So, what we do for them, we help them uh not to collect the money from the customers, but we help them to settle their merchants in stablecoins. Let's imagine there is a company who is using acquiring services, right? They are providing some online uh services to their customers and they were all they work globally, right? So, what what would happen is that let's say if you accept money uh in different let's say regions, typically what happens is that you have local acquiring in US, in Europe, maybe in Asia, in Latin America, and Africa, right? And then you need to have local banking to accept money from these acquirers. So what happens is that a lot of companies start up start to understand that they can get settled from these acquirers in stable coins, let's say in USDC, which is like now Mika compliant stablecoin, instead of you know getting paid in local currencies worldwide, and it is faster, it is cheaper, they don't need so much banking, they don't they save money on banking costs, they save time on transacting because you know stable coins are just uh you know uh flying over over the blockchain. We and you don't have an intermediary, it's like you know, one couple of seconds and you get your transfer. So this is kind of the main uh reason why companies are adopting, and then alongside you have PSPs who are basically partners and they work with acquirers and they just manage small merchants. Uh then we have electronic money institutions, so basically small business banks or neo banks who are uh serving also businesses. So those banks who provide businesses with bank accounts, they also understand that their customers want to get into stablecoin for the same reasons, right? So if you need to let's say pay salaries, of course, you need euro on your account so you can pay salaries. But if you need to, let's say, pay your supplier in another country or another continent which has different currency, then it's much easier and faster to pay them in stablecoin instead of you sending a Swift payment. It instead of one or two days, it will take you know less than a minute.

SPEAKER_00 11:07

Yes, this this makes a lot of sense actually. And you mentioned Mika, and you mentioned that you are mostly dealing with stable coins within uh your procedures. I have a question for you regarding Mika right now. So for probably for many, like for me personally, I think that Mika is not really good because it restrains my possibilities of using crypto. I myself am a crypto enthusiast, and why I like crypto and why most of like crypto people like crypto, especially those OGs like you, for example, who started in 2014. This is because of some it gives you some kind of freedom to deal with your money to because you actually own your money, it's not some kind of bank who can decide to uh to close your account. Yeah, so what do you think about Mika and has it actually helped um the stable coins procedures in terms of businesses using stable coins?

SPEAKER_01 12:04

Uh yeah, with all the regulation, it's always like uh it's not so black and white, right? There is always two sides of the coin. Uh let's say you mentioned like that banks can freeze your account, right? But there is a bank license and there is bank regulation. Uh, and all of us trust banks more or less, right? It's been decades, we're using the banks. Even if you if you're 100% crypto, you still would spend money using some kind of crypto debit card where there is a bank behind it. So we all trust banks because the regulation there has been in place for for decades. And the main reason for that regulation uh is is to ensure that people can trust the financial institutions they deal with, that they will not lose their money. Like, look look what has been happening in China recently, right? Their banking system has been developing and it has been a bit behind, let's say, European and the US. And they had issues with bank runs in the last uh in the last decade, right? Because people lost trust in the banks, so many banks were opening, people were losing money because banks misused the funds of their customers. So the same happens now in crypto, right? The the industry becomes more mature. The idea behind MIC and regulation, and of course there are multiple kinds of goals, but the the positive side is that it ensures that the companies which are on the market, which are getting the license, uh and which are providing services become more trustworthy. For example, uh in Europe, if I'm if I correct around 6,000 VASP registrations, so VASP was the registration required for a crypto company to operate in Europe during the last couple of years, and now everybody has to upgrade to Mika, basically a cusp. And uh I think only 5% of those companies will get Mika, maybe 10 maximum, right? It will eliminate, let's say, 90% of uh small enterprises which did not ensure that the processes within their company correspond to regulation. Because, for example, now we are going through Mika application in Latvia, and the level of details the regulator is asking us, uh the level of kind of procedures in the company, the level of maturity of the company that is expected is very close to the banking institution. Example, like they have a they have requirements for business continuity. So they were are you even asking like what you guys gonna do if your let's say management board or decision makers are not available for whatever reason, force major, how your company will continue to operate, that your customers will not suffer, that they will not lose their money, they will get the service. So it requires a company to become much more mature and establish and enterprise great to ensure that the people who are, let's say, coming to paybus in Europe understand that we are a licensed uh, let's say, uh crypto volume and exchange, they can be sure that their money will not be lost because we are a custody, a custodian, right? And they can be sure that they will get the service. So so regulation helps adoption. It helps adoption a lot. All these, let's say, things that good things that happened to crypto in the last couple of years, uh, where institutional adoption came, it's all due to regulation. As I mentioned, now the big financial institutions are not thinking like if we should adopt crypto, they're now thinking how can we do it and when can we do it? What is you know, in terms of our roadmap, because they understand okay, crypto is here to stay. The regulators start regulating it, so now it just becomes another uh regulated asset, or you know, as I call it, an analogy to let's say uh a technical layer for fiat, right? So instead of using CPAN banking network or Swift banking network, you can use multiple blockchains to transfer value, right? But it still has to be regulated. For example, why USDT is not Mika compliant and USDC is. The reason is that let's say European regulators are asking, okay, can you please store reserves of funds in Europe for those customers who have issued those stable coins in Europe, because they have no control where Tether, for example, is toy is keeping the funds, what Tether is doing with these funds, because I mean we know that they are investing in US bonds, they are investing in gold, but there is no transparency, right? That therefore regulatory saying we don't trust USDT, or we cannot guarantee, let's say, USDT to be trustworthy because we have no understanding what these guys are doing with their money. Today you've maybe uh you know hold 10 million in USDT, but tomorrow maybe company will go bust. And this is what European Union, let's say, and regulations are trying to prevent people from losing money, right? From prevent this from happening. USDC in its turn were built as a compliance for compliance first stablecoin. That's why it's getting so much traction. So, yes and no, right? I mean, regulations we don't like it because like there is somebody, uh especially the taxmen, you know, are are there and like with all these regulations, people will have to start paying taxes sooner or later with their crypto spending and so on and so on. But that's how it goes, right? Uber and uh Airbnb was also innovation that wasn't regulated. When people start complaining and there were a wide adoption, regulations came in, even not in all countries yet, it's still coming in, for example, uh, for Airbnb. But again, the reason is to be sure that the people who are consuming the service are protected and they have their rights protected by somebody. So I think regulation is good for crypto in general.

SPEAKER_00 17:37

So Tether, I mean, like USDT is uh still uh despite the regulation from EU right now, Tether is still one of the I think it's the biggest state. Yeah, yeah, yeah.

SPEAKER_01 17:51

You can check it in Defilama easily. It's like 50% dominance of USDT. But it was 75, yes, uh like a year or two ago. So yeah, losing the yeah.

SPEAKER_00 18:01

But but still, like even now I live in Europe, for example, for me, USDC is like starting to become more and more common. Before that I never I never actually used it myself, and I I just like it didn't it doesn't really matter, right?

SPEAKER_01 18:14

For us, USDT or USDC, as long as it works, as long as it works, it doesn't matter.

SPEAKER_00 18:19

But it's at the same time, we have right now Clarity Act coming out, hopefully in summer, and it was very much I mean like it was argued by many people that it is too strict and it's not nobody understands what to expect. What do you think? Will it with will it actually be as uh strict as Mika? And how will it influence uh crypto worldwide? Because what's happening in the US is usually given the trend to what's whatever is happening in the whole world. What are your thoughts on uh the Clarity Act?

SPEAKER_01 18:54

Well, yeah, it's a very good question. What's gonna happen? Because, for example, uh when the first draft was published, we all saw the comments from Brian Amsark that's guys, this this is not going the right way. With Mika in the beginning, it was the same discussion. I think actually Europe is ahead of US now in terms of regulation because you know uh Europe has Mika, US doesn't have it yet. The with Genius Act, yes, they they they kind of just let's say decomposed uh just stablecoin because it was more urgent regulation comparing to everything else. But in general, uh I mean when I read about it first and I understand like what is approximately the scope, I think it should be actually a beneficial thing because it would actually allow for first of all it would allow more ETFs. That's what I think right away. Because, for example, now we have Bitcoin they they have submitted, like I think ETF for Salana and a few other coins, but this would allow let's say more institutional money to get into other crypto, right? Because now one would the biggest problem is that a lot of institutions don't understand if this specific token, I mean how they should treat it. Is it a utility, is it security? I think these the beauty of uh let's say regulation adoption in US is that they have created this expert group with top guys, crypto guys from US, like let's say Brian. I mean, I know that most a lot of people don't like Coinbase, but I think they are kind of one of the pioneers in the space, and they are shaping the future uh as long as other exchanges worldwide. So it's I think it's very good that they have this expert expert group in US making sure that this regulation and this act will represent interest of crypto community. So I really hope that they will not be overpushed or overlooked and they will uh their voice will matter and this clarity act will actually help crypto adoption going forward.

SPEAKER_00 20:48

Yeah, I hope so. And uh, what do you think about like you mentioned, institutional interest that uh appeared after the ETF uh was approved and Bitcoin definitely started growing, but everyone was waiting for the alt season. And you said that most of the partners you work with are mostly interested in stable coins for obvious reasons because having settlements in stable coins is something you can really get religion and it's not something that's gonna change in a short while. What do you think about alt season and what do you think personally about altcoins? Are they here to stay, or is it something uh which is not gonna be so popular as it used to be?

SPEAKER_01 21:29

Uh yes, they say alt season hasn't started yet. Everybody was waiting for it. But um, yeah, it's not like this the previous cycles, like in 17 or or or 20 uh 21. There if you look last year, Bitcoin outperformed all of the outc altcoins. Maybe there are like one or two which outperform, but let's say if you take 99% of altcoins, bitcoin outperformed. It means that uh a lot of projects come up, they try to pump, uh Uh in the value. This is what I always say to when I pitch our on-ramp solution to DeFi projects that Web3 projects are only targeting Web3 people right now. And it's the same community, right? The all of them who wanted to get into Alt they already did in 17, in 2020, in 232. So I think right now what is happening is that people don't have a lot of trust in a lot of projects, right? That's why we see constant decline. Plus, a lot of projects are because you know the the technomics that we see right now in most of the projects is some technologics that we have been created, like the first ideas were in 15, in 17, where you have to, let's say, release some tokens for the team for investors in three, five years scale, right? So what's happening, a lot of projects are unlocking their uh let's say part of the of the funds, which creates additional pressure on the market. And the current market, where it's main institutional adoption, is not ready for that. Most of the projects are just you know releasing more crypto on on a monthly basis to the market, and the people who are getting this crypto, what they do, they of course they sell it, right? I think altcoin season is I would say the analogy is the dot-com bubble, right, in the 2000s, where a lot of uh initial internet companies went viral and then you know everything go went bust, and only the strongest remain. For example, Amazon, uh, Google, Microsoft, all companies survived the the dot-com but bubble, but only the companies survived which produced some added value that were not just shilling there and doing nothing. And the only projects will remain which generate additional uh value for the say token holders where there is a utility for the token, because what we see most of the tokens, their liquidity is tied to some base asset, either to Ethereum or to Solana, depending where the tokens are issued. If it's uh if it's on some L2, then there is most likely some kind of pair linked to the liquidity pool. So if Ethereum will grow, ultimately it will take the all altcoins which are let's say created on the Ethereum network with it. Uh and uh of course, when people start will start seeing that the market is recovering, right? They will always re- you know, balance the risks because and then of course they will go and start picking some altcoins. Hopefully, that the altcoin market uh season is starting, and of course, some of them will will grow. And again, it's marketing, it's network, like who will who is gonna shill the loudest? They maybe will will kind of get the the biggest revenues, and uh then I think also the projects which actually produce something tangible, that there is actually a business model behind it, they will also grow, but there are not many, as we know, right? Maybe five or ten percent of all the crypto projects out there are actually there's something real behind it, not just promises. So those pro I mean the the problem is how to spot these projects, right? Because everybody is saying that we are the best.

SPEAKER_00 25:13

And what about buy-based? Do you guys focus just on uh when it comes to retail uh side of things? Do you guys focus just on these major cryptocurrencies like Ethereum, Bitcoin, Solana, or do you also look into altcoins?

SPEAKER_01 25:29

For now, we our main focus is on major, so major 100, let's say. Uh, but there is not so much demand in uh let's say we call it long tail, the other tokens from web to people, you know, because our main customers, if you remember, are those who are just getting into crypto. People who get into crypto, they want to buy something they know. And uh, let's say that's why we're not selling meme coins, we're not selling any other coins. Because if you want to get into those things, you will then learn about exchanges, centralized, decentralized, and then you will go there. So people will just migrate. So we are we're we're just like the first the gate to the Web3 world. People come through our gates, then there's they take their time to kind of understand what is the world, the web 3 world behind the gates, and then they choose where they go next.

SPEAKER_00 26:22

That's really interesting, and last one to wrap it up. I was wondering if you guys have noticed over the last year or maybe two, any any kind of uh additional interest from like those web 2 people joining Web3. Has there been any kind of boom lately?

SPEAKER_01 26:39

I would say from the retail perspective, uh it is a constant uh interest uh month over months. This is what we see on our website and our mobile wallet that every month we have more or less constant uh number of new users coming in. Of course, we're doing marketing and sale, and and there is a natural growth, right? But there is no like sudden spike of people who are never been into crypto and they suddenly wanted to get into crypto. This yeah, during last year, I think that was the only case where we saw such a spike uh in interest, but we see that spike in interest from the business side of things. Like suddenly, all the businesses which are involved in uh let's say uh in payments, uh financial institutions, they suddenly have a kind of uh urge uh and for more we need to get into stable coins because it's happening. Like we don't want to be late, especially the the big guys, right? They they they they don't want to become an Nokia, another Nokia or another Skype because they didn't believe in that.

SPEAKER_00 27:46

So having stable coins within your procedures, especially if you're kind of dealing with uh transactions, is a must right now, you think?

SPEAKER_01 27:54

Yeah, I think like I truly believe that every DeFi project out there will need to have a bridge to uh fiat in let's say the next three to five years, uh because otherwise they will not survive. They need to get start attracting web to people, and the same with financial institutions. Every bank, every bank in Europe, any payment institution in Europe, any like mobile uh app, they will have to uh adopt stable coins. So I think in five years, if you open something like Revolute or some kind of online banking, you will just see euro, dollar, USDC, it will be the same. There will be no difference. It will it's is it's just it's just another way of digitalized currency. That's it.

SPEAKER_00 28:40

Hopefully it will be so, and hopefully it will be so very soon. Thanks a lot, Constantine. It was Constantine Vesilenko with us, he is the co-founder at PlayPies. Thank you for finding time to join us. And for those um who don't know, go check out the Playbies website. Um their socials will catch them in the description. Um don't forget to like this video and share it with your friends. Thank you and bye.

SPEAKER_01 29:04

Cheers, thank you for letting me channel.