Global Startup Cities podcast: How stablecoins drive financial services innovation

Victor Swezey 0:04
Hello, and welcome to a special edition of The Buzz, a Bank Automation News podcast. Today is July 18, 2023. My name is Victor Swezey, and I’m the editorial intern at Bank Automation News. Today, we’re embarking on our Global Startup Cities series, taking you to some of the most innovative tech hubs around the world to give you a look at these startup cultures and the markets they serve. Along the way, we’ll be talking to fintech founders from new cities about the products they’re bringing to market. First up, we’re visiting Buenos Aires, Argentina, a city known for its world class cuisine, beautiful architecture, passionate soccer fans and so much more. It’s also home to some of the most exciting startups in Latin America and was the birthplace of Mercado Libre, Latin America’s leading online marketplace. Joining me today are the founders of Num Finance, a startup using stablecoins to help businesses across the region scale their operations. Please welcome CEO Agustin Liserra and CGO Mariano di Pietrantonio.Agustin Liserra 1:11
Thank you, Victor. From my side, well, I’m Agustin CEO of the of the company. Just as selling a quick introduction, from my side, I have a background in in both engineering and finance, a master’s degree in quantitative finance. And then over the course of my my career, I gained extensive experience in finance and risk management. I worked as financial exposure management manager at YPF. That is the the largest oil and gas company in Argentina. And since 2016, my interest was captured by the crypto and blockchain world. And I became incredibly passionate about this this world. So I joined Bitex, one of the first cryptocurrency exchanges in Latin America. And then in 2020, I made the move to Buenbit as the CFO of the company for two years and a half.Mariano Di Pietrantonio 2:19
My name is Mariano, as I said, and I have more than 15 years of experience as a product manager in gaming and biotech. And my list was seven years working for MakerDAO. Maker DAO for those who don’t know, is the biggest protocol in the Ethereum blockchain with more than 10 billion in total value locked in in assets. I worked there as head of growth for four years strategies, communications and partnership.

Victor Swezey 2:55
Thank you. So I guess, you know, to begin, I just wanted to ask, you know, why did you found Num Finance, you know, when did that happen? And what problem were you hoping to solve?

Mariano Di Pietrantonio 3:09
Yeah, well, that’s a question that I always like to answer, right. It’s and we founded Num for for two main reasons. Right. Firstly, throughout our experience in fintechs, and startup, we identify that one of the biggest pain points in regional in the region is the cash management, right. And the process of moving money often creates bottlenecks, right, we something in higher prices for customers, and this is regardless of the industry, right? And secondly, we observed the growing adoption of blockchain technology in the region. After the popularization of a regional dollar, sorry, sorry, additional dollar back stable coins, we know that many people were integrating these stablecoins into their lives right, but not precisely for payments, but for savings, right. And for us, this indicated that there was an understanding of stablecoins as a type of asset, right. This is one of the main points and combining these two elements, right, the understanding of this type of a crypto assets and understanding also that mobile money originally is pretty difficult, right? Combining these two we are we realized that it was possible to create the original borderless and real time money management system using local stablecoins, right. And the cool thing about this and this is most of the talk at that time that we have with Agustin is that we wanted to have an infrastructure where settlements in the region can be done almost instantly, right? And this is how Num Finance came to life.

Victor Swezey 5:04
And so can you just remind our listeners quickly what a stablecoin is, you know, how does it fit into the whole crypto ecosystem? And you know, how does it fit into your business model?

Agustin Liserra 5:16
Yeah, sure. Well, stablecoins are basically blockchain-based tokens, representations of other assets, whose value is tied to an external asset, such as national currencies or precious metals or other commodities, for example. These digital assets serves as representations of traditional currencies like the US dollars, the euro, Argentine pesos, or other commodities like gold, for example. So, essentially, stablecoins are collateralized products that can be bought or sold within the cryptocurrency market ideally to send and receive money and for the creation of real financial products. One important thing here is that there are stablecoins in the in the ecosystem that are not collateralized. In our case, we we are going for the collateralized side of stablecoins and not algorithmic stablecoins that are like a different a completely different chapter.

Victor Swezey 6:30
So, can you walk me through like a specific banking-related use case?

Agustin Liserra 6:35
Stablecoins play a crucial role in in banking use cases, specifically in emerging markets. Here in Latin America, for example, they offer several benefits that help people in this region. First, stablecoins increase accessibility, allowing individuals without traditional bank accounts to participate in financial transactions and services. One one case, I would say that is living inertia Argentina is one big exchange that is offering a payments through a prepaid card in Argentina the same as Ripio and Let’sBit that are our main partners. Second, stablecoins promote financial inclusion by bridging the gap between the unbanked and the formal financial system enabling savings payments and access to credit and lending services. And in this example, for I was I was mentioning in one bit, it is possible to convert your prepaid card into a credit card by taking a loan and doing like a buy now pay later process as you want with the quantity and installments that you prefer for for your your cash flows and and your decisions basically, then a stablecoins provide a faster and much more cost effective and secure alternative for cross border remittances. I would say that it is the the first and the main use case of crypto in general, but with Bitcoin, it was like a nightmare to to do remittances hedging the exposure of the Bitcoin volatility. So stablecoins are really a use for useful for these kinds of services. And finally, stablecoins drive financial services innovation, facilitating the development of decentralized finance applications that expand access to financial products and services in in general. We are seeing a lot of new use cases being developed, but by our partners, our clients, the retail segment. So for us is really, really important to build infrastructure to allow innovation.

Mariano Di Pietrantonio 9:21
Yeah, one one cool thing that I would like to add to that is that we are here to help the banking infrastructure that’s already place right? We know that banking infrastructure sometimes seems to move very slow, right? And there are companies that take that opportunity to provide other services what we want you to hear is to kinda marry these two things right like the banking infra with the crypto in fact right and Num Finance is doing exactly that. Right. We are covering that that gap. So people in In this region can have the services that they need, right? Just remember that emerging markets are one of the most underserved markets in terms of financial services.

Victor Swezey 10:11
And I was wondering if we could zoom out a little bit. And maybe if you could tell me a little bit about what the startup scene looks like in Buenos Aires, you know, what is the what is the funding ecosystem like? What is the startup culture like? And how do you think that that might be connected to, you know, the history and identity of the city in general?

Mariano Di Pietrantonio 10:27
Yeah, yeah, that’s, that’s a cool question. The startup scene in Buenos Aires is really vibrant and is growing like rapidly, right? The city has become a hub for entrepreneurship and innovation, attracting a diverse range of startups across well, various industries. And the startup is seen in Buenos Aires particularly is very strong in technology and fintech sectors, right. Many ministers are focused on developing mobile software, mobile applications, e-commerce platform and other disruptive financial technologies. And we are also seeing this, like really cool, significant growth in sectors like for example, health, education, agro, there’s like a bunch of different verticals in which we are seeing a really cool growth. And I believe that the I mean, there are many cases of that, why is happening. But overall what I see, it’s like when I say this turning into one of the main spots for the digital nomads, right, to their cost of living, and, and the relationship of the cost and the quality of life that you have, right? Because although it’s really cheap for foreigners in Argentina, you still can have a pretty high, high quality lifestyle here, right? I have many friends from from abroad, and they always tell me the same thing by this about the food, how the food culture here, it’s awesome. It’s a it’s a secure city, right? It’s pretty safe cities, right? It’s a pretty safe city. And you can get also to travel a lot inside the country. And since we have a pretty big country with many different climates, and very different, you know, things to visit. So yeah, I believe that those factors plays a very important role to have these resources to get more people working here, and also to create startups.

Victor Swezey 12:31
And just more generally, how would you say that the startup culture in Buenos itis in Argentina and you know, maybe even in Latin America more broadly, compares to the United States? And what you know, what are you? What are some similarities you see? You know, what are some ways that you see this startup ecosystem that’s really been, you know, growing recently, how do you see it differing from what we have in the United States?

Agustin Liserra 12:56
Yes, well, I would say that I could define the ecosystem here in Latin America, by by towards and I would say that this was applied to every single entrepreneur in the US and in Latin America, but I consider that resilience and resourcefulness are the big key points in, in Latin America. And basically, startups in Latin America face significant challenges, limited access to capital, a really, really complex regulatory environment and political and economic instability and changes from the left side of the political parties to the right. So, it is a quite difficult to, to predict the future. So in Latin America, we choose to create. So, as a result, I would say that Latin American enterpreneurs have developed remarkable resilient, resilience and resourcefulness also, we find innovative solutions to navigate these obstacles, leveraging creativity and adaptability also, a and then the market characteristics are presents some similarities and some differences. I I will remark that Latin America presents like a unique market landscape by a large population and cultural diversity. So it is not, like trivial to, to conquer different markets like Brazil, Argentina, Colombia. So it requires a really deeply understanding of this landscape to to be successful.

Victor Swezey 15:22
And yeah, so to follow up on the point, you know, you were you were speaking about some of the economic instability in Latin America. And I know that, you know, that’s been in the headlines regarding Argentina recently with, you know, triple digit year over year inflation, and that’s something that you have been struggling with. And I was just wondering, how does how has this economic instability maybe affected the startup scene? And then, you know, from the Num Finance perspective, how do you see stable coins interacting with, you know, what happens when the currency that they’re pegged to is maybe not very stable, but also do you see them as a potential solution or something that might be able to help in these kinds of economic environments?

Agustin Liserra 16:04
Yeah, well, as as you said, economic instability, make it challenging really challenging for startups in Argentina to secure traditional funding from banks and investors, a different trading conditions currency devaluation, extremely high inflation rates create uncertainties, and that leads to a risk-averse averse environment in Argentina. And also economic instability often brings challenges in terms of capital controls, delays in payment processing, restrictions to, to capital markets, also, it is quite difficult to, to understand the evolution, for example, about international wires in Argentina, and if you can do it or not, and it changes every single week. And our business model focuses on on real time, money movement, using stablecoins can provide the startups with the ability to transact swiftly, both domestically and globally. And this can facilitate operations. It is a really efficient way for cross-border payments and greater financial flexibility also.

Victor Swezey 17:43
Yeah, so thank you so much, you know, for all of that, you know, both about your company and about the situation in Argentina and the startup culture there and in Latin America more generally. I guess I just wanted to finish by asking you, you know, what, are you touched on this, but what are some fintechs that, you know, people in the banking sector, people involved with bank automation might want to watch coming out of Buenos Aires coming out of Argentina? You know, what are some fintechs that you all are, are excited about? That, you know, maybe should be on our radar?

Mariano Di Pietrantonio 18:13
Well, I mean, one of the most prominent fintechs to watch it’s, I guess, you know, it’s Mercado Libre often referred as the as the Amazon of Latin America, and while Mercado Libre even started as an E commerce platform, it has expanded into FinTech services through its subsidiary Mercado Pago. And well Mercado Pago offers and a range of digital payment solutions mobile wallets, QR code payments, and I believe that they are turning right now into this kind of super app right in which you can pretty much have everything. They also added right now deliveries and some of these services too. And since they have like most of the market on their hand, they grow like really really fast right? But the cool thing is that they are also growing in all the countries in Brazil in Uruguay in Colombia and Mexico. They are really really, really big. Another FinTech that it seems really interesting to me for the thing that I that they are doing is Ualà while is another Yeah, wallet I would say and that it has integrated a QR codes that has integrated and these Yeah, like E commerce platform to create your own e shops. They even acquire the bank in Mexico, I believe the ABC bank. So yeah, there’s like a couple of these fintechs that are gaining a lot of traction in the in the region. Yeah.

Agustin Liserra 19:49
I will add to what Marian was was saying. Something related to your question about the Latin American a landscape and it is that this kind of of successful companies are being funded by Latin American people. And it is a the reason for that is that it is quite difficult to understand the Latin American problems from outside. So I could see some challenges in for big companies such as Amazon, Apple and, and worldwide companies to introduce the products here in in Latin America, and this reflects a huge opportunity for Latin American startups.

Victor Swezey 20:54
You’ve been listening to “The Buzz,” a Bank Automation News podcast. Please follow us on LinkedIn and Twitter. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time, and be sure to visit us at bankautomationnews.com for more automation news

Victor Swezey 0:04
Hello, and welcome to a special edition of The Buzz, a Bank Automation News podcast. Today is July 18, 2023. My name is Victor Swezey, and I’m the editorial intern at Bank Automation News. Today, we’re embarking on our Global Startup Cities series, taking you to some of the most innovative tech hubs around the world to give you a look at these startup cultures and the markets they serve. Along the way, we’ll be talking to fintech founders from new cities about the products they’re bringing to market. First up, we’re visiting Buenos Aires, Argentina, a city known for its world class cuisine, beautiful architecture, passionate soccer fans and so much more. It’s also home to some of the most exciting startups in Latin America and was the birthplace of Mercado Libre, Latin America’s leading online marketplace. Joining me today are the founders of Num Finance, a startup using stablecoins to help businesses across the region scale their operations. Please welcome CEO Agustin Liserra and CGO Mariano di Pietrantonio.Agustin Liserra 1:11
Thank you, Victor. From my side, well, I’m Agustin CEO of the of the company. Just as selling a quick introduction, from my side, I have a background in in both engineering and finance, a master’s degree in quantitative finance. And then over the course of my my career, I gained extensive experience in finance and risk management. I worked as financial exposure management manager at YPF. That is the the largest oil and gas company in Argentina. And since 2016, my interest was captured by the crypto and blockchain world. And I became incredibly passionate about this this world. So I joined Bitex, one of the first cryptocurrency exchanges in Latin America. And then in 2020, I made the move to Buenbit as the CFO of the company for two years and a half.Mariano Di Pietrantonio 2:19
My name is Mariano, as I said, and I have more than 15 years of experience as a product manager in gaming and biotech. And my list was seven years working for MakerDAO. Maker DAO for those who don’t know, is the biggest protocol in the Ethereum blockchain with more than 10 billion in total value locked in in assets. I worked there as head of growth for four years strategies, communications and partnership.

Victor Swezey 2:55
Thank you. So I guess, you know, to begin, I just wanted to ask, you know, why did you found Num Finance, you know, when did that happen? And what problem were you hoping to solve?

Mariano Di Pietrantonio 3:09
Yeah, well, that’s a question that I always like to answer, right. It’s and we founded Num for for two main reasons. Right. Firstly, throughout our experience in fintechs, and startup, we identify that one of the biggest pain points in regional in the region is the cash management, right. And the process of moving money often creates bottlenecks, right, we something in higher prices for customers, and this is regardless of the industry, right? And secondly, we observed the growing adoption of blockchain technology in the region. After the popularization of a regional dollar, sorry, sorry, additional dollar back stable coins, we know that many people were integrating these stablecoins into their lives right, but not precisely for payments, but for savings, right. And for us, this indicated that there was an understanding of stablecoins as a type of asset, right. This is one of the main points and combining these two elements, right, the understanding of this type of a crypto assets and understanding also that mobile money originally is pretty difficult, right? Combining these two we are we realized that it was possible to create the original borderless and real time money management system using local stablecoins, right. And the cool thing about this and this is most of the talk at that time that we have with Agustin is that we wanted to have an infrastructure where settlements in the region can be done almost instantly, right? And this is how Num Finance came to life.

Victor Swezey 5:04
And so can you just remind our listeners quickly what a stablecoin is, you know, how does it fit into the whole crypto ecosystem? And you know, how does it fit into your business model?

Agustin Liserra 5:16
Yeah, sure. Well, stablecoins are basically blockchain-based tokens, representations of other assets, whose value is tied to an external asset, such as national currencies or precious metals or other commodities, for example. These digital assets serves as representations of traditional currencies like the US dollars, the euro, Argentine pesos, or other commodities like gold, for example. So, essentially, stablecoins are collateralized products that can be bought or sold within the cryptocurrency market ideally to send and receive money and for the creation of real financial products. One important thing here is that there are stablecoins in the in the ecosystem that are not collateralized. In our case, we we are going for the collateralized side of stablecoins and not algorithmic stablecoins that are like a different a completely different chapter.

Victor Swezey 6:30
So, can you walk me through like a specific banking-related use case?

Agustin Liserra 6:35
Stablecoins play a crucial role in in banking use cases, specifically in emerging markets. Here in Latin America, for example, they offer several benefits that help people in this region. First, stablecoins increase accessibility, allowing individuals without traditional bank accounts to participate in financial transactions and services. One one case, I would say that is living inertia Argentina is one big exchange that is offering a payments through a prepaid card in Argentina the same as Ripio and Let’sBit that are our main partners. Second, stablecoins promote financial inclusion by bridging the gap between the unbanked and the formal financial system enabling savings payments and access to credit and lending services. And in this example, for I was I was mentioning in one bit, it is possible to convert your prepaid card into a credit card by taking a loan and doing like a buy now pay later process as you want with the quantity and installments that you prefer for for your your cash flows and and your decisions basically, then a stablecoins provide a faster and much more cost effective and secure alternative for cross border remittances. I would say that it is the the first and the main use case of crypto in general, but with Bitcoin, it was like a nightmare to to do remittances hedging the exposure of the Bitcoin volatility. So stablecoins are really a use for useful for these kinds of services. And finally, stablecoins drive financial services innovation, facilitating the development of decentralized finance applications that expand access to financial products and services in in general. We are seeing a lot of new use cases being developed, but by our partners, our clients, the retail segment. So for us is really, really important to build infrastructure to allow innovation.

Mariano Di Pietrantonio 9:21
Yeah, one one cool thing that I would like to add to that is that we are here to help the banking infrastructure that’s already place right? We know that banking infrastructure sometimes seems to move very slow, right? And there are companies that take that opportunity to provide other services what we want you to hear is to kinda marry these two things right like the banking infra with the crypto in fact right and Num Finance is doing exactly that. Right. We are covering that that gap. So people in In this region can have the services that they need, right? Just remember that emerging markets are one of the most underserved markets in terms of financial services.

Victor Swezey 10:11
And I was wondering if we could zoom out a little bit. And maybe if you could tell me a little bit about what the startup scene looks like in Buenos Aires, you know, what is the what is the funding ecosystem like? What is the startup culture like? And how do you think that that might be connected to, you know, the history and identity of the city in general?

Mariano Di Pietrantonio 10:27
Yeah, yeah, that’s, that’s a cool question. The startup scene in Buenos Aires is really vibrant and is growing like rapidly, right? The city has become a hub for entrepreneurship and innovation, attracting a diverse range of startups across well, various industries. And the startup is seen in Buenos Aires particularly is very strong in technology and fintech sectors, right. Many ministers are focused on developing mobile software, mobile applications, e-commerce platform and other disruptive financial technologies. And we are also seeing this, like really cool, significant growth in sectors like for example, health, education, agro, there’s like a bunch of different verticals in which we are seeing a really cool growth. And I believe that the I mean, there are many cases of that, why is happening. But overall what I see, it’s like when I say this turning into one of the main spots for the digital nomads, right, to their cost of living, and, and the relationship of the cost and the quality of life that you have, right? Because although it’s really cheap for foreigners in Argentina, you still can have a pretty high, high quality lifestyle here, right? I have many friends from from abroad, and they always tell me the same thing by this about the food, how the food culture here, it’s awesome. It’s a it’s a secure city, right? It’s pretty safe cities, right? It’s a pretty safe city. And you can get also to travel a lot inside the country. And since we have a pretty big country with many different climates, and very different, you know, things to visit. So yeah, I believe that those factors plays a very important role to have these resources to get more people working here, and also to create startups.

Victor Swezey 12:31
And just more generally, how would you say that the startup culture in Buenos itis in Argentina and you know, maybe even in Latin America more broadly, compares to the United States? And what you know, what are you? What are some similarities you see? You know, what are some ways that you see this startup ecosystem that’s really been, you know, growing recently, how do you see it differing from what we have in the United States?

Agustin Liserra 12:56
Yes, well, I would say that I could define the ecosystem here in Latin America, by by towards and I would say that this was applied to every single entrepreneur in the US and in Latin America, but I consider that resilience and resourcefulness are the big key points in, in Latin America. And basically, startups in Latin America face significant challenges, limited access to capital, a really, really complex regulatory environment and political and economic instability and changes from the left side of the political parties to the right. So, it is a quite difficult to, to predict the future. So in Latin America, we choose to create. So, as a result, I would say that Latin American enterpreneurs have developed remarkable resilient, resilience and resourcefulness also, we find innovative solutions to navigate these obstacles, leveraging creativity and adaptability also, a and then the market characteristics are presents some similarities and some differences. I I will remark that Latin America presents like a unique market landscape by a large population and cultural diversity. So it is not, like trivial to, to conquer different markets like Brazil, Argentina, Colombia. So it requires a really deeply understanding of this landscape to to be successful.

Victor Swezey 15:22
And yeah, so to follow up on the point, you know, you were you were speaking about some of the economic instability in Latin America. And I know that, you know, that’s been in the headlines regarding Argentina recently with, you know, triple digit year over year inflation, and that’s something that you have been struggling with. And I was just wondering, how does how has this economic instability maybe affected the startup scene? And then, you know, from the Num Finance perspective, how do you see stable coins interacting with, you know, what happens when the currency that they’re pegged to is maybe not very stable, but also do you see them as a potential solution or something that might be able to help in these kinds of economic environments?

Agustin Liserra 16:04
Yeah, well, as as you said, economic instability, make it challenging really challenging for startups in Argentina to secure traditional funding from banks and investors, a different trading conditions currency devaluation, extremely high inflation rates create uncertainties, and that leads to a risk-averse averse environment in Argentina. And also economic instability often brings challenges in terms of capital controls, delays in payment processing, restrictions to, to capital markets, also, it is quite difficult to, to understand the evolution, for example, about international wires in Argentina, and if you can do it or not, and it changes every single week. And our business model focuses on on real time, money movement, using stablecoins can provide the startups with the ability to transact swiftly, both domestically and globally. And this can facilitate operations. It is a really efficient way for cross-border payments and greater financial flexibility also.

Victor Swezey 17:43
Yeah, so thank you so much, you know, for all of that, you know, both about your company and about the situation in Argentina and the startup culture there and in Latin America more generally. I guess I just wanted to finish by asking you, you know, what, are you touched on this, but what are some fintechs that, you know, people in the banking sector, people involved with bank automation might want to watch coming out of Buenos Aires coming out of Argentina? You know, what are some fintechs that you all are, are excited about? That, you know, maybe should be on our radar?

Mariano Di Pietrantonio 18:13
Well, I mean, one of the most prominent fintechs to watch it’s, I guess, you know, it’s Mercado Libre often referred as the as the Amazon of Latin America, and while Mercado Libre even started as an E commerce platform, it has expanded into FinTech services through its subsidiary Mercado Pago. And well Mercado Pago offers and a range of digital payment solutions mobile wallets, QR code payments, and I believe that they are turning right now into this kind of super app right in which you can pretty much have everything. They also added right now deliveries and some of these services too. And since they have like most of the market on their hand, they grow like really really fast right? But the cool thing is that they are also growing in all the countries in Brazil in Uruguay in Colombia and Mexico. They are really really, really big. Another FinTech that it seems really interesting to me for the thing that I that they are doing is Ualà while is another Yeah, wallet I would say and that it has integrated a QR codes that has integrated and these Yeah, like E commerce platform to create your own e shops. They even acquire the bank in Mexico, I believe the ABC bank. So yeah, there’s like a couple of these fintechs that are gaining a lot of traction in the in the region. Yeah.

Agustin Liserra 19:49
I will add to what Marian was was saying. Something related to your question about the Latin American a landscape and it is that this kind of of successful companies are being funded by Latin American people. And it is a the reason for that is that it is quite difficult to understand the Latin American problems from outside. So I could see some challenges in for big companies such as Amazon, Apple and, and worldwide companies to introduce the products here in in Latin America, and this reflects a huge opportunity for Latin American startups.

Victor Swezey 20:54
You’ve been listening to “The Buzz,” a Bank Automation News podcast. Please follow us on LinkedIn and Twitter. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time, and be sure to visit us at bankautomationnews.com for more automation news