Solving Self-Custody Problem - Aleksei Zakharov | ATC #487

In this episode, Mike Townsend interviews Aleksei, the CEO of Ottr Finance, a web3 mobile wallet bringing instant USD payments and investing to global users. Before Ottr, Aleksei led crypto mobile engineering at CashApp and started his career as the 3rd engineer at Lyft.

Host: Mike Townsend

Guest: Aleksei Zakharov

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Episode Transcript

Mike:Today's podcast is with Aleksei Zakharov, CEO of Ottr Finance. Alekseipreviously was at Cash App and Lyft before that, and Ottr Finance is a webthree mobile wallet that makes buying USD payments using USDc. Very easy. Theyallow self custody and effectively allow you to move money like Venmo. But onthe blockchain, we talked about why they chose Solana as the backendblockchain, how the global macroeconomic changes are making.

Ottr Finance muchmore compelling the growth that they're seeing after doing direct integrationswith Circle and much more. I hope you enjoy this conversation. I found it veryeducational, inspiring and it was interesting to hear Aleksei's take on theeconomic situation that we are currently in. If you like these conversations, pleasegive it a like thumbs up wherever you listen to Around The Coin.  

Mike:All right, Aleksei.

Aleksei:Hey, Mike.  

Mike:I'm I'm excited to chat with you. It's an interesting time. So you're nowrunning Ottr Finance. You started it a few years ago. Relatively small teamwith an awesome background having been at Cash App and Lyft and, and other coolplaces. Maybe we'll just start off with like, where do you see the currenttension in the financial markets in the world today?

Obviously, The us beingthe global reserve currency. There's, there seems to be so many different takeson where this goes, but I'd love to hear your thoughts on just generally whereyou think we're trending and how the currency of the international markets fitinto the future with crypto being a part of that.

Aleksei:Yeah, yeah, definitely. With all recent events people like. I, I feel likeslowly losing trust into the established institutions that been there for, for,for a long time. I think like crypto and I, I think stablecoin especially hasis a very good foundation to kind of bring back. Attention from thespeculation, which was mostly dominating the industry for so many years andbring it back to like practical use case of transferring money betweencountries and provide like a fundamentally much better.

Rails for that. AndI, I, I think like stablecoin, like U S D C like I, I think is one of the besttools actually to bring back trust in dollar worldwide because for me we almostlike at the kind of, A point where United States either can take a path offurther isolation with maybe releasing its own CVC and imposing a very strictrules on this digital form of dollar.

Or it can actuallyembrace stable coins like U SDC or Tether and kind of create this open API fordigital dollar that. Everyone around the world can use and benefit from. So Ithink we are this. Exciting inflection point, and I, I'm really hopeful thatenough people who care will push the idea for this, like more open dollarrather than a closed dollar that nobody wants will want to have and willfurther kind of, impact and increase the, the dollarization that our people arestart talking about.

Mike:And, and do you, would you agree that the primary difference there betweenthese two paths that you just identified mm-hmm. Being the tether U S D C pathand then the Fed Now, or the centralization path of the federal government is,is the primary difference there? The ability for the government to stoptransactions and, and maybe like take people's money directly, whereas, Youknow, ultimately they still, they being the Federal Reserve still control the,the total number of dollars in circulation.

So in that sense,the federal government still maintains a strong grip on the global economics,even if we're using like stablecoin U S D C and Tether. Curious your thoughtson that?  

Aleksei: YYeah. Well, I, I, I think yes, fundamentally federal government still havepower to like emit more dollars and, and, and, and so on.

But I, I think withC B D C approach, they actually have like a direct control of individualsbalances. So it, it, it, it's basically not even like behind the scene, a blockwill be a blockchain. Most likely. It'll be just a, like a big database thatUnited States. Maintain. And then if they don't like a particular individual ora company, they could easily have a tool to like make this balance zero orcompletely freeze it while, like with approach like U SDC or, or It's like somesort of like separation of power.

So for mm-hmm. LikeUS government to directly try to like stop the money movement. They have towork through like this different set of partners and they have to have a properlegal basis to, to come to them. And yeah, I mean, it, it will be a much. Morelike complicated and non straightforward process.

So maybe only likefew oligarchs that will be on the radar. Could be blocked, but like for likeregular people, smaller customers, it will be like much harder in, in, in, inthis case.  

Mike:Interesting. Yeah, I certainly see the obvious threat of. Coming down themiddle where the us, the US government said, Hey, we're gonna launch a cbd C.

It's not gonna beon blockchain. I think there's too much, there's too much prepared resistanceto that, and so, mm-hmm. I think what seems to be happening, and you tell meyour thoughts, is it seems like the government is not calling into cbd C.They're calling it the Fed Now program, and maybe they even build it onblockchain, but they're the only node and so.

The average personkind of gets lost in the details where it's like, oh, I thought CBDs were badand the government's not launching a CBD C, so therefore like this Fed Nowthing, maybe that's not as bad. Do you think that the government will mostlikely try to take the route of maximum control, but then just cloak it in adifferent branding to try to deceive people?

Aleksei: Ithink some people will try to push for that, but I think there is enough peopleon the other side who want to create a more like open dollar. And I think likeCircle is one of those players. Yeah. So I'm, I'm just hopeful and to extendhow like we can influence that. We will be pushing for like an open dollarwith.

Ability for peopleto choose between U S D C U S D T and now there is a momentum in Europe withEuro C as well, and I think Tether has a similar product as well. Yeah, so Ithink it'll be very interesting next five years and we will see who willprevail. But yeah, like in China, we have the opposite example where yeah.

Chinese governmenthave well, I believe through WeChat app, they have essentially digital form of.UN payments that they fully control, and at any point they can do anything withbalance of each individual in the country. So, yeah, we, I, I feel like we cansee that as an example and may maybe we will think twice before we will likecreate a product like that.

I mean, I mean, bywe,

I mean as anissue.  

Mike:Yeah, it certainly seems like. Yeah, no, I, I agree and I think a lot aboutwhat would be the kinds of things that people like you or me or other peoplecould do to influence the overall conscious perception of the direction thatthe country should take. Poli politicians largely, I think, are operated to getas much power as they can, and so powers generally.

And, andspecifically in this country by the electorate. So if people, if people likeyour ideas, then they'll put you in power. I don't think politicians reallycare. Like, I don't think if you sat 'em down, I think the reality is they'rejust trying to get elected and they don't really care what financial structurethat the US takes.

And so I feel thatultimately it's about how do you, how do we as like a people who supportcryptocurrency as a method of transaction for the flourishing of Westernsociety. How do we cr create a compelling narrative and align the effortsinstead of just kind of like hoping that it works out?

And, and I, I'mcurious if you've seen anything. I mean, I see people on Twitter that seem tobe active, but is there any kind of like story or. Maybe centralized effortisn't the right word, but like is there anything that people can click on tolearn more about why this is a good path? Because last thing I'll say on thisis that I think the tendency or the temptation for the federal government tocapture more power by centralizing everything under the Fed Now slash TBCprogram mm-hmm.

Is. It, unless it'smet with a sufficient resistance, it will happen and. Average people that areworking nine to fives to some other jobs, they're just not going to know orcare enough until it all plays out and then we look like China. So yeah, I see.I see a path for the West to take the path of like, you know, if China goesyin, we go yang.

If they gocentralization, we double down in decentralization. And that to me seems likethat's the message, right? It's like, don't try to out China, China. Try to dothe inverse of what they're doing, and then you can actually have, have acompelling economy. But I'll put that to you.

Aleksei:Yeah. Well, I, I, I, I think there are like two well approaches.

I think one is thatlike building a product that. Allow people to like, use, use let's say usdc,stable Coin as a easy form of payment that they can use day to day. And, and,and just have a, like, a really great product to do it. It, I think is onehealthy approach to popularize that idea. And then if let's say 40 millionpeople in US are using product like this and relying on it, then it'll be muchharder to like reverse access to like something like U sdc.

So, So the, thegood news with the most recent version of our product or water wallet you canconnect it to any bank in the US and then you can essentially move money onyour bank to a wallet in form of U S D C and then transact with others throughSona Blockchain. And then you don't really need any.

Knowledge how likeblockchain work. It will look and feel exactly like Venmo or Cash Up looks. Butby using it, you essentially support this next generation open dollar platformwhere like each customer have like basically direct ownership of that dollaramount they hold on order wallet, because the big difference between order andlet's say Venmo, is that in Venmo case, all your dollars are held on abasically Venmo big bank account that of Venmo.

And with order,each customer actually have their, their dollars directly on the blockchainsecured by the private keys that they control. And what order made it simple isthat we automatically like back up those keys to your personal iCloud or GoogleDrive. So you don't need to worry about like technical nuances of how to keepthose keys safe, but at the same time, like order doesn't have access to thosekeys and as a result to your money.

So I think like ifpeople like start learning about the importance of. Like open dollar and like,access to stable coins. By simply using this product in day to day, they willcreate a case for, for politician because like why would you ban something thatpeople like to use? And it provides them value.

And I think onother side I think adoption of dollar is very strategically important forUnited States as a country. And I think sooner our politicians will realizethat with stable coins like U S D C or U S Z T they essentially increaseaccessibility across so many countries and in a lot of those countries.

Individual peoplewant to hold dollars, but their government or banks limit this access. So,there is a demand, but then the like instruments are not there. So in thiscase, it's like a direct interest of us to increase adoption of a dollar is tosupport these open standards basically.

Mike:Interesting. And, and so from a business perspective, what I'm hearing is thatyou outlined the case that this is Ottr Wallet is operating with the backboneof Solana. So the, the crypto keys that are used to make the transactions whilethey're coming from an integrated bank api, whatever you guys are using to dothat, you're actually moving money outta that bank account.

Like how does theflow of funds work? So you have a person with a bank account, they connecttheir auto wallet, it's like a plaid integration, or you guys build some API tothat bank and then you make a request to make an ACH transfer from that bank.Does that go into a centralized bank or does it go directly from a bank of thatperson to Yeah.

Can you walk methrough that a little bit?  

Aleksei:Yeah, yeah, that, that, that's a great question. So for every customer whowants to connect the bank, we essentially create a, a second virtual bankaccount that will allow us to both send money through ACH rails and receive itincluding even your paycheck.

So, the differenceis we never keep money on that. Kind of transitory checking account. So it'sonly used to receive money. Convert it to U S D C, send it to the wallet. And,and vice versa. Send u SDC from the wallet, receive it and from this bankaccount, send out to whatever bank account you are using and.

The authenticationfor external bank accounts is, is working through plaid. But yeah, we, we arethe first wallet that kind of integrated this all together because if you triedany other wallets, like Matter mask and so on, they all rely on a third partylike Coinbase to basically take money from the bank, convert it to crypto, andthen send from Coinbase to the wallet.

I think formajority of people that approach. Doesn't work because that extra step createsso much friction that if you are, are not deep into crypto, it, it basicallymakes it unusable that, and that's a big problem we are trying to solve becausewe want to create a customer experience that will be secure and allow you tofully own your stablecoins But, but at the same time be connected to.Traditional financial system so you're not isolated in your own world.

Mike:Interesting. Okay. So it goes from a person's bank account to a virtual bankaccount that you maintain. But that bank account, it's really just used as atemporary called maybe exchange account. So when the US dollars go into thatnew virtual bank account, are you guys building or currently using like yourown exchange or would you then use like Circle or some other exchange to thengo from dollars to U S D?

Cuz you, you guysas a company would have to make that. That Yeah. Exchange, right?  

Aleksei:Yeah. So we have a banking partner. Bank banking is a service partner thathelps us to create those accounts and then that banking as a service partnerhave different liquidity providers connected to it. And Circle is actually oneof them that allows to like very efficiently convert U S D to U sdc oh.

Mike:Yeah. So they make this possible really that that underlying circle's abilityto go, like you send them a dollar in a bank. Yeah. And then they send you U SD C  

Aleksei:and, and, and then circle can guarantee one-to-one ratio. And, and there are acouple other providers besides circle that also hold like pulls of.

U U S D and u SDCto provide this conversion. But I think like the most cost effective right nowis circle themselves.  

Mike:Yeah. Hmm.  

Transparency inDigital Currency And I remember a circle had there was a bit of concern forcircle during the SVB collapse, given that if you trace the money back, youthink you have U S D C, you think you have a dollar, but that dollar ismaintained by circle, and then circle puts.

Their money in svband then SVB takes your money and then buys treasury, so they don't own dollarsanymore. They're now owning a certificate for the dollars in the future. Does,do you see enough transparency among Tether and U S D C on where the moneyactually is? And if not, why? Why are these banks not willing to just charge aservice fee and then keep your money in dollars?

Aleksei:Yeah. I think both Tether and U S C provide a good amount of transparency interms of like what assets are backing up the one-to-one ratio. I think Circleis definitely have a much higher level of transparency. I think there is a lotof confusion around, like, for example, Most of the u basically funds thatbacking up U sdc are, I think, ultra short treasuries.

And, and that couldconfuse people. Why don't you actually keep cash? So if you, if you go to, in,into details It's actually a safer instrument to keep it in this ultra shortterm treasuries that actually managed by BlackRock and custody it in BNY Mellonbank, which is like, unless unlike other banks specialized in like purecustody.

So then if, if youkeep money, let's say in svb then SVB could. Loan your money or like investthis money to like some selected sets of securities that considered cashequivalent. So in, in that sense, like most of the money that circle has keptwas always. In this like ultra managed by BlackRock.

But the problem wasthat their operation cash was distributed across like, I think seven differentbanks, and SVB was one of them. So it was definitely, I feel like that was agreat moment for Circle to Shine during SVB crisis. Because then you can saywhen you keep your money in U S D C, your money won't be invested in like, likeless stable up products like, What SVB did, they bought like long termtreasuries, which are not stable.

Or they gave likesome credits to founders backed up by the company shares rather than like anyreal assets. But what, so yeah, be because some of the cash was allocated inSVB Circle got affected. And thankfully that got resolved when SVB depositswere guaranteed. But since then circle actually made, made sure that all thecash is no longer held in banks.

That can they, theybasically moved it to like a banks like BNY Mellon again, or a few other banksthat will not have that exposure that SVB had. Ho hopefully that thathelps.  

Mike:do you agree that the federal government should have. I don't wanna use theword bailed out, but backstop svb, do you think that's the right call?

Like if you thinkabout this from the, the mid to long term prosperity of the, of the country,was that the right decision to make?  

Aleksei:Yeah. It's a, it's a, it's a tricky question, I think. Well, I think my, Ipersonally believe, I think it was a good call, but I think what's importantif, if there was a proper follow up that essentially triggered the process in alot of banks to exit from those.

Like, because,because I think five big banks like Chase, they were not allowed to invest insomething like long term. U us treasuries. They, but then as smaller banks gotthis like opportunity to invest in more riskier products so I think that actionby federal government was helpful to backstop the crisis.

But the, theimportant part is that, The follow-up actions need to happen to, to preventsuch risky investments on local banks level in the future. Hmm.  

Mike:It's, yeah. Good. Good point. Yeah. Yeah. And we're right in the middle of itstill. It feels like it's happening. Slow motion, you know? Yeah. Given thatthere's like quarterly reports on the bank, so we don't know day to day.

So I wanna ask youa little bit more about the business. So when you use Solana on the, on thebackend I understood everything. Person has a bank account, they transfer it,you use Circle, you get U S D C. Why use Solana instead of just managing thekeys for them? And then, yeah, tell me that first.

Aleksei:Yeah. Yeah. Well, I mean, you need to pick one of the blockchain because the,the keys are used to like access funds on one of the blockchains. So basicallywe had a choice between like doing it on Ethereum polygon And, and Solana. Soat the time, and I think it's still the case, Solana actually provide thehighest speed of settle fastest settlement and the highest throughput for liketransaction volume.

So our. Essentiallygoal was to make sure when you transact an order, it will look and feel likeyou're transacting on Venmo cash app. So you send money and instantly someoneelse received it. So with Solana, the settlement time is actually less than asecond, which enables us to have this experience while allowing people todirectly.

On their funds onEthereum, for example, it will actually take, will take about like 20, 30seconds before the recipient could see the funds. And I think it's around likefive to 10 seconds on Polygon. And similarly with fees. On Ethereum, it couldcost you like from two to $5 to send money on Polygon.

I think it's like20 to 50 cents. And then on Solana, it's less than 1 cent. So when you look atthose kind of fundamental characteristics of Solana, it becomes a clear choicefor payments. And at the same time Based on our analysis, Solanadecentralization level is very high, and it's higher than Polygon.

It's not maybe ashigh as on Ethereum, but there are more than 3000 decentralized validatorsspread around the world that now service, so on network and from. Hearing fromthe founder Anna he's constantly pushing to increase amount of validateddistribution and actually foundation give incentives to like validators thatare in new remote location around the world.

And they constantlytrying to increase distribution of those.

Mike:That's awesome. Yeah. Sounds like the right choice. And I agree. Speed is veryimportant when you make the value proposition to a customer, right? Say, I tellmy my cousin who's not into crypto, and I say, you should really try out thisOttr Wallet.

It's better thanVenmo. The initial value proposition is unclear to me. I, well, well, Ishouldn't say unclear. It's not immediately. It's not immediately felt becauseVenmo just works and Otter just works. So I use Venmo. Mm-hmm. Why switch? Ithink the, yeah, the case that you made, you made a subtle point, but I, Ithink it should really be like the central point, which is that Venmo's thebest choice when the banking system is very stable and the government mm-hmm.

Doesn't, is not. Ininterfering with the transactions themselves. But if you believe that we'reheaded towards a path where the government is gonna have direct ability to stopand reverse transactions, then start using this wallet today and support thatfuture. I, I, you, you said that, but I, I think. You, you tell me like, how isadoption going?

How are usersreceiving it? Where, where are you guys in terms of like numbers? I know you'veraised a couple million, 3 million yeah. Can you mention like users or revenueor any of those sorts of things to indicate traction?  

Aleksei:Yeah. Well, well, right, right now, like we, most of our products we provide,we provide for free.

So we more focusedon like, growing the, the customer base. So I, I think like until we had thisbanking connection there was like a very slow adoption of of, of the productbecause I, in the end, it was like still hard for people to get money in, toget money out. But since we launched the banking.

Connection aboutlike now a week and a half ago, we actually see a constant spike of interest.So, we just, in this week and a half, we got over 2000 new customers who likeregistered and connected their banks, and we saw over a hundred thousanddollars transferred from the bank to order. To, to start performingtransactions.

So, so we see likethis, like, steady growth. I don't, I won't say it's like a hockey stick yet.But it was a, a very big change in terms of like, customer interest because Ifeel like when we delivered that Bank connection. People can actually likereally see the difference between what auto does as a wallet and then any otherwallets on, on the market.

I think there'sstill a lot of things we can do more in terms of customer value proposition. Ithink the interesting part that. When you go beyond us, the value propositiongets even more clear because in countries like Argentina for example, you can'tbuy more than 500 or a thousand dollars per week.

So customersactually consciously limited by the government and banking system to not buydollars and having this. Like, decentralized access to dollars actually helpsthose people to buy it. And and that's what I was talking about, like, likehaving an open dollars standard helps us to essentially increase access todollars around the world.

Let me ask you.  


I was gonna ask youon that is there is the a U S D C and Tether are those kind of loopholes tothose local regulations in, in countries like Argentina where they say youcan't buy more than 1500 US dollar, but if you were to go and buy 2000 Tether,is that, is that kind of a loophole around it Legally?

Aleksei:Well, it's, it's not a pure loophole because there you still, if you buy itthrough the bank you still have to KYC with the local bank and there will beinformation. So I think right now the restriction is a purely on dollars, butnot on stables. But I think the difference is that if those governments willlike, restrict.

The banks fromdoing it. There is still a, a giant market of kind of like p2p dollar exchange.And then I think right now that exchange is happening through cash and more andmore in those countries. The adoption goes to stablecoin because it's a muchsafer. Medium because if you deal with cash, you like as a person who likeperform those exchanges, you are like exposed to a lot of risk, physical risk.

And then withdigital dollar it will become much easier. So I don't necessarily consider itas a loophole, but I think it makes it much harder to prevent people fromaccessing it if, if they, if they want to. And I think with c d C actuallythen, like us, will be solely responsible for like block this access whilelike, if, if kind of dollars are in this open circulation, it's not a directresponsibility of federal government to control it anymore.

Which, whichsignificantly increase access to it.

Mike: AAnd do you think countries like Argentina and we'll just put Argentina in thecategory of countries experiencing high local fiat inflation, are theybenefiting their economy by preventing people in their country from making foreignexchange trades? Is that something you think we'll look back on and look at howfoolish that that economic policy was or, or do you see the validity of.

And theeffectiveness of the, of those policies?

Aleksei:Well, I think like limiting this access, like historically didn't work well.Like, like the, the, the currency is not typically the problem. The problem isactual issues with the economy and like major industries. And I think like, Theindividual people will still strive to, like, if, if your currency depreciate,the individual people will try to find a way to prevent them from it.

So I think the mainpath for, for those countries is, is to like actually find the, like root causeof the issue and make reforms. To address that rather than like trying to limitaccess to two currencies. Mm-hmm. I mean, I, I grew up in nineties in Russiaand I think it was very similar situation there.

Yeah, Rabel waslosing its value every day. And then if you want to buy anything likesignificant like, dishwasher or washing machine you only can buy it in dollars.So the entire country was basically transacting in Dallas with like physicaldollars. Wow. So, and then it, the same is happening in Argentina.

Like if you buy anysignificant purchase like above, basically you're like a dinner price, thenpeople want to have it in dollars. If you buy a phone let's say from someone,people wanna sell this phone to you. In dollars, not in Argentina andPaso.  

Mike:And the ultimate, the, the effect of that would be you have less gdp.

I mean, less tradesare happening because you may have enough money in your local currency, but foryou to go and get the US dollar, make the trade introduces friction andfriction decreases transactions. It's interesting. And

Energy-Backed Currency: Bitcoin's CompellingProposition do you see, I mean, ultimately even U S D C is. Backed by thedollar, which is determined by the federal government's printing.

To me, I think ofthis as like that's still, it's still a stop gap, and it may be a short termstop gap for the next few years or so until like the ultimate scarce resource,as I see it, is energy. And if you can tie energy to currency, then you couldhave, and that's what Bitcoin does, that seems to be.

Like, that premisealone just seems to be so, so compelling that I, I, I just don't, how doesanything else exist? You know, how, how do we not, I mean, does this make senseto you? Do you think like, okay, it's eventually just gonna be on Bitcoin orsome other cryptocurrency that is backed essentially by mining I don't know.

What are yourthoughts?  

Aleksei:No, I, I, I think Bitcoin definitely have this value proposition in terms oflike trying to basically capture the value of energy in it. I think there arepotential shortcomings to it with scientific progress. Cost of energy actuallycould become really cheap. Even now if us will like change its path and we'lljust start adopting nuclear reactors of third and fourth generation thatessentially take the nuclear waste.

Of the, that weaccumulated through many years of the original technology, and we'll just likestart actively building and using those, the cost of energy will become reallylow. And then at that point that securing by energy proposition will not nolonger work. I mean, I worked on Bitcoin a lot at Cash App and I've been a fanof the whole idea since, since like, I think I first learned in two, 2000, 2010about it.

I think theimportant parts there was like self custody which people like really lost trackof and then. I, I think another problem was that the Bitcoin as a standard,like didn't stop evolving a while ago. And now to even like keep the Bitcointransaction cost efficient, lightning Network was created.

But I thinkcomparing to Solana, it still feels like a lot of. Extra steps, which makestechnology like really complex and like in, as a result, like less reliable ifit will be used at, at at scale. So I think I still like Bitcoin as a reservecurrency. I don't know if that's. Sustainable with potentially decreasing costof energy significantly, which, which could happen.

And, and then Ithink there are like a lot of other things we can tokenize to provide goodaddition to stable coins. I, I, even now, I think. Tether, for example,tokenized gold. So you can have tokenized gold, but it, it still doesn't seemlike people actively want to use it because the volume of like U S D C and U SD T usage is so much higher than the usage of tokenized gold.

So I think in termsof like practical adoption, it will be much easier to get the higher adoptionof U S D T and U S D C. Rather than trying to adopt something like Bitcoin as aform of payment because I think as long as we will solve self custody problemand ev everybody will be aware of it we will be on a completely next level interms of access to.

Paymentinfrastructure globally. And I think Bitcoin actually creates this extrafriction to it because there is always this aspect of co conversion betweenBitcoin and local currency that is much less predictable than conversion ofdollar or used say of, of that.  

Mike:Yeah, that's a good point.  

Do you see the OttrWallet as being. Similar to Cash App in the sense that I think Cash App, whenyou buy crypto and Cash app, you can't transfer it outside. So I can't justtransfer it to my own ledger wallet. It's like trapped within the cash appecosystem. That's also how what's that other app?

Is another popularVenmo? No, no, no. It became under scrutiny recently because of the, uh mm-hmm.Trading GameStop. It's on the tip of my tongue. It'll come to me, but they,they, they allow you to buy crypto in there, but they don't allow you to tradeoutside. Is that something you think has to happen by reg, by regulationreasons?

Or do you see theOtter being a place where you can make these trades, but also just exchange itfor other currencies in the open ecosystem of crypto?  

Aleksei:Well, Ottr is designed very differently from Cash app because mm-hmm. Selfcustody is a core of our product, so you always have full control of yourfunds.

That means we don'tdecide who you can send your crypto to. So, so all crypto you hold in Autowallet you can send to any address within Solana blockchain and which include Usdc, Solana and a lot of other tokens that they're available. And even moreactually circle is releasing this product that will allow us.

PermissionPermissionlessly breach, U S D C to any other chain. So with that in next Ithink three months, you would be able to send U S D C from auto wallet that isSolana based wallet to an Ethereum based or polygon based wallet. So you havelike actually full freedom to move your U S D C to any other chain.

So yeah, so cool.That's a big difference. Yeah. Yeah. Definitely planning to keep, keep it open,you Yeah. And, and yeah, as long as you have those funds, you can send italmost anywhere.  

Mike:Yeah. And, and this is not, so you were at Cash App for a while. You were anearly engineer there or an engineer there. Did you start to see the company.

Going in adirection that you felt like not to criticize Cash App, that's not what I'mtrying to do, but what are they trying to do and why? Did you feel like it wasnecessary to go and start a new thing?  

Aleksei:No, that's a great question. Yeah, I actually have a lot of respect for CashApp leadership and Jack, I think the part that made me start the company wasto.

Things that Icouldn't do at Cash App. One is that I, I think Cash App and Block in generalare a hundred percent focused on Bitcoin. And when I, and, and we talked alittle bit about Bitcoin just a few minutes ago, I didn't feel that Bitcoin isthe right foundation to. To essentially create an open financial platform on,on top of blockchain.

That's why if I wantedto invest my time building something on Solana, I couldn't continue that atCash App. And I think another problem is Like historically cash app was createdas a centralized custodian of Bitcoin and it just technically really difficultfor them to move away from that model to a self custody.

And another problemwith Bitcoin self custody, if you, if you go there the Bitcoin transactions arevery slow. And. Then like when you transfer Bitcoin between cash up accounts,you essentially just change balances on in cash up database. You're not reallytransferring any Bitcoin, but that's why like for cash up to really create aproduct that will be sell will will be based on self cus self custody.

It'll be reallyhard to, to do it on Bitcoin while like preserving this experience of beingfast. And I think this were the main reasons why I felt like that dream of openfinancial system that anyone in the world can easily access and transact superfast was not possible while like I was working at Cash App and that's what Iwanted to solve with auto when I left.

Mike:Yeah, no, I mean, it's an amazingly obvious and important mission to just sayanyone anywhere can send us dollars to start with on the form of U S D C toanybody else in the world. And I imagine you guys have some, you'll be limitedinto the regulations of the countries that people are in. You know, youmentioned the Argentinian regulation.

Mm-hmm. So thatwould be imposed on the banking side, and, and that would be something you guysjust share with them saying you're only allowed to move this much. Um mm-hmm.Ultimately, you can still move money. And I think that opens the door. It likeopens the floodgates. To the global economy in a much easier way.

You could see this,unlike wise, transfer wise started to do it. I think they broke open the doorin, in the biggest way, obviously union Western Union, you know, was theoriginal. Mm-hmm. They're the og unlike international payments. And I kind ofsee you guys as like the third wave where you had Western Union.

Taking cash andfiat all across the world, and then you have transfer wise operating on thebanking rails and then, you know, crypto operating on, on the crypto rails. So,yeah, I really, I really enjoyed our conversation. I, I hope you guys continueto grow. Is there anything that you are looking for or would help you guyscontinue to see success, particularly on a.

Systemic level.Like what, what can we, what can listeners do to help support crypto? I, I'm soconfident in you and your team, but, but I wanna make sure that the regulationsand the, and the support, like if the government were to say, Hey, there's nomore crypto. It's like we're, we're all out of business.

Yeah. What do, whatdo people do?

Aleksei:No, that, that, that's a great question. I think one is to start. Like activelyusing those products and not, not, not just er, you can even like start usingCoinbase to send money to each other. That will still in then contribute ofadoption of stable coins as a form of payment.

I, I think, Iactually think that Coinbase is doing a lot of. Good work in terms of likeimproving the regulation, and it'll be very interesting to see how this recents e c case will be evolving. I think one actually very cool but hidden featurein Coinbase that exists is that you can go. To the Coinbase app go to like, Ithink like somewhere in the settings, and then you can find this menu thatbasically allow you to see all the different politicians in your state.

And they're andthey're basically stands on crypto and. I think like using this tool, you canessentially predict, depending on who you will vote for in your, like eachstate, like how the regulation will evolve. So yeah, yeah, kind of like givingfree ads to point base, but, but I think it's a, it's a very important andhidden feature inside it.

Maybe, maybe weshould build it, but yeah, you can clearly see. Like every politician and how,how they supporting like reg regulations Yeah. Around crypto. And it reallymatters on each state level because, for example, when we launched our, likebanking product like it's, it's not available for people in New York statebecause New York like, Create like this impossible regulation that basicallyprevent people from connecting to existing banking system.

And I think it'slike purely driven by like subsidies from like some maybe Wall Street actors orlike big bank actors to, to, to just cut their access. And this is definitelylike, if that will continue from New York State to others, then yeah, peoplewill just not be able to connect their banks and will com will kind of getstuck in the old system.

So. Don't be likeNew York. Be like, no,  

Mike:California is California more pro crypto.

Aleksei: Ithink it's, it's kind of neutral. I hope it. I, I think if you actually look atsome of the politicians on that list, it can easily become anti crypto. So it'simportant to yeah, kind of like keep an eye on it, but yeah.

Now talking aboutit, we need to add this feature to Twitter.

Mike:You should, you abso, I mean this, this is it. Like this is, this is, we're inlike a digital, political war on this and. It's like I, I, this is why I'mlike, everyone's gotta be pushing towards this, like tweeting at your senatorsand your representatives.

I mean, Florida andTexas, Wyoming famously passed out laws. It seems like red states are leaningmore towards crypto friendly, but, It doesn't have to be the case. So I thinkthat's, that's a hundred percent right. And yeah, Coinbase doesn't need the promotion,but that little feature in there, I'm certainly gonna check out.

Aleksei:Yeah, yeah, yeah. No, this is and I think this is bad when crypto ispoliticized to be like, like, I had all, all or blue. I think it's actuallyneutral to it. And If, if anything it, it will guarantee a much betterpolitical competition in the future. Because I think what we saw last year inCanada is an example when I think with Canadian trackers protest that mm-hmm.

The government,like the, the leading party in the government could reas easily impose. Certainrestriction on supporters of other opinion. And I think that's what I wa I'mworried about states with like debate hitting up around like next election. Thedominating party could easily use like banking system is a form of oppressionfor people who will have a different opinion.

And I think bothparties could. Fall into using this as an instrument. So it's not like specificto Democrats or Republican. It's just like we need to make sure that they won'thave that control. And I think that's what a danger of CBD C. Yeah, becausethey can claim that you did something illegal by like just protesting againstan issue and then suddenly all your money is frozen.

Mike:Yeah, that's worst case scenario. So that's something that I think we need todevelop at a a, a, like a systemic or society-wide immune system against. Andyeah, keep leading into that and congrats on all the progress and I hope youguys keep crushing it. Download Ottr Wallet. All right, Aleksei, I'll let yourun.

Thank you.  

Aleksei:Awesome. Thank you, Mike.