Episode 4: Crypto’s Next Phase? Utility, Regulation & Institutional Adoption

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hey everyone my name is Jesus Burgoa but you can call me Jr and I’m the

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founder and CEO of Social Market and this is my partner Leon Hitchens he’s

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the CMO of Social Market and this is Social Ledger Report i’m excited we had

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a break last week Good Friday and yeah it was Good Friday

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a whirlwind of news especially this week on uh Twitter

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yeah yeah so so I know last week we didn’t give you there were there were

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some big stuff that happened but we couldn’t give it to you the updates

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however uh we were kind of debating whether we should maybe use some of

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those news for this week’s episode but there’s actually some even bigger things

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that we want to cover so let’s kick it off so uh I think the biggest thing we

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saw this week is the Trump memecoin dinner do you have any particular things

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to say about it Leon the fact that it’s a meme coin and Trump and it’s I just

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got so many thoughts on it it’s good and bad i think it’s like

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good for the crypto space but also like the fact that

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it’s a meme coin you know yeah yeah so so so generally meme coins

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are really bad gamles because there’s hardly any utility behind them

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however this is probably the first memecoin I’m seeing that has utility

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which you know I don’t say it lightly however so just to read this Twitter

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post that this guy made which I think it was a really good post he talks about um

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the New York Times is reporting that President Trump has offered a private

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dinner to the top 220 investors in his memecoin which caused his memecoin to

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surge in price the flashy online announcement called it the most

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exclusive invitation in the world a chance to have an intimate private

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dinner with President Trump at his membersonly golf club in Virginia

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followed by a tour at the White House and then you know here’s a link to the

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to the article which we can add it here at the bottom of the description if you

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have access to New York Times so then he goes down to sorry go ahead one thing

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that I was thinking is this feels very much like a the NFTts for a little while

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nftts had these kind of like in-person utilities um board apes specifically

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would throw parties for their holders i’m kind of

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curious one two things they’re calling them investors and then I wonder how

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much like how much they own like in in you

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know in this like how you know how much are like are they

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wells do they own a vast majority of it or is it

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like just a smaller portion and then that’s why also like the fact is I could

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see a bunch of people buying a ton to just get access to Trump

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yes so so I think right off the bat this is probably the most or the biggest

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utility we’ve ever seen because having access to talk to the most powerful

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person in the planet and I don’t say that lightly either is huge it’s a very

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oligarchy kind of thing because you got to pay to win you got to pay to even

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have access to that opportunity so that could also backfire you know having

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giving someone access to that much kind of power so

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uh this guy you know he he talks more about it but I’m not going to I’m not

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going to get into it instead you know why don’t we look at his website so this

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is his website it’s uh gettrumpmemes.com and there’s this

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little you know up on the bottom right well little announcement where he talks

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about it so if you access it you know it gives you more details you can register

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now but really it just takes you so you can buy more Trump meme

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coins right now uh the Trump memecoin I got to refresh it i was

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having issues with my Wi-Fi before this call so all right it won’t work for me

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right now so this is my Coinbase uh right now the coin is about

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$13.14 and it’s high its high was like 34 35

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74 yeah so this is Coinbase so the prices differentiate a little bit or

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fluctuate i mean it’s all preference i mean the fact that you can buy from

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memecoin on Coinbase it’s pretty big i’m not surprised though so especially after

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he got like taken off Facebook and kicked off Twitter and then you know

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became president again but yes like as soon as he launched his coin everybody

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flocked to it and said like we’re going to support it and everything it’s Salana

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based right it’s very much Salana based yeah sorry my Okay so there it is sorry

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for that so if you go to Coin Market Cap which we’ll have the link down below you

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know you can see here it is a Salana smart contract or I think it’s a smart

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contract yeah uh you can have access to you know everything you want to look at

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here where you can buy it i’m not I’m surprised it’s not available on Coinbase

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here but yeah I mean for for this is probably

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a better chart now that I think about it so the alltime high was like $74 on

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Coinbase but here it’s 6976 so right below 70 and for a long time you know it

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was sitting sitting like at $20 recent history was like $8 but then you know

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this last week it surged by like $15 so I think you know maybe at least 30 50%

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if I’m just guesstimating the math but that’s huge degenerates are probably

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capitalizing as we’re speaking so I I think I still think NFTTS have better

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utility than me coins if I’m being honest yes but I I I see the memecoin as

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the new NFT like everyone like NFTs were hot because they were art and this and

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that and people said they’ll hold their value none of that is

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true weren’t most NFTs were Salana based too right a lot of them

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were Ethereum based for a long time and then transaction fees were high or

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rather gas fees you know famously someone spent over a million dollars in

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gas fees trading the board ape NFTts so slowly we started shifting to Salana

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because of those gas fees and now Salana is like the most popular blockchain

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where people are using their money or volume you know volume wise it’s very

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popular so I mean I I I think you bring a good point you think you know meme

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coins are another form of NFTTS i can kind of understand that utility

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wise not the same kind of an art and like a memecoin is going to be the

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closest representation to something in real life like this is a Trump coin

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there’s Melaniacoin i could see you know Cuban like I think Mr beast has talked

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about launching a coin like if these folks tie it to that like it’s just

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another NFT i think these meme coins are a little bit of a fad

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but you tie it to like that you tie it to community like you launch a memecoin

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tied to community you get special like like features if you hold more than $100

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it’s kind of like a if you hold more than $100 in stock in like Carnival

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Cruise Lines you get like a discount same same thought here you know it’s

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kind of like creator coins you know like what do wanted to do yeah so so greater

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coins is very different they’re still to some fashion meme coins or a token in of

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itself for those of you who don’t know so do is the decentralized social

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network decentralized social blockchain I mean and something they did in 2021 is

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they allowed anyone to when they created their account they can automatically

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mint their own token people would buy it they’re effectively investing in you as

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a creator so we’re seeing all kinds of tokens and

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now we’re going to start to see real world assets tokenized or RWA you’re

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going to start hearing RWAS a lot more to that

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point but yeah I other than that Leon I don’t think I have any more thoughts on

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this whole Trump meme fiasco do you have any final thoughts on this no no nothing

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to add there i wish I got invited same same i sold my meme coin i had like

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over $200 at one point but um I lost like Well I I made it i broke even

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because it it went up and then it it went down i didn’t sell but then I sold

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the day of the the inauguration which made me not lose all my money so yeah

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that’s good you You got to take your win sometimes um so anyways so so the next

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story we’re actually talking about Coinbase and PayPal so Coinbase and

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PayPal are two giants in the fintech space

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but recently they just you know decided to merge together well I’m sorry work

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together to work with PayPal’s stable coin and it’s called PYUSD

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so so this is from Coinbase the the part that I just don’t I don’t get PayPal

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stable coin like Oh yeah i I get the stable coin but like I I don’t get how

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it works on PayPal like can I just pay everybody in stable coin and then they

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have a like in theory if I paid people on PayPal stable coin would I save money

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in fees like if I sent somebody in the Philippines $100 would they you know

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have a better rate in stable coin than they would in getting it in their

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currency like I I just I don’t know how PayPal’s going to win here yeah it’s a

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good point so PayPal you know a lot of people don’t like it i don’t fully trust

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PayPal as I once did i still use it for convenience though so you know I’m kind

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of a hypocrite in that sense however PayPal gets it like they understand the

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opportunity with the market here they are attempting to release their own

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token stable coins are probably the most popular because they’re the less you

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know confusing ones there’s less scams happening with stable coins i don’t

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think there’s been any scam with stable coins as of yet but you know in this

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case Coinbase and PayPal are working together because Coinbase is going to

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offer effectively PYUSD in their platform and they’re going to have it at

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a low conversion so I believe it’s zero fee

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yes so on this article from Coinbase you can find the link so also below the

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TLDDR we’re expanding our partnership with PayPal to accelerate adoption

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distribution and utilization of the PayPal USD stable coin that was a bit of

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a mouthful sentence so Coinbase will enhance PYUSD’s utility by supporting

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one-on-one ratio of PYUSDUSD conversions across its

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best-in-class custody and trading platforms and we will explore the

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development of new onchain use cases for PYUSD so that’s the too long going to

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read and one more thing I would like to highlight in this article is the

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adoptions of stable coins for faster lowcost payments is core to Coinbase’s

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mission of accelerating access to financial freedom stable coins are

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already transforming the global payment system with transaction volumes surging

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250% from 6.2 trillion to 22 trillion between 2023 and 2024 our relationship

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with PayPal will take the payment revolution forward

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so that was very close i think the problem that I have with it in the end

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is I get you know it’s a pegged one to one USD i I think it’s an ERC20

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coin it’s backed by this entity called like Pax Paxios or something the problem

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that I have with it is you’re still converting everything into USD so like

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if somebody in Vietnam gets paid with this they’re still going to go to USD

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then they’re still going to have to convert it to their currency

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like it’s just it’s I I see the lack of like I think it’s really cool but I

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don’t see the benefit on PayPal like it’d be one thing if you were beating

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fees on PayPal via this way like if PayPal was like “Hey instead of you know

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getting five to 8% taken from currency exchanges and our fees you’re now like

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getting only 2% taken in theory.” Yeah it would make sense to me but that also

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goes counter to them being a public company and maximizing profits and all

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of that like the good user experience would be you you buy you know you buy

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the stable coin one to one no fee and then you send it and the fee you know is

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whatever the fee is 3% 4% and then PayPal just lets the currency conversion

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happen on the other side because they beat the remitting of payment it’s kind

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of like what Ripple promised with uh

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money what’s that western Union western

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yeah across borders like they were going to use to kind of beat fees and currency

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exchanges so that Western Union would have the lowest fee to send money

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this was precoid preC i don’t know what ever happened to

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that but like that that’s the small part that I’m kind of

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like where where does this benefit the PayPal user you know

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like you bring a good point so so PayPal you

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know still widely used worldwide you know I’ve made payments to contractors

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i’m sure you can also agree with that you know in fact I think you have more

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experience on it than I do yeah I I pay everybody on PayPal just because it’s

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it’s easier like transfer-wise is an okay option but transfer-wise operates

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like a bank paypal is not really a bank like and you know you say you don’t

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trust them i don’t trust them but I don’t keep any money in there like if I

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get money immediately to uh FDI insured bank account like they could shut you

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down tomorrow absolutely same here the the part that I see that’s a benefit

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here is there’s no fees when you send or receive it yeah but when you sell it you

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got standard crypto fees and you can withdraw it to external

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wallets like I think the one really cool part would be if PayPal issued a debit

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card and you you know they do have a debit card if you could access your your

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stable coin via that debit card and draw down off of that you’d beat almost all

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fees and I think that would be really cool because

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because you know you’re talking like if you’re paying with a credit card you

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know you’re 2.9% if you’re doing you know if you don’t have a credit card

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that has foreign transaction fees covered you know there you’ve got

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currency conversion fees like I still think that there’s a long way for PayPal

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to go but it is a good first step i’m just I’m struggling to wrap my head

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around it yeah so so Coinbase and MetaMask you know they’re already

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offering debit cards which which you can use your stable coins you can use even

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your Ethereum or any other L1 tokens so so I wouldn’t be surprised if we will be

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able to use USDC or PYUSD on any PayPal product i mean transaction fees are the

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essence of any business model for any fintech product and payment provider

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like PayPal or Coinbase so you can still expect I would I would still bet that

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you can expect transaction fees they might be lower you know for

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for stable coins and maybe the margin profits for PayPal would be higher but

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you know you can still expect there to be transaction fees at the end of the

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day yeah yeah and and I think if they cut

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the fees they make it better the experience is smoother and you know like

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they offer debit card options all all that stuff I could see this being a

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really cool way for anyone in the world to do it uh to get paid to you know use

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it and then you know be able to like support it in so many ways

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but I I see PayPal tacking on fees you know still doing currency exchanges

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still having the sales of of these cost all of that for sure so other than that

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Leon I don’t have any other thoughts on Coinbase and PayPal do you have any

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other thoughts no no we’ve got one more one more topic and I actually think it’s

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a big important one yes so if you’ve seen a pattern with

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today we’ve been talking about traditional markets well not markets but

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like old standards being broken just because of crypto which what I like

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about these calls in the first place is that we get to kind of see this dynamic

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that is crypto and blockchain intersect with the very dynamics of real world and

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traditional markets so we’ve seen a lot of that today alone however we have one

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more and that is about the Federal Reserve withdrawing crypto guidance for

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banks so I’m not surprised we have a very different administration than we

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did on on 2022 and 2023 so do you have any do you have thoughts for that

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and you’re seeing a really big interest from the traditional banks to engage in

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crypto so the the old guidance um I guess it was 2022 2023 what I I

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don’t recall the year um it said it required banks to ensure crypto

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activities were legally permissible and say signal you know like all all of that

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that’s the new part to it it means that a lot of these banks could start

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engaging in stable coins um and I and I think the reason why stable

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coin is much more appealing than anything else that that is in crypto

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right now is it keeps the traditional finance system alive it keeps the

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regular banks the regular government currencies at the key point it kind of

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turns them into a gold because they have to have a reserve they have to have so

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much cash and they

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they back it that that way versus you know like a Bitcoin which in some ways

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is a you know a digital gold but it it’s kind of an affront to the traditional

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fiat currencies so them saying “Hey this this is the withdrawal of it

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but more than anything these companies are looking at stable coins they’re kind

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of being like hey this is our way to enter it figure out how to do it but

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also do it in a safe way because we were working with companies that are holding

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US dollars and in very large amounts.” Yeah

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so one thing I would expect is the prices of Bitcoin or any other you know

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major blue chip crypto to go up because banks are just going to be buying it for

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a reserve especially Bitcoin but we’re also seeing you know Ethereum and Salana

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being widely adopted as some sort of reserve as well or strategic reserve as

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Trump has labeled it before so you know here it says the Federal

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Reserve on Thursday announced the withdrawal of guidance for banks related

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to their crypto asset and dollar token activities and related changes to its

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expect expectations for these activities these actions ensure that the board’s

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expectations remain aligned with evolving risks and further support

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innovation in the banking system so I mean crypto is already supposed to be

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the financial upgrade that the world needs and what I mean by that is you

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know Western Union you know charges 25% uh transaction fees on crossber transmit

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transmittance and really transaction% holy [ __ ] remittances I mean yeah yeah

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so 25% so if you’re sending $100 to your family in Mexico or something they’re

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going to get $75 and the provider keeps $25 so that’s a lot of money so with

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crypto and stable coins and Bitcoin what it does is it sends that in minutes and

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transaction fees are usually in the dollar

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amount whereas even in Western Union they won’t get their money for like days

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at least so you know you tell me which system is is more efficient so the other

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thing is you know this is an article by Coindesk and here kind of just goes more

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into detail one thing this is Dave Portoi i

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hope I didn’t mispronounce that so he’s also a really good What’s that dave’s

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cool but it doesn’t matter no yeah he’s a really cool guy he’s really smart so

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if you if you guys don’t already know him he gives out really good um no

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[ __ ] kind of advice on the crypto space go were you going to say something

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yeah yeah the other thing I’m thinking about too is I think these banks are

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looking at this as a way to hedge against

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inflation too like if inflation starts hitting and people are realizing it um

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and you know they feel it immediately they might flock more to crypto that’s

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like increasing the demand will go up it will benefit crypto in the long run like

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there’s there’s a few thoughts I have now about the the inflation part

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I could see that it’s just like cash app like when cash app or cash whatever that

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app’s called started offering it i know that

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everybody started flocking to it in the initial days like their volumes on

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crypto trading were increasing significantly people were just buying

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because it was in the app and I feel like if it all of a sudden is in your

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bank account you’re just going to go I could you know I could buy a little bit

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of Bitcoin i’ve got a little bit of savings like maybe I just do it this way

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like it’s going to be much easier because right now it is kind of hard you

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got to go to Coinbase you got to like connect bank accounts you got to go

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through the verification process if it’s just there and then you can you know go

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take it to your Coinbase or you you know do any of that like you could you could

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do it i want them to open this up to credit cards i want my points

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yeah so so credit cards are widely used i think

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that anyone who uses credit cards mostly in America if we can get Bitcoin for

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that that’s a great opportunity there this is all non-financial advice of

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course but you know I use my credit card for everything and all of that is mostly

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just to get cash back so one thing I’ll say

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is this is based on the conversation that Dave Portoi had with the Coindesk

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spokesperson I believe so the Federal Reserve has joined its fellow US banking

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regulators in deleting its crypto guidance for previous years including

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notices that the banks should get pre-approvals before they get involved

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in crypto activity now all three agencies including the Office of the

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Controller of the Currency and the Federal Deposit Insurance Corp have

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joined in reversing those previous policies leaving crypto matters at banks

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in the hands of their managers and compliance executives in the absence of

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guidance the banking industry awaits new laws from Congress to define how the

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digital assets industry should operate in the US so I for

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one I can understand there being a need for regulatory compliance you know my

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background works working with the government the federal government as a

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contractor i can totally understand having a need to protect people you know

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you’re creating a service for people oh there needs to be a set of

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rules but in the last you know in the last you know administration with under

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Biden they were just giving you things to follow like well okay on the crypto

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space there were very very obscure laws that you should follow if you’re a

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business in the crypto space not helpful at all very predatory and

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very you know not necessarily innovative and it blocked a lot of people from

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releasing good products yeah yeah and I think in and it’s going to like push

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innovation together it will most

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definitely so I don’t have any other thoughts on this we’ll just have to wait

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and see what happens we’ll have to wait and see whether this brings a lot of

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good or you know scams become a lot more common hopefully we don’t get I just

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think it’s like any other financial system scams are rampant and you got to

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be smarter and I think education will come and now that crypto isn’t looked

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upon as just a fad or a giant ass pyramid scheme more people are going to

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have education around it and they’re going to start learning about it and

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finding that hey there’s some utility here so I I’m really excited overall for

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what the direction is happening i just I think it’s kind of like early internet

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it’s going to take a long time just like the PayPal thing i I still think there’s

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a lot of flaws in it because we have our traditional finance system and it’s not

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quite caught up but given another 10 years and I think it’s going to be there

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where you know everyone’s kind of just using those cryptos and you can actually

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pay them in a stable coin and they’re not going to be worried about currency

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exchanges they’re just going to use it with maybe you know 2% fee on every

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transaction they do which is truthfully fine absolutely yeah i mean I’m so

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excited for the space i believe in the space i love the technology and I’m very

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optimistic for what the future holds as far as the technology gets more adopted

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right now there’s a lot of bad actors but we’ve seen this in several

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industries not just with crypto it is easier to do with crypto I believe so

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that’s why we’re seeing this big influx of scams but don’t let that discourage

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you if you’re new in crypto whe whether you’re new or crypto just know that

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there’s a lot of promise here and this is potentially going to you know just

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make this world a lot more convenient as far as adopting money making it easier

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to access yes I agree

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yeah great well you know this has been Social Ledger Report i don’t think we

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have any more updates for you all today so just tune in every week and subscribe

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to the channel if you already are not and give this video a like bye yeah take

27:39

care everyone