The Future of Stablecoins and Finance with Maxim Galash

Don't know. I I haven't seen any innovation from Apple except the the iPhone that very similar to my old iPhone since since The same product, with a with more cameras. Yeah. So if they're gonna offer the stable coin, you know, more power to them. Last two years, I mean, going around, you see quite the same narrative attack from different angles.

You know? A new blockchain. It's all transactional business. At the end of the day, all the blockchains make the gas fees. It's all about transactions and user activity.

The activity is low, and retail activity is pretty low right now, and the access is still cumbersome. Welcome back to the scrums.com fintech arena. This is the ultimate podcast for fintech leaders eager to stay at the forefront of industry trends. Today, I have the pleasure of speaking to Max Galash, the founder and CEO of coinchange.io, which is a leading stablecoin technology platform founded in 2018. Under his leadership yeah.

Good to have you here, Max. Under his leadership, CoinChange has been at the forefront of integrating decentralized finance solutions for crypto exchanges, which ultimately means empowering end users to optimize their stable coin returns effortlessly. Max, super excited to have you here, man. Likewise. Thanks.

Thanks for having me. Good brief. To the point. Yeah. Brilliant.

Max, so I think maybe a great place to start is can you explain what coin change does? And then ultimately, you know, what what is your guys' core mission? Yeah. So our mission is bringing Wall Street to the main street. So giving access to a sophisticated investment products to retail clients in emerging markets.

And we do it primarily indirectly, so we offer structured earned products through an API. So our partners, exchanges, and payment platforms can integrate our earned product into their ecosystem so their end clients, merchants, or retail users in those emerging markets have access to stake their USDT and USDC and earn daily interest in that with full liquidity. And, there's different products, but that's kind of the ethos. It's given the access to the Wall Street type products to the Main Street type guys. Amazing.

And and, I mean, you you obviously saw a gap in the market share back in 2018. Right? What what inspired you to found CoinChange? Did you Listen. Do you have experience in the in the Wall Street space?

Yeah. It's a long road. I mean, any any startup goes through ups and downs and, I think a lot of pivots or adjustments to the business plan and the go to market strategy. So in our case, we started as a retail brokerage. The inspiration came from Wise.com, if you know TransferWise.

So that's one of the cross border platforms as well. So I was a Vivid user and very nice and simple and transparent. In Canada, the purchase of the Bitcoin and sale of the asset was really cumbersome and expensive and nontransparent. So in 2018, we kind of embarked onto the path, you know, to build a a transparent, simple brokerage business towards the retail consumers. So that's what actually started Coin Change.

That's the name as Coin Change, change your coin. Right? So that's that was a brokerage, initially. So 2018, we just had an idea on paper, and then we actually started building, I would say, like, mid twenty nineteen, and we took the product to market only in summer twenty twenty one. Because by the time that we went further with the development and you know how development takes.

Right? Say it's a month. You can say multiply it by two at least, right, and budget by three. But we went live in summer twenty twenty one with a retail app that offered a brokerage functionality as well as the earn feature functionality. So and then along the way, we delivered to a b two b and more like an infrastructure player who provides those features through our API to the fintechs of small and medium size.

But the starting point was the wise and the complexity and non transparency of the Canadian market, crypto market. Right now it's different, but back then it wasn't. So we wanted to build a simple easy brokerage for the retail client. Okay. And, I mean, you've you've mentioned your your your APIs that you've built out and and ultimately taking that platform type thinking.

You know, what do you believe sets CoinChange apart from the from the other Stablecoin technology platforms? Yeah. Most of the platforms on the Stablecoin have a pretty simple use case right now. It's all cross border payments. So they offer a wallet and a virtual bank account for their client or merchant.

So when you're onboard and with the platform, you have a wallet to accept stablecoin payment in, and then you can trade it to a local currency and withdraw it to your bank or make a payment. So that's majority of the client facing platforms out there right now, and nobody actually thought through any other major use cases. There are stablecoin issuance platforms like Brex, sorry, Braille and Verg. It's more like, stablecoin issuance and, stablecoin conversions between different blockchains and different stablecoins. We see it on the infrastructure layer when we offer we we we actually do a pretty much an asset management platform.

So we deploy assets into the different types of strategies on DeFi and CeFi markets, and we generate yield. And we structure a product that we offer through an API as well as smart contracts today. We have a vault. So our partner, if it's a non custodial wallet, you see less of those. It's a kind of a MPC wallet.

Then we can offer a vault, so they integrate it. Just different mechanics of integration. But I haven't seen really many infrastructure yield generation platforms. You know there are coins like Ondo, like Athena. It's more like a yield generating stablecoins, and they have different strategies behind them.

So Athena is a stablecoin that has a market neutral strategies on the c five exchanges, so the trade assets on the centralized exchanges. Right? But it's a market neutral strategies that they utilize, and they earn on the the yield and then they distribute it to their clients. Ondo is a pretty much tokenized t bills, right, of chain. Also a token.

So it can be listed in different venues. We are not a token. Right? We provide a structured investment product available through an API or a vault that our partners can integrate into their app, to their ecosystem. So it's a very different approach.

I haven't seen much of that on the market, so more of a blue ocean. But there are different opportunities to generate deal, obviously. In DeFi, everybody pays you rewards, right, for participation. There is a lot of complexity and pretty cumbersome, and you have to be able to find those opportunities yourself and take the risk and measure the risk, right, against your return. So we come in as a professional asset managers with a platform approach, giving you the access to that through any gap.

Very simple. Great. That that's made it a lot clearer, Max. The focus is B2B. Right?

Yeah. When you're dealing with these businesses, are you purely a platform player, or do you offer additional consultative services or at least onboarding services that will allow customers or clients of yours around the world to get the best out of your platform? I would say there's always a bit of professional services. We obviously don't charge for that. You got a wide lift service, right?

You got a personal account manager, you have a personal software architect, software presale manager that will walk you through all the integrations. They'll provide you an integration guide. They'll BBC you through every step of that. We also have the marketing team that will help you to launch the product and, do the activation and campaign marketing. Right?

As you go to market with our product and start marketing that to the end clients. So, yeah, so there's there's definitely a bit of a professional services involved for sure. It's not a fully automated plug and play type approach. Yeah. But, yeah, that's I think that's required for any b two b business today.

Enough. That's not at scale of Stripe. Even Stripe, I'm sure, for the bigger clients, they have activation engineers and presale architecture. Absolutely. And is is there a lot of customization that goes into this, or or are you looking specifically at It's pretty pretty right now rigid API, but, we do change and improve the API and product per client feedback.

Right? There's different examples of that, but pretty much a product manager will gather all necessary requirements, and they'll they'll improve it. Because the market is also moving, we also do introduce new investment products time to time. Great. So, I mean, looking at your products, I think you're heavily involved in the earn API side of things.

What are the benefits rather for businesses integrating with the Earn API? And can you take us through just a high level understanding of that? Because I think that there's a lot of merit to the product and ultimately think that there's a lot of opportunity for businesses and the businesses listening in on this podcast to to benefit from it. Yeah. So if you're a startup, you always have limited resources.

Right? Rather than building your own asset management team or creating your own investment products, structured products, you'll come to us. And, we have Bitcoin yield product. We have Ethereum yield product. We have a stable coin yield product.

We have a Doge linked stake yield products. Right now, we have a portfolio of altcoins that will generate yield on stablecoins so you can package altcoins in the in the portfolio but earn on stablecoins on top of that. So there's different products that we can offer for you to offer, resell, or distribute to your end clients. Right? So without you investing in that, and there's a lot of mistakes, right, you'll make as any other new direction or new business within the business, you'll definitely have to allocate a budget, people, resources, time, right, to do it yourself.

And none of the startups have that. Mostly, they have their core feature. It's a transactional feature quite often. And, either it's an exchange or payment platform, they earn the transactions. Right?

So we offer them an ability to earn on the stable capital that's like the idle capital because we share the revenue as well. So not only they get the new product, but they also get a new revenue stream with that. That's pretty much the benefit for them to use it. And their end clients benefit from keeping the assets on the platform and earning daily yields on that, daily overnight interest on that on that capital. It's like an investment product that doesn't guarantee the return.

Right? So it's daily, and it's different every day. Right? That is gonna be my next question. What what are the risks there?

And and and and how do you handle the risks? Yeah. I mean, listen. This, again, it's a risk management. We've been in the business for long enough.

As I mentioned in the market, we've been since summer twenty twenty one, ups and downs of the market. We've managed hundreds of millions of capital. We went through different regulatory hoops and compliance compliance reviews with the regulators and do know how to manage risk. And, any client and any b two b partner needs to understand the criteria of the product. It doesn't guarantee we're not a bank.

We cannot take your funds and deploy them into the real estate construction and guarantee you 2% a year. What we do, we have a certain p and l that we report to a client daily, and, they see the change of their portfolio value. So it can be negative, can be positive like any other investment product. For the majority of that, we are pretty market neutral, so there is no drawdowns. So it's rarely done.

Client will see any negative p and l on the account. Mostly, it's from the bottom left to the top right, but there can be some fluctuations with that. That's as far as it's clearly stated and the risk disclosure is right in the terms of service and the agreements with the client with the partner, it should be pretty clear that there is no magical, you know, money making machine behind it. It's not an infinite hand. Right?

So there's definitely risks are like with any other investment. Right? Loss of capital or partial loss of capital. Great. Thanks.

I think that's that's clarified quite a bit. I suppose that that probably leads me to the next question then, Max. Who are your ideal clients? Like, who are you targeting? Where does your niche sit?

You know, can I can I, can I take on your your platform and sell that into banks across the world? You know? How are you positioning yourself in the market? So we don't go to the big guys. So we all small guys compete with the big guys.

Right? So small exchanges, small payment platforms. If you look at Binance, right, global player, they offer all the products that we offer right now. They have Binance flags. They have Binance fixed.

They have Binance earn, Binance dual investments. They have different types of investments in their products. Depending on your jurisdiction, but they offer it for the majority of the markets that we target, emerging markets, they do offer those products there. So we will come to a smaller exchange that's local. I don't know.

Lagos, right, Nigeria or South Africa, and we'll offer them that feature. Also, guys, you're competing with Binance. When you have a transactional business, you have a your community. Right? You you you win because you were there.

Like, you're winning the market share because you're local. But we'll give you that functionality that, Okay. Here's the here's the investment products. Here's an API. Here's here's what we work with.

Here's the other exchanges. Here's another case studies. Right? So we give them the data as well to learn so they understand how they make money, how do they help their clients, and how they compete. Right?

So it helps them to compete with that. So we go to a mid market and small market. We don't go to the top usually. The first even the largest exchange on the country, usually, we don't really target them. We go to the second, third, fourth largest in that country.

And primarily, it is again, it's crypto exchanges. It's crypto payment platforms. So, like, coin payments, .com, Coinspade. So those guys who would offer wallets to accept payments. Right?

So Yeah. Because they always have some their merchants, their users always have some some crypto sitting on those wallets. Right? And they wanna monetize that, and they wanna offer that yield to the end client. So exchanges, crypto payment platforms, and neobanks that have wallets as well.

So those three types, we will go to them, and it's a small and medium market and, work with them to offer this type of product to their end client. Okay. Great. And I suppose talking about the big guys. Right?

I think, trending at the moment is, of course, you know, Trump and, and Musk looking at trying to create federal reserves specifically in the crypto space. There's also rumors of of Apple launching their large organizational stablecoin. What do you think of those rumors as it stands? And, do you think that there's there's merit for that? I think it's good for them.

I don't know. I I haven't seen any innovation from Apple except the iPhone that very similar to my old iPhone since since a while. So they can have long term the same product, with with more cameras. So they're gonna offer the stable coin, you know, more power to them. But overall, I haven't seen a lot of innovation, to be honest, in the blockchain for a while.

Last two years, I mean, going around, you see quite the same narrative attack from different angles. You know, a new blockchain. It's all transactional business. At the end of the day, all the blockchains make the gas fees. It's all about transactions and user activity.

The activity is low, and retail activity is pretty low right now, and the access is still cumbersome. Right? So especially to the on the DeFi ecosystem. Right? I mean, CeFi, Binance has the volumes, obviously.

One of the few in the world. Right? There's probably a top 10 exchanges in the world that really have some cool volume, not because of the retail, mostly because of the hedge funds. But I haven't seen much of the innovation in the native crypto land. And there's some people are trailing that it's gonna be a next Internet, but I doubt that there's gonna be that much of an impact as an Internet had and, even not close to AI.

I mean, AI is already out there. You're using AI probably. I do all the time. Right? It's already integrated into a lot of Gmails and other apps that we use.

Blockchain is still pretty much far away. I think the first we always knew that the first use case that's why we're kinda focused on Stablecoin, will be a real use case real world use case is gonna be a stable, and it's gonna be a pain. So that's gonna happen for sure. It's gonna be embedded into the existing financial infrastructure. It's gonna be seamless.

It's gonna be not noticeable for the end client through the web to app, but the backbone is gonna be the blockchain. But so far, I mean, nothing nothing else. Maybe Apple will trail the way with their stablecoin. Yeah. Yeah.

Because I mean, it's Apple Apple has the ability to force the Apple stablecoin into into Apple Pay, whatever it may be. Obviously, they have to to open it up to the end user to to decide on how they wanna transact, but I think they have the you know, I'm not too sure how many Apple phones there are across the world. But but but back to that question there, you know, Apple has the ability to to force those transactions, which ultimately will will get scale in transactions. And I think that it's probably the largest company in the world pushing pushing for the most amount of, transactions could make an impact. I mean, it's it's all speculation as it is right now.

But but I think due to that, they they could be some error. I don't know what your thoughts are. I don't know. There's a lot of, right now, there's a lot of businesses that are trying to crack that. You know, banks, especially in LatAm.

Like, there have already been banks can offer a wallet, a crypto wallet in Brazil as an example. Right? So they they also in Mexico, there's a big corridor between Mexico and The US on remittance. Right? And Circle is working with the biggest banks as well and biggest telecom providers to embed that into the their ecosystems with telecom apps, telecom SMS messaging.

And, I think I think Apple with a stable coin, to be honest, I I'm not really won't that big on that. I don't think they can really roll it out fast enough and globally because there's a lot of compliance again, issues. I mean, the Stablecoin act in The US. There is MICA in Europe. There is, quite often, it requires some kind of a close to banking license or close to EMI license.

I don't know if they wanna be in the if they have or wanna be in that business. Probably the Stablecoin use case for them probably can be just, to their Apple card. You know? You can top it up with a Stablecoin that's their own. It's at the part of USDC.

I don't even know why to issue your own Stablecoin. Like, I mean, kind of for Revolut and for some other, you have to have a distribution. Anybody can offer a stablecoin. I can issue mine in two minutes. Alright?

It was Braille and some other vendors, but you have to have a distribution for that. Then there's also a differentiated factor. Either if you have no distribution, you have to have a differentiating factor. Try to get the distribution in the existing market. And, again, Athena, they have, like, 6,000,000,000 under management.

Why? Because they're paying 12% of their stable coin. Right? And they were first in the market, what, they launched, like, two, three years ago with that new kind of c five, d five strategy, so tokenize and c five yield through us through a yield bearing stable coin. But, I don't have that.

I don't think Apple has enough risk appetite to do anything like that. And, it's gonna be something That makes sense. So It makes sense. And and I suppose that those are, you know, they are they are challenges in the space. Right?

Regulatory, some of the other ones that you've mentioned there. But I think that the the main thing is, you know, going back to coin change and saying, when when facing these challenges, whether it's not scaling fast enough or, you know, there's not enough adoption across even from a B2B perspective, whatever it may be, you know, what is Coin Change doing to to address some of these challenges? Yeah. So the market isn't scaling enough or there's no adoption. We have many other we have some other products as well.

We have a gift card offer app product. So if you're an exchange or payment platform or a wallet, you wanna offer your end clients ability to buy, gift cards with crypto. So when I say gift card, it's a Walmart, Google, Amazon, Apple. Right? Or, we can offer that as a white label product.

So there's a product called Bitrefill out there. I don't know if you're familiar with that Bitrefill, and they offer direct to consumer cards, gift cards. We do offer that Bitrefill white label product. So it's our own product, but, I mean, the comparison is a Bitrefill but white label. Right?

So the end client can integrate API and offer the gift cards to their end clients, and we have quite a bit of those. We do have a brokerage as well that's fully licensed in Europe and US and Canada, and we can offer people an ability to buy and sell their Bitcoin, stablecoin, and many other currencies as well. So it's think about Coinbase Prime. So we are also competing there with that line of business. Most recently, we started a hedge fund out of Gibraltar.

So crypto hedge fund, pretty much an institutional trading business when you face family offices and capital allocators. So you have to be able to diversify your business large enough, but you still have to have a core business that generates revenue to reinvest into your business lines. To be resilient, you have to in crypto specifically, you have to be because the market is so old and unexpected, so you have to be able to generate revenue through different means. Essentially being innovative every single day, looking at how you can diversify and ultimately Yeah. Find that that that big break in terms of the adoption side because as you've mentioned Yeah.

It applies to any business pretty much, but in crypto specifically because of the speed of the market. Okay. And and, Max, you know, quick fire question here just to just to close things off. What's your favorite book and and why? Is it is it crypto based?

No. No. I like Russian literature. So Dostoevsky. I don't know if you're familiar with that guy.

He has a book called Idiot. It was about the character who was doing the controversy, and they ever controversial to the crowds all the time, and people thought he's an idiot. They called him idiot. But, he was actually right most often of the times rather than not. So it's it's a pretty good book to read.

Most recently, I was reading Bulgakov as well. Yeah. So, like, some some old time Russian literature. Plus, he's an American American, I like that. I need to I need to, pick up my understanding of Russian literature, Max.

I'll I'll definitely go ahead and Right. It's more like it's more like it's more based on the it's more fiction. Right? Then also, I don't really have much time to do that no more. But, because I have their kids.

I have a business to run, read, and but if I do read right now, primarily, it's around finance, asset management, startups, marketing, but still, like, fiction business driven. Just to recycle something in your hand, you know, get it out of there when you read fiction. It's just you leave someone else's life, right, kind of through your imagination. So it gives you an ability to a little bit distract yourself from the ongoing day to day grind. Right?

So Yeah. The the the constant grind. It's always good to to have a little bit of a break there. But, Max, thank you so much, man. That that this twenty odd minutes has gone a lot faster than than I would have wanted it to.

I think there's a lot of interesting topics here. But thank you so much for for sharing your experience. Pleasure. Yeah. It was great talking to you, man.

Thanks for having me. To everyone else, you know, if you guys found today's conversation valuable, you wanna stay ahead of the trends, subscribe to our podcast. Go and check out changecoin.i own and, ultimately, come up to terms with the world's most influential fintech leaders. But thank you so much. Until then, keep innovating.

If you found today's conversation valuable and you want to stay ahead of the trends by subscribing to our podcast, then join us next time as we continue to uncover the stories and strategies behind the world's top fintech leaders. Until then, keep innovating, and remember that the future of finance is just the conversation away. Thank you for listening.