Tony McLaughlin, the Citi architect of the Regulated Liability Network for tokenized deposits, has launched his new venture, Ubyx. It aims to create a network of banks and fintechs to redeem stablecoins directly into recipient bank accounts. Likewise, people could convert from bank balances into stablecoins to make cross border payments. We provided a brief write up a couple of months ago, but Mr McLaughlin has now completed his gardening leave.
This is a key piece of the stablecoin puzzle that is currently missing. Two stablecoin infrastructure firms have been recently acquired – Stripe bought Bridge for $1.1 billion and MoonPay bought Iron. Both provide APIs to enable businesses to use stablecoins for payments – whether it’s SpaceX repatriating money for foreign Starlink sales, or a freelancing platform making mass payouts to contractors.
The challenge is once the stablecoin reaches its destination – SpaceX HQ or the freelancer – what do they do with the stablecoin? SpaceX is a little different because it might have a direct relationship with the stablecoin issuer to redeem the stablecoin to a bank account. But most people are not large enough, so they would sell their stablecoins to a crypto exchange and request the crypto exchange to make a transfer to their bank account. First time recipients have to sign up to a crypto exchange first. Wouldn’t it be better to cut out the crypto exchange, and go directly from the stablecoin to the bank?
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