Author: Payment 201
In episode 15 of Money Code , hosts Chuk Okpolugo and Raj Parekh invited Jackie Reses , Chairman and CEO of Lead Bank , as a guest. They delved into the following core questions:
Why do stablecoin payments rely heavily on banks, a regulated "plumbing" system, in ways that are "unseen"?
How can compliance automation be transformed from a cost center into a real competitive advantage for products?
And one of the most important but often overlooked second-order risks brought about by the large-scale growth of stablecoins is that before local credit creation finds an alternative mechanism, it may first weaken the deposit base of community banks, thereby impacting the local financial system.
Narration/Opening of the program:
This is Money Code. It's a show where we break down stablecoins and programmable money. I'm your host, Chuck Okpolugo , author of *Stablecoin Blueprint*. I co-host this show with my co-host , Raj Parekh , Head of Stablecoins and Payments at Monet. Today's guest is Jackie Reses , Chairman and CEO of Lead Bank, arguably one of the most important bankers in the stablecoin space . Welcome, Jackie.
Jackie Reses:
I'm very happy to be here.
Chuck Okpolugo:
Today we're going to break down the "bank layer" in stablecoin payments . Why should you care about this? Because—stablecoins cannot function without a banking system. And now, Lead Bank is becoming the key infrastructure pipeline behind the industry's largest stablecoin payment player . Jackie has transformed a community bank in Kansas City into a fintech infrastructure-level bank. This is the second time she's built a bank from scratch . If you've ever deposited or withdrawn stablecoins through a virtual account, you 've likely been using Lead Bank behind the scenes without even realizing it. No one is better suited than Jackie to explain the payment pathways, compliance, and the true relationship between banks and on-chain currencies.
Before we begin, a quick disclaimer: "Money Code" is produced by Stablecoin Media and supported by BVNK . The views expressed by the host and guests in this program are solely their own and do not represent their respective companies, nor do they constitute any investment advice or other form of advice. Okay, let's begin.
Jackie, for those who aren't familiar with Lead Bank, could you tell us the story of Lead Bank? What specific market gap did you initially see? And how did it become such a crucial player in the recent growth of stablecoin payments?
Jackie Reses:
Yes, I really appreciate your introduction. To be honest, it warmed my heart, and I believe it made our team and our clients very happy as well.
Lead Bank's origins actually stemmed from a problem. And I've always believed that starting with a problem is the best way to build new products. When I was at Block (Square), I was in charge of financial services products. During that time, I discovered a problem that permeated the entire ecosystem: the banking system supporting Square's products was the weakest layer of its infrastructure. And it was a completely different era. Remember, it was 2015. We started thinking: should we buy a bank, or build one from scratch? A lot happened afterward. Many infrastructure companies were built up. But at that time, there was simply no institution like Lead Bank in the system. So I initially took a different path: trying to acquire a bank. But that path failed.
We weren't very far along in the FDIC process. They told us that because this was a completely new business line, we actually had to rewrite the entire application process, just like applying for a new bank (de novo charter). So, my team and I sat down and decided: we'll build our own bank. We started from writing the first line of code, from writing the first policy document.
One of my co-founders, who was also a colleague of mine at Square, and I accomplished these things together. We knew it was a headwind, because the industry had never seen a bank like the one we were trying to build before.
Jackie Reses:
So we went through a five-year process. During that time, we did a lot of things, such as working very closely with multiple regulatory agencies to explain how algorithmic lending works, how machine learning models function, and the role of AI-driven models in underwriting and lending. Therefore, before finally receiving approval, our path took many detours and detours, and we went in many directions that weren't initially expected. Ultimately, not long after we finally received approval, I left Square and went on to buy my own bank .
I accomplished this with three colleagues from Square, who had also been involved in building Square's banking system. Because we were very clear about the problem itself, and because we had gone through five years of mistakes and learning, it gave us an opportunity to start over and rebuild from the ground up. But this time, we had a deep understanding that permeated the entire organization from top to bottom. Therefore, we were able to fully apply that five-year experience to building Lead Bank and transform it into a bank that I believe truly brings value to the industry .
Raj Parekh:
Yes, it's truly incredible. As Chuck mentioned earlier, much of the infrastructure and building blocks we see today are actually supported by you at the underlying level. Perhaps you could tell us—how did you earn the trust of regulators, startups, and large enterprises? We know you have a fairly large customer base now, but building that trust from scratch takes time. How did you achieve this scale and influence step by step?
Jackie Reses:
Yes, I think there are several aspects.
First of all, I really appreciate you saying that. These comments make me feel great. Lead Bank is owned by a group of people, and we genuinely care about what we're doing. For me, I see what I do as a "hobby," not a job. I wake up seven days a week thinking about our customers, about the products we're building, and about the anxieties we feel about regulatory issues. So I think when you love something as much as I do, as much as my colleagues do, you pour your heart and soul into it. I hope our customers, and the wider ecosystem, feel that. I don't mean to get too emotional or sentimental when discussing financial services products, but this is truly how I feel.
At the regulatory level, several dynamic factors set Lead Bank apart.
One of these is our comprehensive automated system for compliance and anomaly detection . This system itself is quite unique within the entire banking system. It allows us to work with our clients to view issues from a "risk-adaptive" perspective—that is, where is the real risk? Because we can see anomalies based on client behavior in real time . These codes and systems make us smarter in our collaboration with clients.
Because in risk management, you have a choice: either "check-off" compliance or "substantive" compliance. We choose to manage both. If there are some formal checks that regulations require us to complete, that's fine, we'll do them. But if we can calibrate risk on what truly matters, rather than outdated regulatory legacy logic that may stem from 1978, then we will. We prefer to focus on the complexity of current products , rather than some pre-digital-era monetary assumption that has somehow been ingrained in the regulatory framework.
The second point is: We have a truly remarkable team.
I believe our legal and compliance team is unparalleled. Many of them come from our client side. Therefore, they understand what it's like to build a product from the "other side." Because they are builders themselves, they know what risks truly need to be addressed and how to help great companies scale. I think this is the most important point. Because "risk on/off" and "picking the best companies and helping them grow" are two completely different things. And I often find that truly great companies proactively embrace compliance because they don't want to make mistakes regarding their clients' funds. They know the consequences of these things are too severe to afford.
Therefore, when we can collaborate with our customers using sound judgment, product expertise, and automated systems to help them expand in a regulated environment, we build a very strong partnership. Regulatory bodies also recognize this.
There's something else about our relationship with regulators that I think is very important and sets us apart. While I know we're not the only ones doing this—there are certainly many excellent players in the industry—it's this: we're very proactive in presenting our projects and discussing what we're doing with regulators. Even things we're not currently working on, but we think might have future issues, we proactively discuss with regulators.
We will put things on the table:
Explain what we are doing
Explain where we believe there might be risks.
Explain how we intend to mitigate these risks.
Then seek the judgment of regulatory colleagues.
Because we prefer to identify problems very early on and ensure that the regulators' judgment is incorporated into what we are doing. So I think we are very proactive in our cooperation with regulators. We have never encountered any major problems. We are fortunate to have built a very good relationship with regulators.
And the basis of this relationship lies in:
Confront the problems we discover ourselves
Acknowledge and show the mistakes we have made
Be honest about things we don't know
I believe that this transparency and honesty will be very helpful to us in the long run.
Furthermore, we have long collaborated extensively with the Federal Reserve Bank of Kansas City, the Federal Reserve's innovation team in Washington, and the FDIC. Together, we have researched innovative policies surrounding crypto and digital assets, such as the "red flags" identification mechanism. To this end, we have authored numerous documents to support broader industry awareness of these issues. Moreover, we proactively contribute our time whenever possible—whether it's a committee, an innovation event, or any regulatory body that wants to hear from frontline practitioners. I have also personally presented anonymized "red flag" cases, demonstrating situations I believe are problematic and emerging trends that I observe. Because we are at the forefront, we are among the first to see these changes.
And it is precisely because we continue this dialogue that we are able to better serve our customers. We are able to help customers solve problems in a way that I believe is smarter, and in some cases, do things that other banks cannot. That's a long answer.
Raj Parekh:
No, that's a very good answer.
Chuck Okpolugo:
Furthermore, I think the points you just mentioned are all worth exploring in more detail:
Proactive dialogue with regulators
Modern machine learning, code-driven risk management systems
Working closely with clients, anticipating problems in advance, and bringing them to the attention of regulators.
These fundamentals constitute your differentiating capabilities.
So, what exactly do these capabilities enable you to do? Are there any real-world use cases you can share? For example, one example that immediately comes to mind is that you can complete onboarding very quickly and access clients that would be too "tricky" for other banks.
Jackie Reses:
Absolutely correct.
We once had a client who was a very small stablecoin company. A few years ago, they were laid off by their previous bank because that bank decided to discontinue its digital asset business. We connected with them at that time. They had very few employees then, and were still learning and building their compliance capabilities.
Now, they have grown into a multi-billion dollar stablecoin company, one of the most watched globally . They have an exceptional attitude towards building their compliance team. They meticulously constructed the functionalities necessary for customer trust. They assembled a world-class fin crimes team, led by a highly qualified and high-quality leader with experience in the financial system and the military. You could tell at a glance: this was an A+ level team. Even though they were still growing, we were willing to grow with them because they were willing to work alongside us. We invested our time and resources in them because we believed they already had an A+ core team and the ability to continue attracting A+ talent.
Therefore, we connect with all types of clients. We don't just serve large clients; we also connect with very small teams. These clients often come from referrals from investors, founders, or compliance officers we know. Of course, we can't connect with everyone.
But when we see a truly outstanding team with the right attitude and a willingness to climb the compliance learning curve quickly and diligently, we proactively get involved and support them in every way we can. It's a really cool thing.
Chuck Okpolugo:
From your description, I sense a very clear common thread: you're bringing a Silicon Valley-style technological DNA to the "building a bank" project. You treat almost every component as a product. I think this is very obvious and very prominent.
Jackie Reses:
Yes. In fact, everything is a product .
This even includes our compliance team. This is a very important dynamic within us, and one of the reasons I believe our compliance team is among the top teams in the industry. They are truly exceptional. Because their job is front-of-house , not back-office cost structures. They are directly on the front lines. They are almost like a sales team. In fact, we don't have a formal sales team. We have zero sales team .
But our compliance team stands directly in front of the world's best fintech, consumer, e-commerce, and crypto companies. This requires a very special type of person. You must:
Understand your own work
Understanding the customer's product
Able to defend these products
And able to advise the world's best companies.
In many cases, these companies are top players in their respective industries. You have to be at a very high level to work in such a team. And the reason we can recruit these people is precisely because their work is visible . They are not hidden in the background, treated as a cost center.
So I think that's what makes our team so special, and why they want to work at Lead. Because they get this experience, working with really great clients. I really love our clients. They're all very "rockstars." We work with a truly amazing group of people. When your competitors, your partners, are like that, you're excited about your work every day.
Chuck Okpolugo:
Of course, not everyone is.
Jackie Reses:
Yes, not every single one, but most of them are.
Chuck Okpolugo:
No, this is really great. Because you can treat compliance as a "check-off" back-end function. But when you treat it as a product and introduce that rigor, that sense of framework, truly listen to the customer, and iterate continuously, it becomes incredibly powerful.
Jackie Reses:
Yes, compliance itself is an advantage. Compliance itself is a value proposition. We certainly see it that way. And there's something else. We specifically discussed this at our annual in-person team meeting in Kansas City a month ago.
That is: we have a philosophy about "editing" within the company. We don't allow internal functions to simply "add." They must edit . Have you ever experienced this in a bank: every team wants its own set of documents, its own set of questions, its own set of requirements? But no one really takes a holistic view.
Which ones are essential?
Which ones are duplicates?
Which ones are just annually?
Is it a slightly different way of saying it?
So every year, someone keeps adding things to it. It's really frustrating.
Jackie Reses:
Going back to the question you asked me at the very beginning: What was the starting point of Lead Bank?
It all started with this painful customer experience . When we built Lead Bank, we were building the bank we most wanted to have back in Block (Square). So, everything our internal teams did had to be "edited." There was no "addition without subtraction." If we wanted to add something, we had to delete something else.
Frankly, I even think regulators should do the same. Because ultimately you end up with a constantly layering regulatory framework filled with irrelevant content that has never been removed. In this case, regulation becomes noise , not a signal . And I want our compliance team to provide our clients with a very clear, very strong "signal":
Help them scale
Instead of making noise
Not a problem
Not a sense of defeat
It's not a lack of product understanding
This is how we run our legal and compliance team.
Chuck Okpolugo:
This is actually a project management philosophy. It's really great, and it's a good testament to everything you've built so far. You also recently made a very important move. You announced the acquisition of the Loop Crypto team. We know Eleni very well. Could you tell us about it?
The reason for this acquisition
The underlying considerations
This also gives the impression that Lead is not resting on its laurels, but will continue to move forward.
Jackie Reses:
Yes, it's not a stop at all. Eleni and her co-founder Shane are both amazing. There are actually a few very important reasons why we wanted to acquire this company. First and foremost, it's the team itself .
Secondly, there's their expertise in the direction we're building . Let me start with the team. They are incredibly humble, incredibly intelligent, possess a very high level of raw intelligence, have a strong work ethic, and are truly wonderful people. Lead is a company with a very customer-centric culture that emphasizes innovation while remaining humble. We take things seriously, but we don't take ourselves too seriously. We enjoy the process, we like good people, and we work with good people. We're not a bunch of jerks. Therefore, it's very important to us whether the team members can get along well. Because I want our wonderful company culture to continue along this path—a culture of humility, fun, and intelligence. And I think the Loop team is a perfect fit in that regard.
Secondly, in terms of capabilities, they possess extremely strong expertise in stablecoin payments . This is precisely the area we have been highly focused on. You have already seen our investment in this area at the client level. You have also seen our desire to become Tempo's design partner and to engage in deeper collaboration on their blockchain. This acquisition is a continuation of the same strategic logic. These products are all very important to us and are very much in line with our core values.
Chuck Okpolugo:
That's really great. And I completely agree with you. They are indeed outstanding founders. To help everyone understand Lead Bank's technology and product structure, I think the bank's "underlying structure" isn't intuitive for most people.
Could you briefly describe what makes Lead Bank different? What services do you offer? And why is your API layer so popular with customers?
Jackie Reses:
This question can actually be answered from many angles. I'll try to make it suitable for podcast listeners, because I know nobody really wants to look at our architecture diagram line by line.
Lead Bank is a completely custom-built infrastructure, from top to bottom . Everything, from the highest level to the lowest, was built by Lead's engineers themselves. Our products exist as APIs , which are integrated into the clients' development teams' own product systems. Our APIs—100% built by Lead itself .
At a fundamental level, our APIs roughly cover five major product categories:
The first category is stablecoins, which are what we're discussing today . Around stablecoins, we've built a much broader portfolio of products.
The other four categories are:
Money movement
Issuing and issuing cards
Lending
Accounts
These things might sound ordinary, even a bit like banking features from the 1990s. But these features are highly innovative in their construction and logical design . This is reflected not only in how the APIs are built, but also in how we deliver these capabilities, along with higher-level services, to our customers.
Taking stablecoins as an example, you can freely combine these primitives to build various product forms. One end could be stablecoin reserve management, the other could be card product functionality, or it could be rapidly generating millions of accounts. All of this is a fully automated system . Based on the end-customer's needs, we piece these components together to provide them with a complete set of banking and financial service capabilities. The customer's engineering team then integrates these capabilities into their existing systems. They are deeply integrated with our banking technology stack, but they can still deploy these capabilities in a fully customized way to build the customer or business experience they truly desire.
Chuck Okpolugo:
Now that you've discussed stablecoins as a product and clearly considered how they can be integrated into the overall product ecosystem, let's return to the core question we raised at the beginning of today: the evolution of the financial system. Banks play a crucial role in this. How do you think banks, especially bankers, should view stablecoins? Perhaps you could discuss this in the context of different types of banks in the United States.
Jackie Reses:
You know, I think this is a very difficult problem for banks . There are about 5,000 banks in the United States. In my opinion, only about 100 of them really need to consider stablecoins as a "core strategic priority. "
These banks must think carefully:
What is your own payment track?
What payment products do you offer?
How does money circulate within the system?
How will I compete in this system?
But beneath this, looking from the "bottom" upwards, there exists a group with a completely different demand structure .
So I'll start from the "bottom line." There are about 4,000 community banks in the United States . I don't think your audience has much empathy for the community banking system. I'm not trying to speak for you, but it's probably not something you think about often. And I'm very concerned about those 4,000 community banks . Frankly, I'm concerned about the stability of the American economic system . Because as soon as we start talking about trillions of dollars flowing from the banking system to stablecoins, it means: that money came from the banking system .
Therefore, when the Treasury Secretary mentions $3 trillion in stablecoin assets, you should assume that this money is "flowing out." The entire US banking system is approximately $20 trillion in size. Therefore, I believe that the most vulnerable banks in the US will face the greatest risk of deposit outflows.
So, if you've never worried about community banks before, think back to the COVID era. We suddenly became incredibly empathetic: we cared where we got haircuts, which restaurants we went to, whether our doctors were local, and whether there were still retail stores serving us. It was as if overnight, we became extremely sensitive to our "neighborhood." I'm very concerned that if funds flow out of the banking system too quickly and on too large a scale, community banks across the United States will begin to fail. Therefore, I very much hope to see:
Some kind of stabilization mechanism
Or a new product line
This enables small banks to truly collaborate with the stablecoin and digital asset space .
Jackie Reses:
Because there's one more thing I firmly believe: in the future, there should be no distinction between digital and non-digital assets. They will become a unified, coordinated payment system. You simply choose one according to your needs. But let's pause here for now; I can return to this topic later if you wish.
Now let's return to the banks themselves. Many of these banks don't actually need stablecoin products right now . I can see only two areas where they might use stablecoins. But the problem is: they don't have the resources to build these capabilities themselves. So they have to rely on external infrastructure providers to turn these capabilities into mainstream products.
The first direction is: customer-facing wallets . In one wallet, you can manage various different types of assets, just like you manage dollars in the banking system today. I believe that core system providers will eventually realize this and make it available to virtually every bank in the United States.
The second direction is the infrastructure layer . And I believe this is an extremely huge opportunity for the entire industry. Because I think banks will eventually use stablecoin infrastructure, not because, "Great, we're going to use stablecoins now," but because the use case itself is highly relevant and useful to what they're doing. They'll choose it not because it's a stablecoin, but because it's easy to use . That's how I think small banks will eventually integrate into the stablecoin ecosystem.
Jackie Reses:
There are a few things I really hope to see happen. One is that current legislation allows smaller banks—those with assets under $25 billion —to participate actively in the payments and deposits market. This would prevent an asymmetric outflow of funds from the traditional, old-school banking system across the United States to large money center banks or mega money market funds.
The only reason I am concerned about this is that we do not yet have an alternative mechanism to achieve the velocity of money at the local level in the United States.
I really don't know who will be in charge in the future:
Micro and small business loans
Small business loans
Rural loans
It covers the entire United States.
We're too used to the idea that "the community will function on its own." But the truth is: someone had to lend money to that restaurant for it to open. I say this because I used to have an incredibly arrogant view of this . Back when I was involved in building the small business lending business at Square Capital, before establishing connections with the Kansas City Fed, and before I truly owned and ran Lead Bank from a local perspective, I thought I was involved in building one of the best small business lending products in the country. And I thought similar companies—like Stripe Capital—had built excellent small business finance systems. But the reality is: these systems haven't achieved true "universal coverage." Local lending remains the core force driving the velocity of money in local communities. And I don't want to see that force disappear. I don't think we're ready to lose it .
Therefore, I sincerely hope we can find an answer that reassures both the banking system and the crypto industry. Because I don't believe these two must be in conflict. I believe they can absolutely work together . For example:
Where should stablecoin reserves be stored?
What capital adequacy ratio should be allocated to stablecoin reserves?
What types of products can "payment banks" across the United States participate in?
Raj Parekh:
I completely agree. I think we're incredibly fortunate to have a conversation with someone like you. Having built the small business lending system at Square Capital, you have a very clear understanding of what small businesses truly need and where the real gaps are. I think these insights are extremely important and helpful. I'd like to follow up on a few points you mentioned. You mentioned some opportunities :
Building infrastructure
Building the software layer
This allows banks to interact with customers on top of it.
In your opinion, what are the most likely stablecoin use cases for community and regional banks to be implemented in the next few years ? Is it cross-border? Domestic? Or somewhere else?
Jackie Reses:
I believe this is precisely where the biggest contradiction lies . For banks with assets under $1 billion , the use cases for stablecoins are actually quite limited. I remember attending a Federal Reserve event last October. The CEO of Jonah Bank in Wyoming stood up and asked Vlad Tenev, CEO of Robinhood, "What use is cryptocurrency to a bank like ours?" That bank had roughly $500 million in assets. Vlad's response was something like, "Frankly, I'm not sure if there's a clear use case for you today."
Aside from what I mentioned earlier—wallets and infrastructure— the existing payment system in the US is already quite functional, unless banks are handling cross-border payments. Therefore, I don't believe there's a very clear use case for stablecoins for banks with assets under $1 billion. This is precisely why I have deep concerns about the long-term viability of community banks.
Because on the account side: interest-bearing accounts; and on the payment side: the payment moat. I believe these are the only two important moats these banks still have. And I hope they can preserve these moats. Because I truly believe that when they disappear, we will miss them. Just like five years ago, when local services disappeared, we realized what we had lost.
Raj Parekh:
Yes, I think that's a very interesting and important observation, Jackie. Because in the crypto space, we often talk about so-called "debanking," or "not participating in the banking system." But often, at least for me, this discussion revolves around large central banks. What you just mentioned reminds us that, often, these community banks are actually the "lifeline" of a city, a town, or a region. So it's not just about "going away from banks for the sake of going away from banks." There's actually a larger and more nuanced perspective involved. So thank you very much for sharing this.
Jackie Reses:
Yes, this isn't a "crypto extremist" stance, nor is it a slogan-like expression like "Go, community banks, keep going!" But I do remember the period after Signature Bank and Silvergate went down. We would have meals together and discuss banking integration. At the time, many people were emotionally devastated by their inability to access the banking system. Interestingly, just a year earlier, they were actually quite hostile towards the banking system. And when they truly needed banks, they did a complete 180-degree turn , striving to meet all the banks' requirements just to remain operational.
I believe it was during that period that many of the biggest and best players truly understood that there is a symbiotic relationship between the banking system and the crypto system .
This is why:
onboarding
offboarding
It will become so important.
The dynamics surrounding mint and burn operations are equally important. I truly believe that, if people are willing to observe closely, we can absolutely build a modern banking payment system for the crypto industry without cutting off the "legs" of community banking.
Chuck Okpolugo:
Could you elaborate on your point about the "symbiotic" relationship between digital assets and traditional systems? Do you think this is also related to tokenized deposits?
Jackie Reses:
Yes, absolutely. I believe that tokenized deposits are an important direction for the future evolution of digital currencies. As I mentioned before, I don't think there's a fundamental difference between digital and non-digital currencies, apart from the obvious physical form of cash. If you exclude cash, from the perspective of asset evolution, we actually started moving a large amount of financial assets onto the "digital track" as early as the mid-1970s.
Whether it's wire transfer systems or other digital systems, these systems may have limitations, and may appear outdated in appearance and usage . However, the reality is that over the past 50 years, we have successfully migrated a significant portion of the banking system to a digital orbit. The question now is: can we rebuild this orbit, leveraging the advantages of programmability, to truly drive the next leap forward in financial infrastructure?
This is precisely the direction I believe in. I firmly believe that programmability and interoperability will be central to the financial infrastructure of the future. But in the future, we won't be differentiating between "this is a digital asset" and "this is an old-school asset." We'll simply have a set of payment tracks and choose between them based on current use cases. We won't put all transactions on digital asset tracks if it's not necessary. In some cases, traditional digital methods may be faster, cheaper, and more suitable. In other use cases, stablecoin-based or on-chain tracks may be better and cheaper.
I think a good analogy is the debit card payment track . You can choose different payment tracks. Even at checkout, you choose different payment methods. They all essentially do the same thing: transfer money from you to the merchant. But depending on what you want to achieve, that money can reach the merchant through many different paths. And the reality is: we are now very adept at choosing between different tracks. But even so, even if you're using Cash App or Venmo, you don't really understand:
What exactly is behind that "instant payment" service?
What does "funds arrive in 1 to 3 days" mean?
Does this mean they're following completely different payment paths? For 99.99% of the world's population , they don't know. Even I myself am unsure if I'm among that 0.01%. Therefore, I believe that stablecoins, digital assets, and future tokenized deposits will all become another form of this path selection system .
I believe tokenized deposits will have a different use case. They will be more commonly used by banks within their own systems , while stablecoins are better suited for interoperability between different systems . Therefore, I think the future will definitely see the development of very cool products centered around tokenized deposits and the "tokenization of everything." This will become increasingly clear as we continue to think forward about other fundamental components (primitives) in the financial system.
Raj Parekh:
Yes, I think interoperability between the two is key to truly connecting the entire system. And one point you just mentioned is very important: people are already using a lot of different payment tracks in different scenarios. Considering there are 5,000 banks in the US, various legacy systems, and existing pathways, it's almost impossible for the entire system to eventually converge to a single track.
So, as time goes on, and people begin to adopt tokenized deposits and other more open tracks, we may see: domestic payment tracks on the blockchain, and new tracks within banks. This will certainly add more complexity to the entire system. But realistically, technological evolution is almost never a straight line. It's usually a coexistence of multiple solutions. In some use cases, banks might choose instant tokenized deposits; in others, they might choose FedNow or RTP. And behind the scenes, the banks that are truly responsible for "plumbing" will choose the most suitable path .
Jackie Reses:
I think we may be in the most chaotic phase of future evolution right now . In other words, we are experiencing a highly fragmented state. Various players are building their own ecosystems and hoping their systems will become the de facto standard platform. Therefore, you will see a large number of companies trying to "platformize" currency circulation.
But no one is really sure:
Which company
Which project
Which chain
Which structure
They will ultimately prevail.
Frankly, I think what we're building right now is near-infinite complexity . This demands an extremely high degree of interoperability, but it doesn't actually make things simpler. I also don't see any alternative path. Because I don't believe we can force a unified framework through "rules." I don't think that's how things work in the US.
So the current situation is: we allow companies of all kinds to participate, engaging in a platform competition for a monetary system similar to *The Hunger Games* . And I support this. Because it's unclear what's truly needed in different use cases. Therefore, I believe that in the next 5 to 10 years, we will see:
Extremely diverse choices
Then it gradually converges.
Ultimately, it comes down to a more organized group of participants making "transferring money" simpler. In the future, one company or group of companies may become more dominant at different levels. But today , there are no true "rulers" at almost any level of infrastructure. So the current state does resemble a free-for-all.
Chuck Okpolugo:
So what do you think will ultimately determine the outcome?
Jackie Reses:
I believe the key will be the trading volume across different transaction types. People will begin migrating to chains and systems capable of handling large-scale capital flows. These systems must be:
Easy to use
Programmable
Able to execute transactions quickly
Low cost
Furthermore, I don't believe there will ultimately be only one winner. There are too many different use cases for different people. So the future will likely be: you're my competitor today, and my partner tomorrow. Because customers' technology stacks are extremely complex, and they have to handle a vast number of different use cases, I don't think there will be a "one-size-fits-all" solution. But I do believe that in about five years, we will see several true leaders in different components of the ecosystem.
Chuck Okpolugo:
That's really interesting. While you were saying all that, I was doing a pattern matching exercise in my head because what you're describing is exactly the same as a lot of conversations I've been hearing in the ecosystem lately. It's really fascinating.
Jackie, as we near the end, I have a question for you: What should we expect from Lead Bank going forward? You've already done so much for the infrastructure, crypto, stablecoin, and fintech sectors. What will Lead bring next?
Jackie Reses:
We will continue to focus on our work and do it even better. I know this answer may not sound specific enough, but we will continue to build core banking primitives.
make sure:
Real-time fund transfer
Cross-border capital flows
Bank core product capabilities
These abilities will continue to be honed and enhanced.
We still have a lot of work to do, just to make the overall experience around these products even better. Finally, you'll see us continue to launch unprecedented new products in the digital asset space . This is something we excel at because we're able to combine a very strong product, engineering, and design team with our legal and compliance team.
Joint judgment:
What can be done?
What should be done?
And how to work with excellent partners to bring these things to fruition.
So you'll continue to see new announcements from Lead, many of which will be very cutting-edge and exciting . I won't reveal them in advance, but I'm really looking forward to it.
Chuck Okpolugo:
I was hoping you could reveal a little bit beforehand, but I understand, I understand. Before we wrap up, there are a few more questions. You've played a key role in numerous financial and technology startups. As a builder of multiple ventures, what advice would you give to entrepreneurs in the financial services sector?
Jackie Reses:
My advice to financial services entrepreneurs is: build for “precision” and “scale”.
First, let's talk about precision. When it comes to money transfers, you can't afford to make mistakes . You have to be trustworthy. "Move fast, break the rules" doesn't work in financial services. You can move quickly, but you can't break anything . You can push boundaries, but when it comes to people's money, "breaking things" is, in my opinion, completely inappropriate. That's why I always make "precision" my top priority for the team.
Then there's scale. You need to build:
redundancy
toughness
Scalability
To support future growth. Financial services is an incredibly complex industry. Truly integrating these products is extremely difficult. At the bottom, there are vast and complex value chains. But when you can build for scale, these products can become incredibly powerful, incredibly profitable, and truly drive the world forward in terms of “impact.” That’s what I love about financial services. It feels amazing when you can build large, impactful products.
Chuck Okpolugo:
Yes, it's precisely this complexity that makes it so fascinating. And ultimately, everything comes down to real-world implications. One last question: what should we focus on more in this field? We mentioned community banking earlier.
Jackie Reses:
I think people should focus more on use cases that actually solve problems . One thing that frustrates me in the crypto space is that there are too many use cases that don't actually solve any problems. Of course, there are many truly fantastic products in the ecosystem. I often get very excited when someone tells me what their company is doing. But there are also many companies where, after listening, you don't really understand: what exactly have they changed? What is the ultimate impact?
So I really hope that entrepreneurs can come back to this question: What kind of "pain point" are you solving? I think this is one of the things that the early crypto industry should focus on most.
Another piece of advice is: don't use excessive exaggeration, clichés, or industry jargon to explain your product to the point that no one truly understands what you're doing. I've found that in highly innovative industries like AI and crypto, many founders get caught up in jargon that only they understand. But I truly believe that if you can explain it to me in the simplest language, or if I can explain your product to my child, I'll have a better grasp of what you're doing and what you're trying to achieve.
Even I often feel frustrated: I think I know the industry well enough, but sometimes sitting in a meeting, I'm completely clueless: "What exactly does your product do?" So I often say, "Can we take a step back and explain it in simpler terms?" This industry certainly has many true experts. But not everyone can live 99.99% of their time in this field. Therefore, I believe experts have a responsibility to step back and ensure they can explain things clearly to non-experts.
Chuck Okpolugo:
Completely agree. Jackie, that was a really great conversation. Where should people go if they want to learn more about you or Lead Bank?
Jackie Reses:
You can visit our website: lead.bank. You can also do so on X (formerly Twitter) or other platforms.
Find me. Contact me anytime you need us.
Raj Parekh:
You can find me on X: @rparak and mana.xyz
Chuck Okpolugo:
If it were me, I could visit stablecoinblueprint.com. On X, it's @chuk_xyz, and on LinkedIn, it's Chuck Okpolugo. Jackie, thank you so much for joining our show.
Jackie Reses:
Thank you, I am very grateful.
Chuck Okpolugo:
That was fantastic. Thank you for listening to Money Code. There was so much to take away from today's conversation. I learned a lot, and I hope you did too. If you enjoyed this episode, please share it with your friends, or give us a five-star review on Apple, Spotify, or the platform where you listen to podcasts. See you next time!
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