How Automation + Liquidity Scaled OpenFX to $45B w/ Prabhakar Reddy

0:00 We ended 2025 with about 98% of our transactions settling in under 60 minutes. >> What is required to make that work? >> That can only happen with a pure focus on automation. >> In your world view, what can't people copy? >> If I had to summarize it down to three points, I would say number one is >> presented by Stablecon Media powered by BVNK. Views are personal, not investment advice. >> This is money code. It's a show where we decode stable coins and programmable money. I'm Chuck Okabalugo >> and I'm Raj Park and today we're joined by Pvaker Ready, co-founder and CEO of Open FX. Pvacer, welcome to the show and um let's let's let's jump in. Um Open FX has had a a pretty awesome story and scaled from 4 billion to 45 billion in annualized TPV in 2025.

0:52 what what was the biggest unlock um for you all and what does that reveal about what's actually broken in crossber FX? >> Fantastic. First of all, thank you for having me. Lovely to see you both over here. Uh 2025 was a fantastic year for us. First thing, we came out of stealth midway through the year. We were operating in stealth for the first 18 months of our operation. Um what clearly unlocked the growth for us in the first 18 months and mostly through 2025 were three different things. One is I would say focus on our core ICP. We did not try to build everything for everyone in this space. It is quite a wide space in the in crossber payment space. We decided to focus on a specific ICP which is C to CDC fintech companies and service them really well. Rather than trying to be everything for everyone, we try to be something for just those people, which is allow them to convert currency A to currency B and withdraw that in under 60 minutes any time of the day, any time of the week. That really has resonated with them. So that's one.

1:53 Uh second thing is a fundamental focus on automation rather than like this entire industry currently operates on chat, WhatsApp, Telegram, phone calls. Even some of the old school FX players, we said nope, that's not our ICP. If anyone wants to even pay 5% per trade because they're going to do a phone call and execute a $50 million trade with us, we're like, go to our customers, your better service there. We are pure programmatic APIdriven platform. What we're trying to build is a platform for other platforms to build on and which me means that everything from deposit taking to sort of uh collections to banking to FX conversion to payouts, everything needs to be automated. That's the only way you'll bring the time for crossber money moment down. We started off 2024 roughly at about 6 hours of settlement time. We ended 2025 with about 98% of our transactions settling in under 60 minutes. Uh all FX currencies, stable coins, whatever that may be, right? And that is a phenomenal start and that can only happen with a pure focus on automation. So that's been the second primary thing. And the third thing is a little bit cliche but I will still say it because it actually has been one of the core things and a core focus for the company which is the team.

3:07 uh you know without this team who actually comes from a varied background of understanding stable coins FX compliance licensing regulation how to operate a 24/7 365 business it it cannot come together in such a short time span because if you look at other companies uh tick transfer wise as an example they've been around for 16 years roughly they do about 25 we do about 25% of their volume and we're only 2 year old company they're 6,500 employees roughly like 75 So there's a big delta in terms of how we operate as a team and how we are an N of one team that allows us to do what we do.

3:43 >> Oh, that's awesome. And would love to kind of break those things down uh as we get on here. Uh the specific focus on the customers and the types of uh products that you serve. Then the automation, I think that's a key piece to unpack. Uh and then the team as well. Um, as we break all that down, uh, I really want to get into today, you know, what are the kind of the non-obvious constraints in FX that you have understood and have been proven to be true as you've scaled and then we'll walk through a transaction end to end through Open FX just to understand exactly how everything's pieced together and the automation that you mentioned and then discuss like what makes you differentiated um, and then as you scale what breaks uh, and you know what all this means really for the future of FX.

4:27 So um before all that, can you just just describe Open FX uh to folks who don't know? Who are the buyers? You mentioned the C to series D Finex. Um what job are they hiring you for and what part of their stack are you replacing? >> Fantastic question. So Open FX started with one mission vision that's been the core focus today for a long time and will continue to be which is to make sure that money across borders moves 24/7 365 in singledigit minutes eventually. Almost like how an SMS or text moves rather than how a postal era post moves today which is how money moves around the world like you put a post in the post box somebody comes collects it at the evenings goes to central post office goes to post box ABC and eventually reaches your home 5 days later which is exactly how crossber transactions move instead we're trying to build the iOS iMessage ecosystem where money can move whether it's a $100,000 transaction or a 10 million peso transaction near and strictly across border so that's what we do uh who's our core focus as a client base other fintech companies and that's who we started with today right why because like I said can we build everything for everyone no we go after the legacy fintech companies we go after large hotel chains you know they have all these ERP integration requirements large sales cycles didn't want do not want to go after that but the customer base faces a pain point most acutely are other fintech companies and having been a former VC I've heard so many pitches all the fintech companies coming to me and I need to raise my series A, B, C, D, all for working capital. It's not like the fintech companies have huge opex needs. It's all pure capex needs. And for them, they want to make sure that they're preunding their assets in country A, country B, bank A, bank B, C.

6:08 So that they can actually sort of mimic payments in real time for various different companies. And this happens across the globe for whether it's remittance company, payment gateway or travel platform. Every single one is repeating the same infrastructure again and again. We realized rather than every single platform trying to do this, can we seamlessly integrate all of this and and sort of solve that problem for them. Could we have done this five, seven years ago? Very unlikely. Few things have happened in the last few years.

6:35 Number one, uh, stable coins have found PMF. So what that allows us to do is without showing anything to the users, right? without letting the users know about the underlying tech, we're able to move money from country A, convert it into whatever currency you want, bypass swift layer if you need to and move it to country B in single minutes and give it to the customer on the local RTP rails. Again, 5 to 7 years ago, most of the local sort of last mile emerging countries did not have RTP rails. Now, we are on like the second third generation of RTP rails in most of these countries where it's Mexico, Brazil, Europe, India, Philippines. And so we're able to sort of like move money across borders seamlessly programmatically and give that experience to our clients, right? And what's happening is they're able to take our platform, compete with their legacy fintech competitors and sort of eat their lunch. They're able to slash their costs. They're able to give them real-time experience for their clients without having to have really large balance sheets like the predecessors and compete with them. So that's basically how we've been able to crack this market segment in a very short span of time. This we started with. Now interestingly in the last 6 to9 months ever since we've come out of stealth all the legacy fintech companies have started reaching out to us and they're like hey what's going on in space these new kids on the block some new remittance player which has started I don't know from UK or from Mexico is eating our lunch left right and center and when we dug up we heard that openx is powering them help us understand what's going on what is this stable coin what is this Solana what is this blockchain we're like hold on you don't need to understand all of these things it's the same infrastructure that you're used to using currency cloud uh airwex whatever you know city bank infrastructure it's very same it's the same thing plug your plug openf access API into it give us your asset A convert it to asset B and click withdraw and you get it you don't need to understand wallets you don't have to understand stable coins you don't have to understand anything about blockchain and that literally blows their mind because it's like a two integration for them >> that's right and I think the key thing you you mentioned there that was interesting for folks is the capital element the fact that for startups In FinTech, working capital is a key constraint that stops them from scaling and you have to go and raise capital at a very expensive cost, right? The cost of capital is very very high, especially for a startup in order to them for them to grow. And so it's a great use of the capital, but if there's a way for them to scale quickly globally uh without that balanced need, then uh you're you're giving them fuel essentially uh and that improves the ROI of scaling of fintech, particularly across border fintech massively. Uh you mentioned then the new customer segment the more traditional fintex. Um if you can what's the breakdown of the kind of the $45 billion across you know the different segments that you have understanding that obviously you started with the original fintech so obviously they've had more time to to scale.

9:24 >> Good question. So I would say it's almost uh 7030 at this point which 70% is still the fintech segment. Interestingly, the companies that were seed series A when we started have now grown to series B, CD already using open effects as a platform. So they've seen hyperrowth. They've become billiond dollar companies using our infrastructure. So now would you still call them AB companies? Perhaps not. And so they've become their own legacy fintech companies and of sorts for certain regions. But the newer players and we categorize them into two segments. Companies that started before 2020 and the ones that start after 2020, right? Right. The ones before that started before 2020 are almost like the legacy fintech players. Some are publicly listed companies, some are old school players. They've started adopting and leaning into stable coin narrative a lot more. They're like we understand that we have to get into this. If not, it's going to get troublesome. And we're like great, you don't we don't want you convert anything into stable coins is great. If you donate, we'll just give fiat A to fiat B. Again, seamless programmatic experience. And that blows their mind. And that's how we've seen adoption in that segment.

10:27 >> And that's that's awesome. And how does it split also? across corridors. I think we haven't talked about the many countries that you support and the different currencies that you support both fiat and crypto. It will be helpful to understand that as well. >> So, uh it's been about 20 months since we've gone live. We're live in about 12 currencies so far. 10 odd are in GA and two are in beta stage. We we've been going live with one currency a quarter previously and now we've accelerated that to one currency every six months eventually like now we're you know with the onset of AI our ability to sort of integrate with local banks providers liquidity providers licing all the infrastructure is in place we need to bring down what used to take 2 months down to like about 4 days now in terms of the entire integration timeline so we're able to move much faster um so we should be launching almost one currency every four to six weeks now out of those 12 currencies I would say it takes us about 6 months to go from zero to maybe like $250 million to $300 million of TPV per currency and that's when we like okay this currency is in a very stable place and it's postG uh and so we basically have launched bulk of our currencies in the last six to five to 6 months. So all the newer currencies are still in that zero I would say like 502 to $50 million range but the ones uh that actually were launched in the early part of 2025 AED for example MXN um Euro GBP dollars they are through the roof like we have entered those markets and sort of dominated those regions uh and interestingly even the new currencies that we're launching these days I'll give you an example PHP we just announced that we're going like a PHP in the market and all the existing players sort of like change their entire pricing strategy knowing that open FX is entering the market slash their rates by like 50 60%. Just to stay competitive because that's been our entry model.

12:23 What we do is we enter a domain we slash the pricing and bring it down to like such bare minimum. It's almost the Amazon business strategy uh where we are saying you know what FX is a market where people charge 70 80 basis points for everything. Instead we make markets ourselves. We are market makers by DNA. You know, having built Falcon X, having come from a lot of these institution platforms, uh we're able to bring our cost structure down to like single digit pips, why don't we charge that to clients and give that kind of a cost structure to them. So, what that allows us to do is competitively enter a market while bringing down the settlement time.

12:58 And so, that's been our playbook. >> Yeah, there's this is I mean, this is fascinating. I mean I guess one quick question is that you mentioned the combination of both fiat and stable coins like how do you see that interplaying within the core infrastructure today and like you also mentioned that hey you don't really need to know what what stable coins or blockchains are so I guess like are you providing fiat services but then is it powered by stable coins or are you actually seeing demand from your your customer base to say we actually do want stable coins also just curious how it all interplays together.

13:30 >> Yeah. Yeah. So if you look at our website, we don't talk about stable coins much or have the word stable coins anywhere because again clients don't care about the tech. They care about the outcome and we pitch the outcomes and the benefits. Now we look at stable coins as yet another currency. If you want euro, pound, dollar, MX, VR, whatever it is, we'll give it to you. You also want USDC, USDT, happy to give that to you. That's how we see it. Um, do clients want stable coins? Yes. Uh there are a couple of clients who want it specifically because we don't do the end toend corridor ourselves for example we are not live in India as a region uh and it's coming soon we're working on it we need to get the local infrastructure licenses all of that set up so we only do half a leg for remittance companies who go I don't know from dollars to INR or pounds to INR and so we basically give go from pounds to dollars to stable coins give them the stable coin they take that go to whatever they need to in the last mile region collect the local currency there but we know that if you can give the last mile currency sandwich the entire thing. We remove the stable coin piece completely from this.

14:30 >> Yeah. No, that makes sense. And then I guess like what type you mentioned like the these these are fintech use cases like maybe describe just like the types of use cases are these you know you mentioned remittances as one of them but like what what are the types of use cases are you seeing? Is it is it predominantly B2B? Are these consumer use cases? Like what are these fintech actually doing with the the open FX platform?

14:50 >> Great question. So predominantly it's remittance companies, payment gateways, payment processors, payroll companies, neo banks, brokerages. These are the six segments. Now there are some enterprises too and niche enterprises like for example I told UAE is a very large corridor for us. Uh in UAE very interesting use cases and I say this because I grew up in Dubai. It's home and I understand everything that's going in this country a lot better. Um, we've got one client segment which basically services the oil and gas sector and the shipping industry. Fascinating industry because I've got a port right next to my house over here in Dubai and uh I see how much they pay every hour for having a ship sort of like dock at this port.

15:35 very interesting use case where before open effects they would basically come pay lots and lots of fees uh every single hour to basically have the ship at the port to be inspected after the inspection is done for I don't know let's just say bananas or whatever it is right they wait about you know 12 hours for the inspection to get done once the inspection is done they wire the money they wire the a to let's just say the Philippines if the ship came from there or to Guatemala if it came from Ladam and it takes 3 to 5 days for the money to reach the vendor 3 to Friday that ship is waiting at the port paying hourly $5,000 an hour shipping docking fees right and those bananas are rotting in the meanwhile now come open effects we basically are saying you know what just give us the ad and whatever currency you go on the other side we pay out in one hour it's that last minute current now that's a fascinating use case they're able to empty the ship clear the dock the next ship is the world is getting more productive as a result of money moving faster cheaper better right now yes we use stable coins in between but neither the vendor knows now the receiver knows it just all happened magically Because we've gone from AED dollars, dollars to stable coin. The stable coin is moved from UAE to LATAM off back into dollars, dollars into that last currency, given out to whoever it needs to get out. Fascinating use case. No one needs to understand stable coins. That's what's happening.

16:49 >> Yeah. I mean, it's it's a it's fascinating because I think sometimes people o overrotate towards stable coins and what you're presenting is like, hey, this is just a innovation and infrastructure on money movement. we can make these things a lot simpler and faster. And as a byproduct of that, the supply chain is actually getting faster as well, which is actually, you know, if you compound that over to like the the global supply chain and global trade, uh it starts to get really fascinating. And we've only scratched the surface of it too, which is uh which is really kind of cool. Uh maybe like I'm curious like you mentioned that you know it's it takes about you know six months to really see a currency go up and you know what I think even it'd be interesting to break that down because in the beginning you're you're talking about you know you got to you know do the integrations with like the local rails you know and then you got to get the liquidity going as well but maybe if you can break down like you have another currency that's going to go live in you know four to six weeks now but maybe what are the different pieces and you know where do you guys do where like and how do you guys uh you try to pick the demand for the the currency. Is it all customer-driven? Are you trying to stay a step ahead because you know what's about to come? Like here's how you guys are making that decision.

18:01 >> Great. Very good question. Let's start with the second part of the question. How do we pay currencies? I don't wake up every Monday morning and go let's go here. That's not how it works. We actually survey all our customers every month asking them because there's a lot of fint companies that are going very rapidly. We asked them what currency can we unlock for you that if we gave it to you at an extremely competitive rate and very fast settlement times that your business will not you're already doing not like some hypothetical currency that eventually you wish will come for you and so we basically stack rank and we have an active list of all our customers their currencies and volume and we cut that by a little bit and we're like okay now we know what exactly is the road map of all the currencies we need to launch and then we have an index of how complex the regulatory regime is how much you know the local banks infrastructure We surveyed most of these regions. Do they have APIs? Do they have local equity partners? You know, how easy or complex is it for money to move out of the ecosystem? Are stable coins allowed or are they banned in that region? So, we take all of that into account and then basically pick the regions that we need to go into. And once we picked a region, a lot of things that need to happen.

19:00 One, we need to basically usually have a local presence, right? Because we want to have last we don't we don't just swift wires into that country. We do that, then we yet another provider that has existed for 20 years. That's not what we do. So we need to have a local banking infrastructure, local liquidity providers, local OTC desk integration, local market integrations. Why? Because that's slicing and dicing and smarter routing is one part of how we get the liquidity. But then we also make our own markets. So usually what happens is our trading desks and we're like maybe just digressing for 30 seconds. We're like citadel securities that sits underneath Robin Hood. So we are both at the end of the day because we're building our own marketing infrastructure. So for that currency our trading team sits and starts making markets and starts going deeper and deeper in terms of reducing cost structure right and then um we combine all of this and try to make cit programmatic the biggest challenges in entire piece is banking ecosystem most of these banks in these countries don't have APIs they say they have APIs maybe they have it in some regional language which is not translated into English how things are broken we fix you know uh errors for them and we basically create infrastructure and a lot of times when they don't have API We actually create RPA systems, robotic process automation systems where we have a ops guy who go and like click click click show what needs to be done and the RPA system repeats. So we because we need to get the deposit instructions scraped and put into our system we to ensure that every time money comes in it's credited accurately. Then when there's an a fixed transaction the money goes out to however it needs to go out. So that needs to be and when the last mile money needs to go that also needs to be paid out. All of this programmatically by APIs when the bank doesn't have APIs means there's a lot of automation that needs to go. all of these boxes are checked then and that usually happens when you know we've gone from zero to like two $300 million in volume and done all of these things then it goes into GA and that usually has historically taken us 6 months but the time is shrinking faster and faster because now we're out there in terms of you know our brand and everything else so people know and we're able to see that that pick up and curve instead of 6 months and 5 months and five will eventually become four to three >> yeah that's fascinating I think um we talk about automation and AI I a lot.

21:02 But what that means in practice is taking a lot of these steps that are human required with clicks and browser automation and things like that and turning those into processes. And when there are no actual APIs, it's it can be quite quite brittle, I'm sure, as you you've seen. But over time, you catch edge cases, you improve, and like like you mentioned, you know, maybe it takes, you know, 200 million of a volume to have seen sufficient edge cases where you now feel comfortable making it automated what an underlying system that itself really isn't.

21:35 >> That's right. And if you go back to what we were discussing originally, the reason the world operates this way in five to seven day settlement times is because one part of it is tech. Yes, a lot of these last mile countries don't have the tech and the integrations, but a lot of it is also like miscellaneers. A lot of the banks and all banks are not in the business of moving money. They're in the business of keeping money, right?

21:57 So they want to keep money and sit on the float for as long as they can because that's how they make money, right? Right. And the entire intermediary bank infrastructure that has operated in the world for the last 50 70 years where you know you send dollars from US to say India INR in India. It goes through five to six intermediary banks in between. It goes from you know Wells Fargo to Bank of America to City Bank to JP and finally goes to access bank in India and every single bank has a different time zone different operating hours. Everyone wakes up in the morning a lot of manual processes and then they want to sit on the float for the entire day if they can because they're making them interest all these misaligned incentives you know basically make money move slower along with the technological problems. Now if you automate this entire thing, remove all the intermediaries in between, make it fully programmatic, suddenly the world starts getting more efficient. And that's the unique thing that we're doing. It's not rocket science, right?

22:45 But just removing all these friction points in between and making it making sure that the next generation of tech companies that are building on top have access to these kind of threats. >> That's great. That was uh one of the questions that we had for you just to break down what is wrong with the current uh infrastructure and landscape today. And and I think most people know or understand the correspondent banking problem and like you mentioned the incentives are key to it at the beginning where you know depending on how many steps there are each one is taking the cut each one is holding it just overnight just to that additional spread and um you know that's a key thing and I think there's still a bit of misconception with what part Swift plays in that it's actually a messaging layer.

23:25 is not actually the one doing the meth doing the movement but outside of kind of correspondent banking there's a lot of fintexs I think you mentioned them some of them are your customers who have tried to solve this with balance sheet and netting um but they there are still problems for that perspective maybe you could just describe for the fintex who are trying to solve the correspondent banking system what problems do they still have in in crossber payments >> yeah very good question and you know in fact before starting up bits I just went into a deep research mode I actually said, "Let me understand this space very deeply. I understand I know Bill Falcon X before so understand crypto space quite deeply. But I was like this world of FX is fascinating. Let me just unpack it layer by layer." So spent time from the founders of currency cloud to the FX desks at Barclays spent deep amount of time sitting in their offices if in fact a couple of times to understand how they move money where is it getting stuck what are the incentives and it was a fascinating experience as you peel every layer of the onion to understand what's going on. So let's start with the market structure. Every day about $7 trillion moves around the world in FX of which two trillion is bought, five trillions is options, derivative swaps, right? Um of those two trillion good chunk of it moves through nine different banks around the world. JP Morgan, city, HSBC, it's very concentrated, right? And now if you look at the next layer fintexs that all started in the last say 15 years companies that started between 2010 to 2020 they're all multi-billion dollar fintech companies that basically said I'm going to take all these nine banks create API rappers and give access to the next level of tech companies. So they're all built as rappers around these large banks effectively. They're not trying to reinvent the wheel.

25:04 They're saying I'll just take a bucklay API. I'll give a programmatic experience to them and I'll charge you know a nice margin on top of that and give them access to collection banking FX payouts. Great. Now the fundamental problem is Barclays is not in the business of rapid money movement. Right? Barclays doesn't work after 4 p.m. SSD. Uh not picking on Barclay specifically, but every different bank in the world, right? They don't work on weekends. They don't work on national holidays. And then you compound that with five different banks in between and the problem gets really compounded, right? And every single one wants to sit on the money for as long as they can. And then you add different compliance rules, different manual processes and suddenly the problem really compounds. And that's literally the the way the industry is working today. Um now every single fintech that has ever operated in the space historically is connected to some infrastructure that was built using this infrastructure. So we said if I try to build another application on top to solve this using a wrapper on barklays DBS HSBC nothing is going to change. In fact I may you know sort of simplify the product experience. I may remove some of the onboarding fees you know some slash down the cost a little bit but this is trying to basically pick from a very small pool and trying to create incrementally better experience than trying to build for a platform and ecosystem that is going to be in 10 years time have a slightly different view on where the world is going to be in 10 20 years time. We decided you know what this is not the way to do this. You have to fundamentally reinvent the entire way this is going to work and what it's going to look like in 10 years time. We have to start at the crux of the problem. The crux of the problem is not in collections. The crux of the problem is not in banking. It's in liquidity and it's in FX. And we have to solve that at that grassroot level in every region. Right? And we have to solve at the last mile liquidity. Now in the last 5 years what has happened is crypto exchanges have popped up. Right?

26:48 And so as a result bits coins.ph PH coin mina etc etc kraken all of these have a little bit of liquidity where you can convert stable coins to some level of effects and a lot of these new age remittance companies new age crossber companies all the tech crunch news articles that you see got built and got started using crypto exchanges so it was a great start for them now the problem is crypto exchanges are built for shitcoins and bitcoin and everything else and stable coins to fx have some liquidity and you can get started on it you can do a very good $100,000 size order maybe or $100,000 Euro order but you try to do a€ 10 million euro order and you have 5% slippage and suddenly it's better off to send money using Western Union than to use you know one of these crypto exchanges. Uh so there are very few cases where it makes sense to use a crypto exchange to pay 5% to do it rather than you know and wait uh rather than to wait 5 days to use money.

27:39 So we decided you know what crypto exchanges also won't work because again we used to make markets on crypto exchanges my previous avatar. So I know why I would or why I wouldn't make markets there. So we decided let's basically go back to the drawing board and let's start figuring out if this is getting rebuilt or get rebuilt we need to make markets in every region we need to plug with all plug into all the local vendors local multis local market makers and have a predictive ledger as well because and this is one of the learnings that we took from transise and transise is one company that has done something innovative in the last 15 years if anything where they give a near instant money movement experience where they collect money from pocket A but pay out from pocket B but what they do behind the scenes is refund their assets in all the regions two three days in advance and they've done a fantastic job of it right now can every company have that size of a balance sheet and you know sort of preund everywhere no so what we're saying is can we basically take some of the those learnings give access to all of the people so we actually have our own predictive ledger right of the $50 billion that we move we know historically now it's Friday 7:00 p.m.

28:37 in Dubai for me I know at 8:00 p.m. I know at 9:00 p.m. I know at 10 p.m. across all currencies what kind of flow I'm that's 80th percentile accuracy that I'm going to expect. I see 80th percentile because we have new customers joining every week doing new things and suddenly those models break which is a good thing and a bad thing. So now what that allows us to do is make markets and hold positions ourselves. So we do that as well right in addition to slicing and dicing and smart routing and all the other infrastructure that's in place. So combining all of these things, we're able to sort of upend the historical way the money has been moved in the past few years and sort of like get to a place where we're able to programmatically move money using again stable coins, FX currencies, programmatic infrastructure, our APIs to give that wonderful experience to clients.

29:19 >> That's awesome. And I'd love to get into that. I think throughout this conversation, you've uh picked on the various different parts of the stack. Let's walk through a $10 million transaction. I think it's a a well-known thing that yes, crypto exchanges don't necessarily have the liquidity for the very large B2B payments that need to occur instantly. Uh and they're very very good for small resell payments and that's how as you said many uh startups have gone off the ground. Let's take the example you shared earlier $10 million worth of AED to the Philippines. Where does it fit into the system? How what is stable coin? When is it on ramped? When is it touched by open effects and so on?

29:58 >> Good question. So $10 million is a decent size to talk about because you try to do execute that on exchanges and suddenly things break, right? You're not able to do not even just one side. Both sides you do and everything breaks. Uh so without open effects what typically happens let's talk about that. Um let's just say it's a limited company. They will collect the AED. They'll usually use a regional bank. They will convert those a that a to PHP will cost them 50 60 basis points and they will initiate the wire to go to Philippines. Usually takes 2 3 days. It's Friday so the banks already closed right now going Saturday Sunday nothing's going to happen so Monday they'll you know initiate the wire on Wednesday they'll reach so what usually the remittance company has already done is they've already preunded their bank account in Philippines with PHP and kept it saying hey I already know that $30 million of PHP is required every day I'll keep $32 million maybe worth of PHP over there if I've gone above that back to swift rails I can't service my customers I'm going to make them unhappy that's how historically it's worked but in the last few years with the onset of crypto exchanges is some of the newer players had said, "You know what? Let me basically execute part of these trades on a coin mina and UAE.

31:05 Convert that to stable coins. Move the stable coins to Philippines. Convert that on coins.ph back into PHP. Do it. Now can you can do a million dollar $3 million worth of trades on either side. Fantastic. But you try to do that programmatically every single day for double digit triple digit million dollars and suddenly the exchanges don't have the liquidity because they're not again in the business of creating FX depth. They're in the business of allowing you to buy Bitcoin, Ethereum, all the other altcoins that you need to.

31:31 Now, with Open FX, what we do is we make markets in both these regions ourselves, deep FX markets. So, we able to sort of programmatically convert take receive that AED locally into our account. It's usually near instant because local ADS are fast. So, we get the money into AAD. We convert that A into USD. We make the markets for it. So, it usually costs, you know, single very few pips to do that. Once we've gone from AD to USD, we convert that into a multitude of stable coins. Which stable coin really I I can't we don't pick whatever is the cheapest, fastest, most liquid stable coin at that point with the best incentives. Our algorithms will pick that take that stable coin, you know, push that to our Philippines, for example. And in Philippines, offer that back to dollars, right? And dollars to PHP again. We make the markets. So, we've gone from a in UAE to PHP in Philippines usually in under 10 minutes.

32:22 Why 10 minutes? depending on what chain what stable coin we used that number of conchain confirmations is really it takes 10 minutes otherwise it can happen in like you know a second so once we've gone there PHP local rails are 24/7 again we pay it out to our customer into their local bank account in Philippines and they're able to pay whichever customers they need to and that's hack can happen whether it's a Friday Saturday Sunday no banking cut of ours nothing >> so that's that's fantastic a great way to really lay lay that all out what is required to make that work. So you mentioned it, some of it is you need real-time rails on either side. Then you need to have APIs or you mentioned robotic process automation on either side. Then you need to make markets on either side with deep liquidity and obviously from Falcon X you have experience there but you need capital uh to to make those markets from both sides. So there's capital involved as well. Uh and then um obviously wallet infrastructure in order to manage the the the stable coins. Maybe I've missed some things there. Um could you just talk about what is needed for that operation?

33:26 >> You you unpacked a lot of them but there are few more things. One first of all in every region you need to have local presence to have a local account local bank infrastructure local licenses. You can't get away with that. You're touching fiat assets. These are not onchain shitcoins that you can say it's you know defy I don't know it it's fiat. So you need to have local licenses and regulations. It usually takes time to get that set like requires capital scap as well. So you start from there, you need all the local KYC compliance infrastructure and comply with those rules. So that's one. Number two, you need to have a very deep understanding of FX markets and ability to make markets here because one thing you realize after being in the space, there's no such thing as an interbank rate or a midm market rate. It's literally whatever these days like you know you can basically you'll have to make your own markets. You have to figure out what the pricing oracle is.

34:14 You have to build out that infrastructure. So having a tech team and an FX team and a markets team that actually understands all of this and can do realtime 24/7 work is a second part of it. Third, a very deep understanding of crypto and stable coins because that market infrastructure is very different from the FX market infrastructure. So understanding that then third thing um sorry the fourth thing effectively is the ability to do all of this programmatically. So an extremely you know jacked up engineering team which can basically get all of this done whether they're APIs they're not APIs doesn't matter making sure that that entire leg is automated and number five ultimately is the business model itself right your ability to basically do all of this using a balance sheet a very large balance sheet that can almost pay for itself because balance sheet is not free right you running a very low margin business but you have to run profitably so Doing it at scale and doing it in a way that you don't basically get hit one hit and wiped out is another thing. And the sixth most important thing is while doing all of this and moving billions and billions of dollars, doing it in a secure manner because one step of the way, one fat fingering mistake, one you know weak link and everything is gone because ultimately you're moving money.

35:28 You're not shipping you know burgers and pizza. So people like you have to be very secure and safe about this. So all of these six things doing it while running a 24/7 365 business is hard and you know I didn't start openex with the intent of actually starting this company. I think I told you this when I met here. I was looking at companies who any founders who were trying to build this space and I said you know what I'll lead your series a myself if you're doing a fantastic job realized nobody wanted to build this business it's a very complex business to build and anyone who would go into this business would like I'm doing so many things I want to charge 80 basis points to 100 basis points and cuz I deserve it I'm a premium product then suddenly you're back to the world that we're currently living I said no okay it requires somebody who actually deeply understands all of these things and can build it in a way that you know the world should be I want to basically to where where money actually doesn't cost so much to move.

36:16 So, sort of bending reality to my own will and solving it for myself if anything. >> Yeah. I mean, it's a and it's a great explanation. I think it's a good segue into, you know, I think some of the next um topic around differentiation and just I think often times in the stable coin space, we see a lot of orchestration companies or they call themselves, you know, on and off aggregators. You see a lot of these terms pop up, right? But what you're describing is you're you're talking about depth in terms of infrastructure building, in terms of liquidity, uh you know, in terms of actually building out that infrastructure and doing it in a certain way. Um may maybe like in your world view like describe just like you know what you think is, you know, maybe what can't people copy, right? I mean a lot of the stuff you talk about it sounds easy when you say it, but when you actually do it, it's actually a very different thing. And then also I think the most important part that you touched on is the business model itself like building a a low margin uh business. It takes takes a balance sheet and it takes a lot more and there's actually a lot more involved. May maybe if you can describe just you know taking a step back of like you know what the market looks like today what's you know what you guys are providing that's differentiated u and you you touched on some of these parts already and then maybe like we can go into like the the liquidity flywheel and the the business model here itself like you guys are able to provide and go and take this Amazon approach and go into these markets and slash prices but also do it effectively as well. Maybe if you can just like unpack all that together for us.

37:42 >> There's a lot to unpack here and we could go on for another 45 minutes if we do that. So let's touch upon some of these things. Um look there are lots and lots of players in this entire equation and a lot especially in this day and age with how good lot code cursed everything has gotten you can wipe code pretty much anything. Uh what is very hard to hype code is building regional liquidity in each of the places and sort of building that stack in a way that you can actually make money and giving access to customers so that they can actually sort of utilize all of this because software layer will definitely get bipoded out in the next 10 years and we actually thought about it very deeply all the orchestration there just collecting money from point A and paying it out to point B in 100 different orders it's not hard that's not rocket science appreciate the companies that are doing it and that's fantastic but all that can be wiped out by a 14-year-old in in 5 years time but building all of these things with the licensing stack with a programmatic ability to do all of it is hard. So if you talk about differentiation rushed upon a lot of these things but if I had to summarize it down to three points I would say number one is having that full end toend automation is a big differentiating factor. In fact, if you talk to our customers, if one of the reasons they use us is because they don't have to talk to us, which is it's weird, but it's also a great thing because we're like, yo, if you want to talk to us and have chat and, you know, be nice, we don't have a trade operations team, a trading desk who sits and chats with you on Telegram, WhatsApp. That's not how we operate, right? That doesn't scale because if you want to get to a trillion dollars a day of volume, we cannot do that manually by throwing people. I'm not trying to build a Bank of America here with 10,000 employees. we have 300 people at most at peak and all of that is going to be primary engineering right so that focus on automation is a key differentiator for us second thing I would say is our ability to operate 24/7 is also a key differentiator ability to provide pricing for FX on weekends when no one does it like in fact we went to some of the largest banks in the world and we were saying hey we want to basically get access to your banking infrastructure so that we can run it when they learn what we do they're like wait you make markets on weekends we don't have access and these are like 500y old banks uh that actually don't have access to this infrastructure.

39:51 They're like can we use you guys for weekend effects and we'll give you access to a bank infrastructure. So that's where the conversations are and not even like the fintech companies for fintech companies is they want to operate 24/7 even the legacy banks know this is feasible. Third thing I would say that differentiates all of this is underlying business model and we talked about this briefly right fundamentally rather than trying to build a business that you know let's just say the next competitor in the space of ours would charge 50 basis points if I charge 45 Chuck will go start a company tomorrow and charge 40 and Raj will charge 35 and eventually becomes a doggy dog business it's like if it's going to become a dog dog business let me induce a race to the bottom and operate it at a margin that the next player if they want to compete with Open FX has to bleed$100 to $200 million of cash just to basically get into this business. So very low incremental margins left on the table which is Amazon strategy. If I tell either of you guys to go start an Amazon tomorrow like you know this it's not worth it. Uh so same thing. So we are trying to build that underlying AWS infrastructure that every other fintech can build on top of with such low margins but at scale we'll actually be a very profitable company because I don't need to charge so much because in every stack of the way I'll make a few basis points but by charging so low and making the you know uh money moves much faster I believe that the $2 trillion a day of volume will eventually get to $50 trillion a day of volume. It's just like an analogy is 50 years ago you know if you said the number of posts that are going through a postal network are 100,000 a day hypothetically right if you introduce SMSS it won't be 110,000 a day it's actually trillion a day effectively that level of auto you know when we basically take money and make it programmatic and allow it to move 24/7 365 at extremely low costs that is going to be the effect of crossbar money movement and we're also entering this world of AI where money no longer can move at human time scales and that is going to be a big differentiating factor. Money has to move programmatically. AI agents are not going to wait 3 days from sending from agent one to agent and be like let me wait for the money to receive. they're going to expect like to send a trillion transactions of like you know a few cents each every single day and ensure that the money gets to the other side very fast and that has to happen through API that has to happen programmatically and that's infrastructure willing and that's how we differentiate ourselves >> right this that's it's fascinating you have the 24/7 deep liquidity on the one hand then you mentioned the automation and making it programmatic so that no one needs to talk to the the trading desk um so that enables a lot of scale In this new model, what's the next thing to break? Where does this new bottleneck start to form in this new form of doing this uh crossber effects?

42:38 >> Yeah, you know, candidly, um where at scale things are already breaking and will continue to break for us is in two aspects. One is in banking. As much as we're trying to disrupt the existing infrastructure, we still have to rely on banks, right, to sort of move money across the world. as soon as anyone realizes you're using stable coins. We're not a crypto come here, a web three company by any means, but just the mere fact that you're using stable coins, you know, sort of resolves, it's a red flags banks and they're like, yo, we don't want to even look at you guys, right? And if you're having that trouble, right, imagine all the young companies are coming out of YC and saying we're cryptonative, stable coin player, etc., etc. It's just very painful for them, right? to banking in every shape and form whether it's access whether it's access to APIs whether it's access to banks that actually work 24/7 whether it's infrastructure that doesn't break you know sometimes money just doesn't reflect on banks and why because some human is sitting in the back of the bank trying to credit every single thing so as much as you automate things on your end if there's a dependency on that bank to have a human being who's going to see that money and credited suddenly that is the last mile choking point there so that is going to be a fundamental choking point in this industry and has been for does at this point and second thing that we're going to face at scaleless balance sheet right if we really want to solve this problem uh and again $2 trillion a day problem means probably need what $500 billion of maybe a trillion dollars of balance sheet I'm good but I'm not that good I can't raise a trillion dollars of capital and that's most inefficient way of doing this too so you know we have to figure out a very creative way to solve this problem we have some ideas and we're working towards it >> yeah and I think you know as we're as we're getting you know this has been a fascinating convers ation as we're coming close to the end here. I mean, maybe we could just break out into the future a little bit more. There's um you know, you've talked about how you're fundamentally rethinking like the the FX space, you know, leveraging stable coins, leveraging automation, you know, now now things are just getting faster and faster and faster, but like what does FX look like, you know, I think in a long enough time horizon. And then also maybe maybe break down like, you know, we we're starting to see this like early emergence of non USD stable coins also. like curious how you see like benefits for for any of those as well.

44:53 >> Two two different questions. So let's unpack them. Uh long enough time frame could be anything. I actually have my own worldview on where the world's going in about 30 40 years. Let's not talk about that. Let's talk about 10 year time frame more bounded in 10 years. I have a high degree of confidence that the largest users of FX is not going to be anybody in this you know sort of call over here. It's not going to be human beings. it's going to be AI agents. Um, everything that has been built in the last 30, 40, 50 years in the world of fintech has been built for human time scales, end of day batch processing.

45:28 That's not the way the world is FX world is going to be in the next 10 years. It's going to be AI agents who are going to do like I said a trillion transactions a day or you know million transactions a day of two $2 each as opposed to two transactions of a million dollars each which is exactly how we work today. That's not the case that so we building that infrastructure for that world because we're already starting to see some of these fascinating use cases.

45:51 Lose my mind when I see these young startups trying to build for new applications. We're like like I really don't know what's going to take off. It's like 2005 and you're building AWS and you see all these new startups. I zero clue what's going to happen in the world. But it's fascinating to see all these use cases get built on Open FX. Um now what was the second part of your question? Sorry. uh uh stable coins. So uh let's see is there an inherent advantage of regional stable coins around the world? Yes and no. So now if you look at most of these emerging nations they already have local RTP rails that allows them to move money 24/7 365 right India Mexico Brazil all of the AED PHP what does a stable coin in that currency allow them to do really nothing much like money like you know you've been to India I'm guessing a bunch of times like if you use a UPI it does there's no limits it it works better than stable coins why do I need a stable coin for INR there. There's really no benefit. If anything, all of the last mile sort of like regional countries, the demand is for dollar based stable coins because all of these countries have 10, 15, 20% inflation and they don't want to basically sit on their local currencies.

47:11 They want to sit on a dollar denominated asset. It's very difficult for them to get access to dollar based accounts. by having access to a dollar based stable coin allows them to sort of like escape the inflation costs and also get access to like higher yield generating abilities and all of that stuff. So that's where the demand is. The only use case that I can see of for regional stable coins is creating like an onchain effect world and we touched upon this briefly where if you have access to this maybe the world is going to look very differently in terms of you know what it's going to look like but so far in the last two years of having operated open effects we have pushed a lot of these regional stable coins through our platform we haven't seen much adoption and success from players because there's really no use case for it. Uh >> yeah, this is always a hot topic and and I'm glad we touched upon it here. Um, one of the things you started with was comparing to regions that had already functional RTP rails. Uh, and it makes sense and I think it's an argument that we've discussed on the show in the past where for domestic use cases, you know, if the payment is starting or ending in fiat and they already have local RTP rails that work, you know, you're just going to go through the path of least resistance, particularly the path that already has network effect. Um but there are regions that do uh you know heavy in trade that don't have RTP rails and then there's a question of what does the government choose as its technology base. Does it go and create an RTP rail with in its control or does it decide to go uh to the new open blockchain path unseen so far. Um, but I think that's one of the potential areas for non- US stable coins to take off, which touches upon the point you mentioned, which is where there isn't a good local RTP rail.

48:57 >> I liked fully aligned. And whether that becomes a CB CBDC or whether that becomes a stable coin, yet to be seen. I've heard all different iterations from the regulators, the central bankers. You know, it's a fascinating world that we're going to enter, like I said, in the next 10 years. Fun to watch it from here. >> And maybe for another time, we hear your 20 to 30 year vision. Um but we are at time here so that will need to be another uh another episode. Uh Praa this has been uh awesome. Learned a tremendous amount. Where can folks go to find out more about you and open effects?

49:28 >> Um thank you. Thank you for having me here and Raj. Um openfx.com is what our website is. If you want to find me, you can find me on LinkedIn. I'm on Pbaker ready. Open FX. You can look me up. I'm also on Twitter at Pbaker 2 ready. And you, Raj, >> you can find me on X at arbaric and mana.xyz. >> And for me, stable blueprint.com, xchuck_xyz, and LinkedIn as well, check a thanks for coming on the show.

49:56 >> Thank you so much, B. >> This was awesome. Thanks for bucker. >> Thanks so much 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, do us a favor. Share it with someone you know or give us a fivestar rating on Apple, Spotify, or wherever you get your podcast from. Until next time.