The Fintech OG's from TWIF

🎧The Fintech OG Series: Jack Zhang and Leif Abraham

• This Week In Fintech • Season 3 • Episode 5

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0:00 | 46:28

Welcome back to another episode of Fintech OGs with This Week In Fintech!

Today, I’m joined by two incredible founders who have each redefined their corner of the financial world:

  • Jack Zhang, Co-founder & CEO of Airwallex, the global payments and banking platform powering 150,000+ businesses
  • Leif Abraham, Co-founder & Co-CEO of Public, the next-gen investing platform helping the top 20% of millennials build long-term wealth

In this episode, we explore their journeys from coffee shops and olive oil to building billion-dollar fintechs, why they both value first principles thinking over traditional industry experience, and their candid takes on hot topics like stablecoins, AI in finance, and tokenized assets.

They share career highs, the lows of early struggles, and the unconventional advice they’d give to anyone starting in fintech today.

Huge thanks to Persona for sponsoring today's episode! Persona is the adaptable identity platform helping businesses fight fraud, meet compliance requirements, and build trust from the very first interaction. Check them out at withpersona.com/thisweekinfintech.

Welcome

Julie Verhage-Greenberg

Hey everyone, welcome back to the This Week in FinTech FinTech OG series. Today I'm joined by two incredible founders who have each redefined their corner of the financial world. We have Jack Zhang, who is the co-founder and CEO of Airwallocks, a global payments and banking platform powering over 150,000 businesses, as well as Life Abraham, co-founder and co-CEO of Public.com, the next gen investing platform helping the top 20% of millennials build long-term wealth. In this episode, we explore their journeys from coffee shops and olive oil to building billion-dollar fintechs, why they both value first principles thinking over traditional industry experience and their candid takes on hot topics like stable coins, AI and finance, and tokenized assets. They share their career highs, their career lows, and the unconventional advice they'd give to anyone starting in fintech today. Don't forget to like and subscribe on Spotify, Apple, or wherever you listen to podcasts, and let's dive in. Sweet. All right. Well, thank you so much for joining me, you guys. I'm glad we can make this work. I want to start off. I obviously know who you guys are and more about your backgrounds. I'm excited to dive even deeper into all of that today. But for anyone that isn't familiar with you and your companies, can you give me like a quick 60-second-ish intro on you and the companies that you guys started? Jack, we'll start with you. Cool.

Jack Zhang

Thanks, Judy. And I started the company in 2015. Initially, I was running a coffee shopping for Founding Airwalls. And we've been paying suppliers and packages around the world and coffee beans from Indonesia, Brazil, and Africa. And we had a lot of issues in international payments and high fees and payments got lost in transmission and very slow transmitting time, et cetera. So that we look into it and then we try to understand how correspondent banking works and slash sweep then found a lot of issues in the sense that we wanted to basically solve this global payments issue instead of continue to building the coffee shop. So that's kind of how we how we started the business. And fast forward 10 years now we are a global payments and banking platform empowering about over 150,000 businesses globally, helped them to operate beyond that whole country, whether it's receiving the payments online or offline, or set up a bank account globally, moving money around the world, or between the entities, managing the expenses, transfer, vendors, procurement, bills, etc. etc. to become a super app for businesses in terms of money in and money out, and all the treasury in the middle. That's that's air walnuts.

Julie Verhage-Greenberg

Amazing. I want to dive deeper into that in a second. But Life, give me a little bit more about you and your company.

Leif Abraham

Yeah. So we started public about six or seven years ago. And if you look at the investment space, especially in the US, you can literally look at it as the incumbents essentially have super clunky experiences that most of us tend to end up hating. And then all the like new generation of investment managers that came out that were very heavily focused on speculation, right? Options trading, single crypto, CFDs in Europe, et cetera, et cetera. And so we saw this opening to really build select the next-gen schwab for this generation, for people that take investing a little bit seriously, and where you bring together this ability for people to really build their wealth over the long term with a vast amount of asset classes as well as all the tools they need in order to build a public portfolio for the long term.

Julie Verhage-Greenberg

And remind me, what year was public started?

Leif Abraham

2019.

Julie Verhage-Greenberg

Okay. So at that point, Robinhood was taking off. I remember I think I, as a reporter, I think I first met with them probably like 2017 and then like 2018, 2019 is when they started to gain more traction. They definitely weren't what they are today. Obviously, 2020 and 2021 changed that drastically for both them and yourself in terms of client acquisition, business growth, et cetera. But talk to me a little bit about that. Since obviously when you were starting, the goal was to compete against places like Schwab. Is your goal to compete against someone like a Robin Hood 2 now that they're expanding to a different asset class where it's not just like the gambling type folks that they they had initially started out with?

Leif Abraham

Yeah, our audience is a little bit more upmarket. Like we serve like the top 20% of millennials, you can think of it. That's like our core of a user. And so our users are a little bit more sophisticated, a little bit larger account balances and so on. And that kind of lends itself to a slightly more sophisticated product as well. I think where Robinhood goes a little bit more mainstream and a little bit more mass market, we're a little bit more focused on the top 20%. And so, like if you think of, for example, account transfers, we get the most transfers from like a Schwab or Fidelity.

Turning Down A Billion-Dollar Exit

Julie Verhage-Greenberg

Interesting. Okay. And then Jack, I wanna. So you start you were running a coffee shop before you started Airwallocks. And if my memory serves me correctly, you also have had acquisition offers before from large companies. Talk me through turning down an acquisition and like continuing to build this business and the time frame for when that was happening and stuff, too. Like, what were some of the things going through your head then? How did you evaluate that? I have so much more I want to learn about all of this because it just seems like, especially recently, MA's really been picking up in the fintech space.

Jack Zhang

Well, that that happened a while ago. I think end of 2018, that's when Strive offered to buy us at $1.2 billion. And uh very attractive offer because at that time we only did just over $2 million in revenue in 2018. And obviously the companies did more than 10 million in revenue in 2019, but either way, it's still a very small scale compared to to where we are today, and certainly a very attractive offer from a valuation point of view. But ultimately, we think that we had a very different approach coming to solving the problem in the market. That if you're thinking about the problem we're solving is that 20, 30 years ago, we think about global business that you really think about as Nestle, Coca-Cola, Nike, that type of businesses. But since the rise of the internet, mobile internet, cloud, now AI, so every third generation of this technology innovation creating this massive amount of businesses, like internet native, and the nature of this business also are globally native, right? So a mom and dad shop selling on Amazon, or they open a Shopify store or creator transacting on the working for bigger platform, and they all kind of global businesses from day one. They have revenues around the world, and they have suppliers and employees or vendors around the world, and they have expenses around the world. So that just the nature of the internet is borderless, and that just created generations of generations of modern businesses that are globally native. And and everyone just wanted to be the platform to service in these global businesses. And to do that well, you need both payments and banking. And when you look at acquisition offer, strive was really much of uh a kind of a money-in-app. Essentially, it's just really focused on online payments and growing the GDP with the internet. And then we have a quite different mission is to be the payments and banking platform uh to empower modern businesses to ultimately become to build in the future of global banking. And to do that, it's we need a different sort of mentality. We need to be regulated around the world. And and we need to not only build uh the money in app, we need to build the banking app and the the money out app as well. So that kind of gives us a very different perspective to the mission and and also just stand alone with the a hundred billion dollar plus opportunity in front of us. And and we decided to basically continue to build on our own, and that's because the the opportunity is too big. And I think if you're looking at like the the folks that we're competing, like for HSBC or Citibank, and it's just fascinating to be able to compete in when and build a larger business than those folks in the next decade.

Julie Verhage-Greenberg

Yeah, so much has changed since then. And so at that point, you got that acquisition offer, and life was roughly around the same time that you were starting public. How did you guys meet?

Leif Abraham

How do we meet? We met through I think it was ahead of Sophia event or so, I think was the first time we met.

Jack Zhang

But yeah, met in there at Vegas around Lonnie. Yeah.

Julie Verhage-Greenberg

Where so many FinTech friendships are born. But also, if it was around like, you know, sounds horrible, by the way. It does until you're like, if unless FinTech, you're like, no, that actually makes a lot of sense too. Lots of friends made over drinks in the black jacket.

Leif Abraham

That sounds better. That sounds much better.

Julie Verhage-Greenberg

Or at an awesome concert that FT partner throws, which they need to do like a really good one again this year. They have to be crushing it with all of this like MNA and IPOs, like Steve, we we need some bit, you know.

Leif Abraham

Exactly. What's up? Yeah, dare, dare him a little bit. Come on.

Founder Drive And First Principles

Julie Verhage-Greenberg

I think he's a little scared. Like post Malone was pretty legit. So topping post Malone a couple years ago is gonna be a little bit tricky, but he can do it. Okay. Diving back in here, it sounds like both of you had some passion around what you started, right? It wasn't necessarily just like knowledge around it, but it does feel like there was passion involved. And I feel like you have to have that. Because I'm sure you guys each have a lot of other ideas, like, oh, someone should do this for a startup. But unless you have that, just like I have to do this type thing, sort of like as a reporter, I remember people saying, don't write a book unless you just feel like you have to write. And I feel like it's very similar to doing a startup. Don't do a startup unless you have this idea and you just have to solve it. So talk to me a little bit about when you first started brainstorming and getting this urge to do that idea and what did tip you over the edge. Like, no, like I need to be the one that goes to solve this. I can't let someone else do it for me. Either one of you can go first too.

Jack Zhang

I'm not sure I had that moment. I tried many things before Airwalls, actually. I I was an FX algorithmic trader and market making, building market making platforms and various investment banks and hedge funds before and on the side. I was doing a lot of side hustle. Started about a dozen businesses in real estate architecture, design, importing, exporting, trading, coffee businesses and burger chains and like olive oils and red meat, it's like anything you can think of that I olive oils. I haven't heard that story. Yeah, yeah, with exporting olive oil from Australia to South Asia and just like general Asia countries, and because there's a booming in demand and olive oil switching from peanut oil. So I made a lot of money doing that. But uh not none of those businesses, actually, everything is profitable than airwalls. It's funny. We only start getting profitable now after a decade of building it, but those businesses are profitable from day one and just not as interesting. It's not able to scale that much. And in 2012, while I was starting the coffee business, I actually wanted to start a business very similar to Square, building opponent sales and payment system. That's when AFC payment just started. And I was quite fascinating about that. And then I pitched the idea to my CTO and co-founder, and and he saw like a QR code coming out of China, and he's like, dude, I think QR is gonna take over the world is so easy. And I was debating between like AFC and QR, and then turned out to be neither neither of us are right. And QR did take over China and some of the Asian countries, and where the rest will become like this touchless, sort of this sort of carless AFC payments-dominated ecosystem. But if we have started, we might become a bigger company by by this time because we'll start the company three or four years earlier. I've been very just open-minded of exploring ideas where I do know I wanted to start something in technology because I was an engineer by trend and I always run code and I want to build a business that scale it into creating a lot of impact. I was when I was doing a coffee business, I was like, like even we have thousands of stores. If the coffee business gets shut down tomorrow, I'm not sure how many people are gonna miss that. I'm not sure people are gonna care about that much. Yeah, you build great coffee, yeah, great coffee, but it doesn't really create that much of an impact to people's life. Because people just have many, many alternatives. Where if we build fundamental economic infrastructure in a world that powering millions of entrepreneurs and businesses to grow their business globally, beyond the border, to help them to operate efficiently, now especially with AI, to create an alternative finance function for them, to save them time and costs, and to give them true autonomous to focus on that, building their own mission globally, that to advance the economy, that that's something a lot more meaningful. That's something a lot more significant. And I feel I'm like at least kind of building something significant and important. I think similar to what life's building, life could talk about it, why he's doing it.

Hiring Without Industry “Experts”

Julie Verhage-Greenberg

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Leif Abraham

I generally speaking, I think I agree with Jack said in the sense of that I don't think it's a sense of like I have to be the one building that. I'm sure those founder stories exist. I would still argue that most founders at the end of the day are first off driven a little bit by ego, and the sense of that you want to prove yourself, you have a chip on your shoulder that you want to fix in some way, wherever that might be coming from. And and therefore I think the best founders have the ability to be successful in pretty much any industry. And I talk about Jackmart now, it's like on the oil or global payment infrastructure. It's like like two different sides of the same coin, right? And so I think it is very much I think very much driven by that most founders have a ship on their shoulder and they're looking to be successful in their own right. And maybe to prove something to themselves, maybe to prove something to I don't know, their dad. I don't know, tell me. But but I do think most of it is driven by that. And you could argue that's a little bit ego or whatever, but I think that's a powerful force that at the end of the day I think is creating a lot of motivation. And at the end of the day, I think I know a lot of founders who have never been in the industries that they're in now before they started their companies. And myself included, right? Not a finance person, not a fintech guy, was not deep in investing before I started public. And now I have deep discussions about market structures with people. And it's just because you go into it with a little bit of naivety in that moment, and that also helps you to be a little bit more first-principled thinking. And I think that also helps you to potentially be successful because you're asking questions that others might not who have been deep in that space before, and so on.

Jack Zhang

We actually love to recruit people who are not in banking and payments that we we don't think that's a bonus when we're interviewing people, you know, that whatever that experience you have might not be relevant, might award you from thinking first principle.

Julie Verhage-Greenberg

Has that always been part of your ethos in hiring, or is that something that you realized?

Jack Zhang

Just made too many mistakes hiring experienced people. I hired a bunch of people from Citibank when I started the business, and a bunch of senior people essentially come to tell me that how this business should be built. I remember we had a board meeting in Japan and the investors we had like this leadership offside in Japan. The whole leadership offside is a bunch of Citibank, ex-Citibank bankers telling me, I don't know, I have no idea how to build this payments business, and I should step down from the CEO.

Julie Verhage-Greenberg

Wow.

Jack Zhang

Obviously, that didn't go very well with these guys because they all get fired.

Julie Verhage-Greenberg

I was gonna say, I I doubt they still work for Airwalls. Interesting. I went and do you think that's something that changes based on the stage of the company? Like it sounds like you did that a lot early on, where the company's smaller and hasn't been built out. Or do you think that's like continues throughout? I would I would just have a hard time thinking now, like the Citibank person at Airwall's scale, at airwalls success level, would still say something quite that harsh. Or do you am I wrong?

Jack Zhang

I mean, I think because at that time we had a very little revenue in the business have not scaled early like 2018, right? Almost no revenue. I have no credibility to prove I'm right by any means. And they feel they have all the experiences and they can overpower me and then tell me how to build a business because they have seen scale and clearly I think they are wrong. And my approach is right because now I have I have enough credibility to prove the first principle thinking, the curiosity, the grids, the determination are far more important than the knowledge you have and the experience you have in building a startup.

Julie Verhage-Greenberg

I just I'm trying to think through this. One, I think that that probably does change a little bit once you do have the proof point. It still might happen, and it doesn't mean that you should go hire city people now or experienced people now, not just city to hire on them. There's a lot of other places that I'm sure would be similar. But how did you as a founder like stay so convicted to your idea through all of that? Because there are these people that have so much experience in the industry that you're trying to build in, telling you you're wrong, and you just have so much conviction that you're like, no, like I'm gonna fire you and prove you wrong.

Jack Zhang

You think about it, the when an engineer try to solve a problem, they always come as first report to understand what problem they try to solve from a customer standpoint, instead of I want to do X, Y, that because that's how it should be done. Right? Nothing should be done certain ways unless it actually solves a particular problem. And the problem we try to solve is instead of building, you know, like a into Swift, we need to create this brand new payment network. We don't need to stick with the the SWIC, the SWIP code messaging structure or everything. We need to build an API very similar to how Scrap does online payment checkout, that we need to basically move in money essentially as fast as possible to be best, like instant, right? Now over 95% of the transactions are not through airwallets, are not going through Swift anymore. It's going through our own proprietary network, and over 65% is instant, right? So those just the first principle, you the consumers or the businesses that wanted the payment to move around the world instantly and as cost as cheap as possible, and that needs to be as simple, the you the experience needs to be as simple as possible. So these type of things always true if you focus on the right outcome for the customer, then you know how was done in the past with Swift, then which taking days and weeks to moving money around the world.

Julie Verhage-Greenberg

Life, I saw you shaking your head in agreement quite a bit. I feel like you might also have some shot thoughts to share on this topic.

Career Advice That Actually Compounds

Leif Abraham

Yeah, I think generally speaking, we have internally this little saying of if someone tells you this is how it's done, there's probably a better way to do it. And obviously that's not necessarily true in all cases. At some point you you need some people who understand the space really well, right? And we have some of those on the team as well. But I think when it comes down to when it comes down to uh who you hire, there it's important that from the way they work and the way they think about their own grid, that they're willing to get their hands dirty, they can actually be deep in the topics and so on. And I think we've made some mistakes ourselves in the past where we hired from big tech companies and so on. And like right now, when we get a resume from someone who comes from big tech, it's actually a negative for us because they come in and they somehow process and so to say policies of like khoodo smooth wheels in the organization to get something done and so on, like that, those are the things that they've that they've learned and they've obsessed over. And and we are much more in this camp of every manager is also an IC, everyone is deep in the work. And if I look at who the top performers at public are, I think if you would look at their resumes uh blindly, just look at their resumes of the companies that they've been before and whatnot, you would likely not be impressed because you would look for badges that they've collected in their careers of great logos and great organizations and great universities and so on, and you will not find those. And I think a big part of building a company, especially in the earlier days, and as a founder, is the ability to find this undiscovered talent and to be able to look for potential. And street smartness much more than badges and years of experience. And in my experience, going for the badges and the years of experience has pretty much always turned out to be negative.

Julie Verhage-Greenberg

Interesting. So one of the questions I like to ask is what advice would you guys have for someone that's just starting out in fintech, whether it be like an undergrad or an MBA. I feel like you guys might have some unconventional thoughts here based on your responses to the last question.

Jack Zhang

I wasn't sure there's anything specifically in fintech. I think I think general just in building startup, there's very as a lot of commonalities in hiring people. For us, we focus on, like really just focus on three things and raw intelligence, curiosity, and an ability to push things through walls to get shit done. Uh will be the last one. And and then by looking at so many of the successes, people we have hired here, that's probably the three most important things I would say, whether you have an MBA or MBA is actually not a positive thing in sort of when we're interviewing people, unless you're actually looking for a career change. And that's we think is a good thing. If you are in a completely different industry post-NBA, which is which is positive, but like if you're just looking at it to kind of to career advance yourself, I'm not sure that we we buy into that to that philosophy. And and we're really looking at that how much you have achieved in life, especially early on in life and career and and how you build your characters, and that's I would say more important than the badges and and other things on your CV.

Leif Abraham

Yeah, and I think the one of the biggest things I think that matters is attitude. And attitude from the perspective of are you someone who is default yes and let me figure it out? Or are you someone who is default questioning, negative, etc. etc. or pessimistic in some way and that's a in that regard? And and and I would say it's like if you're someone in any, like FinTech not specifically, like in any job or whatever, I think the reason why people want to work with you is number one because of the attitude, and number two, because of your skills. And attitude, I think, is something that often comes a little bit more natural. And so there's some people who just have the attitude, and there are some people who just fucking don't, let's be honest. And then there's and then there's the sense of do you have the skills or not? And the skills you can acquire, but again, the attitude will help you to acquire these skills as well. And I think the main reason, and I think there's actually a great clip from Obama who was like, in some interviews been asked of like what advice, what career advice he would give for young people or something. And he said something in the like like it like in tune of if someone has an issue or needs something done, be the person that says, yes, I'll get it done. And if you then actually fulfill that, and you just be like, Yes, you're the person who gets it done, and you do that again and again and again and again and again, that will build your reputation and that will make people want to work with you. And that will build your professional network, that will get you into new doors. Those are all the people that compete for hiring you, et cetera, et cetera. So that stuff just compounds in careers over time. And so, number one, attitude of like be the person that just says yes, and then the second, have the skills to actually get it done. And I think if you have the combination of the two and you focus on that, you will likely have a very thriving career, no matter if it's fintech or not.

Lows, Doubt, And Staying The Course

Julie Verhage-Greenberg

Yeah, the episode that I just got done recording, David Haber was one of the guests, and one thing that he said is he always tried to find people at Bond Street or wherever he was working that he would call safe hands. He knew that he could give them a task or something to do, and he didn't have to worry about it. They were safe. So be safe hands was his tip, and it sounds like both of yours was very similar. So thinking through that was the advice you have for them on their careers if they're just getting started. I want to dive back. We obviously look at both of you now, very successful entrepreneurs in the fintech space. That doesn't come without its lows as well. So I'd love each of you to give an example of a time where you had a career low, how you got through that, and then also a career high, and like how that made you feel and how that maybe like ignited the spark to like just keep pushing and stuff like that as well.

Jack Zhang

I think I've said to I have too many career lows. The the first five years is full of lows, not many highs. Struggling with part of market fit, going going to different markets.

Julie Verhage-Greenberg

We well, the first five years you didn't know life. So, like, of course, that was full of love. Then you met him at Money Money and everything.

Leif Abraham

It was the biggest loss. Yeah, keep saying, keep saying it was a poker table or something.

Julie Verhage-Greenberg

It's way cooler than saying it was some then you met him at the poker table and your life changed.

Jack Zhang

Now we're talking. There you go. Yeah, definitely need more drinks to to to to get around the lows. And I think the some of the low points will be like the first couple years that when we go to the new market, that gets full airwallet to build a global network. We always need to expand it to new markets. And basically every new market we went to, we never succeeded the first time. We we even in our home country in Australia, we tried the third time, we succeeded. And I remember we were at Hong Kong and we we failed miserably the first time, and we went to the UK and we failed twice. And basically we have to rebuild the team the third time to succeed. And we we're raising money that never that easy, and it's always challenging. We always have to explain why you you guys in so many different markets and how you're able to take a significant share in that market, and many, many basic lessons that just give you a lot of doubt on whether you're doing the right thing. But at the end of the day, I think as a founder, you just have to really stick on the mission of the company and and just keep moving on until my my my co-founder used to see that building a startup is almost like driving in in fall. You're just never really seeing anything beyond two, three meters. That's like the destination quite far away, and then that's the right direction. The only way to reach the destination is keep driving. I like that logic.

Leif Abraham

Yeah, exactly. I think like talking about achievements is always a little strange because I think the the curse of the founder is that you might always have a little bit of like imposter syndrome, and especially once you reach a certain stage and like you get the unicorn stamp and blah and whatnot, and you jump on podcasts, and it's always like, oh my god, so successful, blah blah blah, and you're like, cool, cool, cool, and it feels nice at the time, but then you turn around and you like you cry in your bat, realizing that everything is not as great as you would love it to be because you see all the issues and that other people don't necessarily see. And so there's a little bit of like I think a little bit of like call it healthy pessimism that comes with being a founder that you feel like nothing is ever really good enough. And I think that is also again what kind of keeps it driving in that sense, right? So I think it's I think it's tough to talk, I think it's tough to talk achievements in that in that way because it always feels like you're not really there yet.

Jack Zhang

I think when we I think when we build a bigger business than Citibank, I will I will call it achievement.

Julie Verhage-Greenberg

How close are you?

Jack Zhang

I think we we uh we should be able to get that done in the next decade.

Julie Verhage-Greenberg

There you go. All right, I'll have you back on in 2035 and be like, so how does it feel?

Jack Zhang

I hope it's sooner than 2035, but let's see.

Julie Verhage-Greenberg

All right, well, that's within the next decade, 2035 or before. We'll we'll put it there.

Leif Abraham

Um you will come back and be like and be like, I don't feel good enough yet.

What Matters In FinTech Now

Julie Verhage-Greenberg

Or you'll be like, I I'm not talking to you anymore. No, I I'm what do you think? Okay, switching gears just a little bit. Other than the areas that you guys are in right now, what areas do you find most interesting in fintech at this point?

Jack Zhang

The biggest topic in fintech is stablecoin.

Julie Verhage-Greenberg

And you have a very interesting take on stable coins too.

Jack Zhang

Yeah, and the biggest sort of interest the most interesting is is stablecoin AI, and obviously, which is happening right now, and another thing that's coming up is agente commerce, which is impacting payments a lot, right? So we can we can dive into either topic. And I know live have a lot of interest in tokenized stock trading as well. So we had a debate a couple of weeks ago on why why why not?

Julie Verhage-Greenberg

And I'd love to hear your thoughts on those two things, and then I would love life's thoughts on on tokenized stocks since Robinhood obviously launched that recently. Jack, that you brought them up. You you go first.

Jack Zhang

Okay, I think stable coin, I think people think stable coins to moving money around the world. I obviously publicly disagree with that point, and the the kind of speed and cost on on-ramp and off-ramp is still significantly higher than the traditional rails. We're moving about $200 billion annualized right now, and it's still growing close to 100% year on year, right? So, and we're already moving 95 of the transactions, 95% of the transactions using our own infrastructure, and most of that is near instant or instant. And it's we don't charge anything for our customers, it's actually free to move money in our network. I don't really know how you can innovate something that is already instant or near instant or free. So I would say that it most of the people using the stablecoin is cheaper and faster and free and instant, all that. They talk about what happens on-chain, on this, on the on the blockchain, right? They do not talk about the the on-rep and off-rep. They do not talk about the complexity in the middle, the the tree free management between the exchanges, the the liquidity providers, and all that. And then and then most of the people just try to avoid talk to talk to about the reality just because they everyone have a personal agenda in the crypto world, right? And I I I just don't really understand why they created so much vibe on stablecoin just because of money movement. I don't get it. I think the future of stablecoins to able to build an a sort of internet native sort of financial ecosystem. But that's gonna take a long time, right? That you can you if to say you already processed the payment on the internet and provided the money is clean, that provided the platform has distribution, you can issue financial service product that without doing the offering. That you can issue stablecoin back card, you can do stablecoin deposit product, you can use stablecoin to do treasure management, et cetera, et cetera. But that requires adoption, a wider adoption, far more beyond the scale of what's happening today. And I don't really see that happening yet. And that might take an extra three, five, or ten years to ultimately happen.

Julie Verhage-Greenberg

Which comes first, that or you being bigger than city?

AI And The Race Beyond Banks

Jack Zhang

I I I think we we definitely hedging our bats, and I could possibly get entirely wrong, and it does take three to 12 months instead of three to five years, right? So I'm not suggesting I'm 100% right all the time, and I'm I'm just saying that's my prediction. And obviously, there's use cases of dollar addition, there's use cases of moving money in those global south countries. Like people need to sending money to Africa countries or Latin America countries, where SpaceX or other sort of American corporations need to start linked that need to collecting the revenue from these emerging markets where they do not do not have a very effective way of moving the money back to the United States, but now they can net it off with the remittance providers. But the the challenge is like, how do we know the remittance providers from these crypto exchanges the money is clean? I don't really know how they solve this issue, but today I couldn't solve it. And the the there's still, and obviously now we have Genius Act Pass and we have regulatory clarity now, which is which is great. And that doesn't build the entire ecosystem in one day. That you still need time for adoption, which is similar to how mobile internet or AI get adopted. The other big use case is dollar redation, but that doesn't that to me is more of a regulatory object file, right? You regulate in the United States, but you're offering a financial service product which is dollar bagged in Argentina. The Argentina central bank definitely not gonna be happy about that. But that's just how the world rolls right now. And as a global payments entity, we are regulating a lot of the art in our country like Mexico and Brazil. So we're definitely not gonna do that because the central bank will shut our core business down if we do that. But for startups that have nothing to lose, that might be okay. And they might never need to do business in Argentina, which they would take the risk to offer the product without regulating Argentina, which is which is totally fine, right? And if they want to take the risk, that's that's that's entirely their core. But from Airwallet's point of view, compliance is the number one thing that we need to think about, not just in the United States, but globally. And I think on the other topic on AI, I think unlike stablecoin, there's still a lot of uncertainties on the future of the building the native internet native ecosystem. AI is changing the how humanities live on this planet and operating and then live their lives, right? So I think ChatGBT or OpenAI have already had over a billion dollars, a billion DEUs already. So that's clearly shaping our industry. If you're looking at how banking or financial services is done in the last 30, 40, 50 years, and it's really focused on regulatory infrastructure and then financial product. And in the last sort of decade or slightly longer, there's a lot of fintechs like Revolut and Stripes and Robin Food, et cetera, that they they try to build a better UI on top of the existing financial infrastructure so that to provide customers a better experience that's significantly better experience to help the customer to do payments or trading or moving money, whatever. But what hasn't been done is really moving to that kind of agentic AI world where the bank almost already lost the race right now by this point. Because to building AI application, organic finance, organic payment, you need that operating system, that kind of application layer, that business operating system, business operating system beyond on top of this financial service product. If you don't have the application layer, there's no way you can use AI to trigger the financial instrument or the trigger the financial instrument through the workflows through the operating system. Because the cycle innovation is getting smaller and smaller over the last decades. Whether if you think about internet, mobile internet, cloud, and now AI, it's just getting taken shorter and shorter so that the incumbents just have less and less time to catch up. And they haven't really catched up the application layer and or they haven't done anything in the application layer, the business operating system layer. They haven't really moved everything to the cloud. They haven't catched up on that yet. Just no way for them to catch up on the AI race.

Julie Verhage-Greenberg

At this point, it's going so fast it's hard for even startups to keep up, let alone the incumbents to keep up with that.

Jack Zhang

Correct. I mean, that I I I was talking to to live a couple of weeks ago. I have a lot of anxiety in the last two years, simply because I I just couldn't keep up on how fast AI is racing right now. And and just think about how the incumbent is gonna be building with dealing with that, right? So I think by this time, I think it's more of a fintech race. It's no longer a race between the incumbents.

Tokenized Stocks And Regulatory Arbitrage

Julie Verhage-Greenberg

Totally. Like, let's close it out with you talking about tokenized assets. I feel like that's a good way to wrap this up since we're coming up on time too.

Leif Abraham

The TLDR is, I think this version of tokenization is being discussed right now is regulatory arbitrage. It's not actually innovation. And it's easy to say, hey, if you tokenize a private company or a public stock and you put it into other countries and jurisdictions through, for example, crypto regulation, but not through the actual regular securities regulation and so on, that that is democratization and giving people more access. But if you're really honest, that is just regulatory arbitrage. And that creates risks in terms of investor protection. That creates and at the end of the day, it's also just piggybacking on the back of actually traditional finance and regulation. Like if you have a tokenized stock, for example, that stock, the act, there's still a real stock behind it, right? Behind that token. And that is still custodied by the broker or by the custodian in that moment. That and that lives off the regulation and the security that, you know, in whatever jurisdiction that lives in, called in the US, that the SEC and FINRWA have created, and that security they've created, because it's still living there, and you don't actually own that stock. You are essentially just owning a derivative of that stock, and that for example. And the same thing for private assets. You are not owning the stock, you are owning a derivative of that piece. And you could be like, that doesn't matter, I can still trade it, etc. etc. And it'll be like, yeah, sure, that's true, but what is your benefit? Like you as an end user now, like what is your benefit? And the sense of tokenized public stocks, I would say the benefit is non-existent, to be honest. I do not see the real benefit for you as a user. I only see downsides right now because there's all protection that's missing and uh a bunch of other things. And then in terms of private companies, there's the issue of float, proper market pricing, and so on. And to give you an example, we as public used to offer private assets through a regulatory framework in the US called Reggae Plus. And you can think of it as like you can take a private asset, take a piece of art, or we had like music royalties, or it could be also shares of private companies, and you would run it through this regulatory framework called Reggae Plus, it turns it into a tradable security, and now you have shares of that security that in the end of the day is like a shell around this private asset that exists somewhere in real life. And what happened was that because these assets have so little float, and so there's so little amounts of market cap that's actually tradable, off the market's actually tradable, that if the demand in any way exceeds that, you're just pumping the price up. And so it becomes speculative assets super damn quickly because it detaches itself of the real lives value, like of the real market valuation.

Julie Verhage-Greenberg

It's like a beef stock right away.

What They Are Building Next With AI

Leif Abraham

Yeah, exactly. So like if you tokenize 0.01% of open AI and you put that on the chain, every crypto bro will celebrate it because there's another because there's another point that you can celebrate the amazingness of crypto. But in true reality, what is happening right now is that you're creating a super low float float asset without any without any true ownership of that actual stock. And if the demand in any way exceeds the amount of float that's out there, you're just gonna pump that price up, and suddenly the paper valuation of OpenAI is not a hundred billion anymore, whatever it is right now, it's suddenly gonna be like five trillion or something because the low float just pumped that stock up. And then it's literally the cliche thing of what happened to like a GameStop or whatever. When the float is very low, a little bit of trading volume can pump the price up very easily, and those and and those things can just happen super damn easily. So it turns these assets into these speculative assets really, really quickly, and the market valuation of the shares that someone owns might be completely detached of the real valuation of that asset. And and I'll be like, again, like I don't call that innovation. That is not something that is like brand new or something. Like tokenized private assets have existed in many forms in different stages from different companies for a long time. There have been companies doing it with treasuries, there are companies doing it with art and whatnot, or royalties or whatever. That is not necessarily new, but also it has not really found its footing yet because it doesn't actually work well. And so and so it's a great PR thing. We did it ourselves as well. It was great for PR, great music, like great. If you Google it right now, you'll find amazing press stories for public launching music royalties. We shut it down on the end because at the end of the day, it's not actually a healthy market. It's not actually something that other than speculating on something, someone can really like see as a serious piece of their portfolio. And I think therefore it's still very early. And I think the current iteration at least of that tokenization is just not really what it is.

Julie Verhage-Greenberg

So over the next six to twelve months, not stable coins, not tokenization, those two things aren't exciting to you. What does excite you over the next year?

Leif Abraham

If you share the sounds, AI.

Julie Verhage-Greenberg

I think high level any any certain aspect of AI.

Leif Abraham

Let's get a little bit more in the two pieces in our camp. One piece is high level. I think what is happening is that there's now the chance to reinvent essentially how people engage with any product in this world. And so any type of interface that's out there, any product that's out there, any service that's out there, the way people actually use the service, use this product, I think there's a chance now to reinvent all of these. And so that's why it's such a free field for founders right now to go into any industry, any product, and just start first principles thinking of what the technologies that are out today, what are the efficiencies, what are the new ways of doing things that suddenly are being created. And I think there's a gold rush on that. Now, the second piece for us specifically is we're very excited on just like what AI can do in terms of personalization of portfolios. And so we launched this one thing called generated assets. If you go to generatedassets.com, it's essentially your ability to create, to turn any idea you have into an investable asset. And so you can literally turn any prompt, call it CEO, said go on podcasts, and it will literally go find the companies of public companies, and that's on that moment, obviously, of companies that always own podcasts, create an asset out of that, create a little index out of it, give it a name, give it a little logo, a little description. It weights the index, it tells you why it added certain companies to the to that index, and then after. Actually, it makes that investable. And that is always a little bit of a wacky example I'm making right now. But what it really does is it takes these like cookie-cutter, one-size-fits-all type of investing, which you've seen with ETFs and sometimes even financial advisors in their products, and turns it into a world where everyone's portfolio can be completely customized. And we often talk about the sense of that in the old world you had either your financial advisor who does everything for you, or you had your self-directed investing platform where you go in and it's just charts and tables and just do everything yourself. And I think AI turns that more into a spectrum where it's not just binary, you kind of like pull it out and it becomes a spectrum. And those two worlds merge a little more, and you have the sparring partner of how you invest, how you do research, how assets are being created, and so on. And generate assets, for example, is one of those executions of how we execute on that kind of vision.

Julie Verhage-Greenberg

Jack, what about you? Close this out.

Jack Zhang

I mean, for for us, it's really the kind of building that overall business operating system. If you think about some of our customers that are operating globally, they used to use a dozen banks. And to using AI to automate the financial operation, you need to do integration with all these a dozen banks, and every bank has different data points, different standards, and just make it extremely hard for the agent to perform autonomous finance options, autonomous finance operations. Where using AirWallets, they able to standardize the data layer, able to consolidate all the money in apps and money out apps and all the treasury in the middle to a single platform. And then we have all the business operating system and working together with AI to automating these workflows for you. I would say that's the biggest innovation we we we have this year, and we're really working really hard to launch this product before the end of the year.

Julie Verhage-Greenberg

Amazing. All right. Well, thank you so much for joining me guys, especially both of you have crazy busy schedules. Life, you are on holiday right now. And Jack, I'm gonna have you back in 10 years or less to talk about what it feels like to be bigger than City. You heard it here first.

Jack Zhang

Yeah, there.

Julie Verhage-Greenberg

I will thank you guys. I will let you go back to work or holiday or whatever you have to do. But I'm excited for listeners to tune in.

Jack Zhang

Thank you.