F-Squared Podcast Episode # 4 - Stablecoin Hype Curve, Operator Checklist

What excites investors and entrepreneurs in today's Stablecoin environment and why thoughtful builders still focus on licences, float, and corridor depth.

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Why I wanted to have this Conversation;

The Stablecoin industry is growing, some operators on the continent are doing north of US$ 200m per month on Stablecoin specific volumes. Payment companies are spending a lot of time supporting Stablecoin based transactions and its simply an area that one cannot ignore. I wanted in this instance to have a conversation with someone who has been operating in the African payments scene for a while and has developed the requisite experience and hard nosed pragmatism that comes with years in the trenches. I also wanted to have someone who’s building specifically for Stablecoins and get their views.

I invited Eytan Messika from Nilos and Nicolai Eddy from Nala and Rafiki to unpack what stablecoins are really doing for African payments. Together we contrast the snail pace of correspondent banking with the almost email-like movement of blockchain liquidity networks. Eytan explains how Nilos opened fifty exotic currency corridors in half a year, while Nicolai walks me through the daily headache of funding float across eleven African markets. Importantly, Nico also expertly explains what the actual problems are in African money movement and gives a realistic positioning of how Stablecoins can add value. He’s long-term optimistic but also practical about the road ahead. We debate regulation, hunt for hidden treasury costs, and ask whether central banks will speed things up or slam on the brakes. If you want a frank operator view of tokenised dollars, this conversation is for you. I may be biased ;-) but I really enjoyed this one.

In this episode, you’ll hear

1. Why a transfer from London to Ghana can already arrive the same day, so the real win with stablecoins is freeing up cash, not just speeding it up.

2. How remittance companies tie up money in local Ghanaian, Kenyan, and Nigerian accounts and how holding stablecoins lets them use that cash elsewhere.

3. What makes regulators nervous about crypto, why talking to them early matters, and how licences keep a business alive for the long haul.

4. The simple price gap: in some markets a stablecoins such as USDC has a 30-50bp price differential to fiat dollars and how remittance companies share that saving with customers.

5. How Nilos is using “always-on” AI’s to scan the market, post fresh exchange rates, and trade automatically while humans sleep.

6. How, despite the current hype, nothing much has changed over the last 12 months when it comes to Stablecoins.

Key Lessons Learned

Regulation and policy

1. Why global banks such as JP Morgan and Citi insert deliberate friction with south-north money flows and how that drives demand for stablecoins;

2. The choice regulators face when they label stablecoins as foreign currency or as digital assets and the tax consequences of each route;

3. How Rwanda’s hands on dialogue with private firms offers a model for smarter policy making across the continent;

4. Why long term winners still secure licences early even while innovation outruns legislation;

Liquidity float and treasury

1. The real cost of holding Ghanaian Cedis Kenya Shillings and Naira to guarantee instant payouts;

2. How settlement lags cut off times and weekend currency swings drain working capital;

3. Concrete examples of remittance firms saving up to fifty basis points by arbitraging the stablecoin premium in Nigeria;

4. How every importer or merchant you serve can also become a liquidity supplier creating a powerful network effect;

Technology and infrastructure

1. A step by step map of a full stablecoin rail from local fiat on ramp through global wallet to foreign fiat off ramp;

2. How artificial intelligence now scans peer to peer markets quotes live prices and automatically executes trades with multiple providers;

3. Why redundant bank integrations and same bank transfers still matter for a truly instant customer experience;

Use cases and business models

1. Four proven applications today; importer dollar sourcing, remittance inflows without pre funding, intra company treasury balancing, and hedging against local currency risk;

2. Why depth on one corridor often beats shallow global coverage on both cost and compliance;

3. The ongoing shift from over the counter email deals to fully productised application programming interfaces for embedded foreign exchange and payouts;

Competitive and strategic outlook

1. Reasons the market can support several billion dollar payment companies rather than a single giant;

2. How Stripe’s recent stablecoin move signals mainstream acceptance while crypto native players keep pushing the frontier;

3. The assets that build lasting moats including regulatory goodwill deep bank relationships and intelligent automation;

CBDCs and future rails

1. Why many African central banks remain wary of central bank digital currencies and how that cautious stance shapes the roadmap for compliance focused fintechs;

2. A thought experiment on settling pound CBDC to naira CBDC and the real world hurdles such a system would face;

3. The takeaway that speed and transparency will eventually favor stablecoins while dual exchange rates persist until trade balances improve;

Transcript

Samora: So the Collison brothers in their latest annual report said that stablecoins are superconductors for the financial services industry. There's been a lot of activity in the stablecoin space from Stripe acquiring Bridge. MoonPay has been quite active on the acquisition front and in Africa we are seeing huge adoption. There's a recent report from Chainalysis that showed that Nigeria did $60 billion last year of stablecoins. And so it's useful to see in such a massive growing industry where the real pockets of value are, understand the difference between hype and reality, and just get a good handle on the space. For that, I wanted to speak to two very smart people. Eytan Messika is building Nilos. He's been very active on LinkedIn and as a company in driving the stablecoin message. Also Nicolai Eddy, Nicolai is the COO and part of the founding team of Nala, and their work has just been incredible. I wanted to speak to these two people to understand what's going on in the stablecoin space, what does the future hold, and what are some of the things that could actually lead to a decline in the industry. Today I've got the pleasure of being with two super smart guys, Eytan Messika and Nicolai Eddy. I met Eytan last year at the Africa Fintech Summit, and that was around Q3 Q4. He was just thinking about getting into this liquidity provider stablecoin business in Africa. In the period of six months, he's been executing like crazy and I think now he's gone to market with a product and we'll talk more about that. So Eytan, welcome. And then I'm also with Nicolai, who's a COO and part of the founding team at Nala. I think recently Nala got into India and before that they got into Philippines, two of the biggest remittance markets in the world, and they're just really executing at a global level. They've been doing this for well over four years now and they have a very deep understanding of moving money across the world and particularly in Africa. So Nico, hi, welcome.

Nicolai Eddy: Sante. Thank you so much. It's great to be here.

Eytan Messika: Thanks.

Samora: Great to see you.

Eytan Messika: Yeah, man.

Samora: So the reason I wanted to have you two was, as I explained in the email, I just wanted someone who is stablecoins and someone who's been dealing with the problems of traditional fiat and just try and understand the space. I'll just have you guys do quick intros to yourselves and then we'll get into the thick of things. Starting with you, Eytan.

Eytan Messika: Pleasure to meet Nicolai. I want to thank you because we were meant to meet with Nicolai for a long time, but we didn't have the chance yet to meet. It's good. I'm the co-founder of Nilos. We started the company four years ago. We're basically building a liquidity network in exotic currencies. Everything is stablecoin based working with probably the biggest payment companies in the world, letting them access liquidity in Africa mostly, Latam, Southeast Asia and also some part of MENA. As you said, when we started the company initially, we were mostly focusing on trying to build good on and offs and then we extended to currencies about six months ago. In the last six months, we launched about 50 markets, closed probably 50 clients, from the remittance side to the merchants and fintech sites in emerging countries. That's been one hell of a rate, but it's just a beginning. Happy to be here.