Blockchain Money Transfer Tools for Finance Leaders to Cut FX Costs Globally with Kevin Lehtiniitty

Episode Overview

Kevin Lehtiniitty is the co-founder and CEO of Borderless.xyz, a fintech company enabling global payments through the power of stablecoins. A long-time crypto advocate, Kevin entered the space in 2014 and helped launch the first fully reserved US stablecoin, TrueUSD, along with a basket of global stablecoins. His vision for Borderless.xyz is rooted in solving the pain points of cross-border banking, especially in markets where access to dollars is limited.

Prior to Borderless, Kevin worked in healthcare fintech and later led product and engineering teams at regulated US custodians. He brings a unique blend of technical, regulatory, and product expertise to the stablecoin space. With legal leadership on the founding team and a compliance-first strategy, Borderless.xyz offers businesses a frictionless way to move money globally—without holding or touching user funds.

Kevin’s passion for decentralized finance is grounded in lived experience—from having his own Bitcoin transaction blocked by a bank, to navigating the challenges of crypto regulation during Operation Choke Point. Today, he’s leading the charge to make global finance faster, fairer, and truly borderless.

Episode Transcript

Kevin Lehtiniitty: If you extrapolate this to the extreme end of the bell curve, great people citizens are saving in dollars and spending in dollars. That means they’re not spending in the local currency. Right. And if that happens over the next 20 years, is the government just going to sit there and say, okay, our currency is now useless. No one uses it because everybody uses dollars? No. That’s a tremendous weakening of especially more authoritarian governments, their power and their control over the citizenship population.

 Kevin Rosenquist: Hey there. Welcome to Pay Pod, where we bring you conversations with the trailblazers shaping the future of payments and fintech. My name is Kevin Rosenqvist. Thanks for listening. In today’s world, moving money across borders is still slow, expensive and filled with hurdles, especially for businesses trying to navigate international payments. But what if there was a way to bypass traditional banking roadblocks entirely? My guest today, Kevin Lehtiniitty, CEO of  Borderless.xyz, is on a mission to do just that.  Borderless.xyz is building the largest stablecoin powered payment network, making it easier, faster and cheaper to send money worldwide. In this episode, Kevin shares how a frustrating experience with a bank rejecting his Bitcoin purchase turned him into a passionate advocate for blockchain technology. We dive deep into why stablecoins are reshaping finance, how  Borderless.xyz is orchestrating a new kind of global banking network, and the larger implications of financial freedom and inclusion. If you want an honest and straightforward discussion on digital finance, this episode is for you. So please welcome Kevin Lehtiniitty. So what initially drew you to the crypto space?

Kevin Lehtiniitty: Oh, that’s an excellent question and a good time to reminisce a little bit. I think I first got into Bitcoin in 2014.

 Kevin Rosenquist: Oh wow okay. You’re in there early.

Kevin Lehtiniitty: Well that depends on the circles you run in.

 Kevin Rosenquist: That’s true.

Kevin Lehtiniitty: I either get one of two extremes. It’s either like oh wow, you were extremely early or it’s like, wow, it took you that long. And then you.

Kevin Lehtiniitty: Talking.

Kevin Lehtiniitty: Um, that’s kind of, that’s when I ran into the, uh, the Bitcoin white paper for the first time was in 2014. And I was really interested in the concept of what was described as peer to peer cash. Um, and the ability to transfer money without some sort of a centralized intermediary, like a bank or a Venmo or something of that nature. And I actually went and tried to buy Bitcoin in 2014. Um, and it was on Coinbase and I was trying to use my debit card and it, you know, wasn’t a big purchase. Like I want to buy like 100 bucks worth of Bitcoin and kind of see what this thing is and how it works. Um, and my bank actually rejected the transaction. And ironically, that made me such a bigger bitcoiner than I probably would have been had it been a smooth transaction to come to this realization of like, wait a minute, what do you mean? I can’t buy this thing that I want to buy with my money.

 Kevin Rosenquist: With my money that I earned.

Kevin Lehtiniitty: Like, I’ve worked hard for this money. I hold it in your bank, and now you’re telling me it wasn’t Coinbase blocking the transaction, right? It was the bank. And the bank was saying, no, we block all transactions to Coinbase. You can’t do this with your own money. It was like that was the eye opening moment that was, to me, the oh my God, this is why we need blockchain technology. Who is this random bank to tell me what I’m doing with 100 bucks worth of. Yeah, I’m not saying empty my account. I’m going to drain like you can’t argue there’s an AML risk. You can’t argue there’s a fraud risk. You can’t argue any of those things. It’s a $100 transaction. I can go to Best Buy and swipe my debit card for, you know, ten x that and have no issues. Right. But because this was Bitcoin, the bank considered it to be a bad activity. And then they were the one basically censoring my financial transaction. And that was the wildest moment. And then I got into crypto professionally in 2016 2017.and then I got into stablecoins in 2018, I helped launch the first US fully reserved stablecoin before circle’s Usdc. This was called true USD to USD. And then I helped launch a basket of such currencies. So true, GBP true, Euro true, CAD true. Aud. And that’s when I started really becoming a stablecoin maxi, in addition to kind of my original Bitcoin roots. As I started to see Bitcoin more as a store of value versus a mechanism with which to, you know, transact, which was the original thing that drew me to Bitcoin was kind of this ability to do global transactions. And I’m still a Bitcoin maxi at heart. I still think there’s a phenomenal value proposition for Bitcoin as an asset class. But I think today that value proposition is more around preservation of wealth and store of value. And it’s not around payments and kind of financial transactions. I think that has fallen into the stablecoin landscape. And that’s why I’m so bullish on stablecoins.

 Kevin Rosenquist: What were you doing before you moved your professional life to crypto?

Kevin Lehtiniitty: I was in healthcare fintech. Okay. And what I found was that I really loved the fintech aspect. That was my first kind of foray into fintech. I loved the fintech aspect, I loved payments, I loved budgeting, I loved, you know, building like cost analysis modules. We did that for basically large health systems. We would help with like predictive analytics around when certain equipment would break. So an MRI machine super expensive. If you have enough data, you can start to predict based on how much it has downtime. When is it going to have more downtime? What’s kind of the deterioration graph look like. And then you can kind of predict what’s the revenue impact of having the downtime from that MRI machine. And then you can project where is the right break even point for you to have the CapEx, where it actually makes sense to purchase a new machine versus having the old machine that’s breaking down a little bit versus breaking down more, breaking down more, breaking down more. And then we did things like large health system budgeting and cost accounting and things of that nature. And the healthcare aspect was just brutal. I talk about really regulated legacy technology as an engineer, you know, ridiculous technical constraints. This was, you know, 2014 and it was like, oh, we were a cloud based tool. And in 2014, health systems were like, I don’t know if we trust the cloud. In 2014, this is not in, you know, 2005, 2008. This is. And still it’s like, oh no, we have these like mainframes. It’s like what? What?

 Kevin Rosenquist: What is this? You know. And the bigger the industry, the harder it is to get them up to speed. I feel like a lot of times, you know.

Kevin Lehtiniitty: Honestly. And that was a little disheartening. It felt like you were, you know, you were playing with really old, outdated toys and you were bringing outdated technology to an outdated industry. And I wanted to be a lot more on the cutting edge from a technological front. And given that I liked the fintech aspect of what I was doing, I was kind of thinking to myself, okay, what is the most cutting edge technology version of fintech? And that’s where I kind of fell in love with the blockchain space.

 Kevin Rosenquist: I have a question I like to ask people that are bullish on crypto, bullish on Bitcoin, stablecoins, all that stuff. There’s a lot of really smart people in the finance world that I give the pleasure of talking to. And I always find it interesting how, you know, when it comes to crypto when it comes to Bitcoin there. So like you can have people that are so excited about it and people who think it’s the biggest fool’s gold in the world and think it’s total crap, just don’t think it’s worth anything. Why is there such a disparity between people who really know what they’re doing in this space, as far as how they view this, this currency?

Kevin Lehtiniitty: I think it depends on two things. The first and most obvious is probably the incentive systems. Generally, people that are getting disrupted by something aren’t bullish on the thing that’s disrupting them.

 Kevin Rosenquist: Good point.

Kevin Lehtiniitty: And then the other is the amount of exposure that you have to things. And the best analogy that I have for that are like the newspaper clippings, like the internet is a passing fad, experts say, right. And now clearly it’s not.

 Kevin Rosenquist: Right.

Kevin Lehtiniitty: And I think social media.

 Kevin Rosenquist: Same thing.

Kevin Lehtiniitty: Same thing. I think you need to have some level of exposure. And, you know, those that are highly bearish and have interacted with blockchain based systems, I think, are much more credible than those who are really bearish. And you’re like, great, well, you know, how much bitcoin do you own? Oh I don’t own any. Oh have you ever tried to use a stablecoin to do a cross-border transfer. Oh no I haven’t. I don’t even know how to set up a wallet. Like okay your opinion at least to me, is much, much less credible when you haven’t even tried to interact with the system.

 Kevin Rosenquist: Yeah. When you don’t necessarily know the workings of how of how it you know, how it operates. Yeah, that makes sense.

Kevin Lehtiniitty: Exactly. It’s like if, if I, you know, if we were talking about, um, planes as an example and I was like, oh, Kevin, I would never own a Gulfstream. You’d be like, well, Kevin, do you own a plane? The answer is not I cannot afford it. Right. It’s like it’s like, okay then then why do you have, you know, how are you credibly having this opinion. Right. Or it’s like, oh man, I would I would never in my life drive a Lamborghini. And it’s like, oh, have you driven a Lamborghini ever? No. Like, okay then how are you giving this opinion about, you know, this kind of a thing? Those are kind of the ways that I look at it. And, you know, from an engineering standpoint, when I really think about where do I want to spend the next 5 or 10 years of my life? I want to spend my time where other smart people are spending their time. And if you look at where the best engineers in the world are dedicating their lives and their time, it’s one of two places. It’s on blockchain and it’s on AI.

 Kevin Rosenquist: Ai.

Kevin Lehtiniitty: Those are the only two places the world’s smartest engineers are in mass flocking to.

 Kevin Rosenquist: Yeah, I’ve actually talked to people on this show that are in like places like cybersecurity and places like that, and they can’t get talent to come to them because all the big talent is going to those two places.

Kevin Lehtiniitty: So, you know, at some level, and maybe this is an overly simplistic model, but if you have a large mass and momentum of the world’s smartest, most talented people working on something, I’m extremely bullish on what that thing is, right? And I think there’s a high likelihood that that group of people will figure out the ways of doing those things responsibly. And I think we’re starting to see that now. Right? Especially from a US centric viewpoint. If you compare the policies of the current administration versus the policies of the past administration. It’s no longer an engineering problem, right? We’ve shown that as an industry, we can actually influence regulatory policy in a major way. And that’s been one of the biggest hurdles to adoption has been great. You know, technology is a solvable problem. The business value is a very solvable problem. Going to market with this new technology is a very solvable problem. But the thing you can’t solve is the governmental regulatory layer. And now we’ve just shown that actually we can highly influence the government regulatory layers. And that just makes me more bullish.

 Kevin Rosenquist: All right. Well let’s start with uh you know talking about stablecoins is like at their basic level. Like how they function and what is their significance in today’s financial ecosystem.

Kevin Lehtiniitty: I have a potentially spicy view here that I think is really important.

 Kevin Rosenquist: I like it.

Kevin Lehtiniitty: And, you know, a lot of people categorize stablecoins into two buckets, kind of fully reserved stablecoins. We’re talking about Usdc, USDt, Usdm kind of things of that nature and algorithmic stablecoins. So the dais of the world, what you know, the Terra Luna stablecoins were doing and others. I do not believe that an algorithmic stablecoin should be qualified as a stablecoin in my mind. A stablecoin is a very simple thing. A stablecoin is a tokenized representation of a fiat currency. It could be dollars, it could be euros, it could be something else. And for it to be a real world asset or a tokenization of that fiat currency, it needs to be fully reserved by that fiat currency. It needs to be backed one for one by cash and cash equivalents in whatever you’re tokenizing dollars, euros, GBP, CAD, AUD, etc.. I do think there is a time and a place for these algorithmic tokens, but I think calling them stablecoins is inherently doing a disservice to the market and is inherently wrong. If you were to think about what the non-blockchain analog of an algorithmic stablecoin is. It’s a structured financial product. It’s not a currency. No one would look at that off of a blockchain and say, yes, this is US dollars. They would say, no. You’ve created a structured product. And structured products are all over the finance world. They’re fine. They’re massively used. But I think they should be called tokenized financial products and not algorithmic stablecoins. I take issue to calling them stablecoins.

 Kevin Rosenquist: Okay, yeah, that makes a lot of sense. I mean, it’s pretty simple when you really think about it. If you just use your definition of what a stablecoin should be, it’s a digital version of a fiat currency, which makes a lot of sense. So. So let me. Okay. So let me see here. All right, I’m going to talk. Let’s talk about a  Borderless.xyz. So if a company in the US wants to pay a freelancer in say Argentina, they might run into high fees, slow transfers, exchange rate issues. So instead of using a traditional bank,  Borderless.xyz will help convert the payment into a stablecoin, transfer it instantly to that freelancer, and then convert it into their local currency on the other end. Do I have that right?

Kevin Lehtiniitty: That’s the high level. Okay, so the way that this works, which is a little bit unique, and what I feel really strongly is kind of the unique approach that we’re bringing to the market is  Borderless.xyz, is the biggest stablecoin orchestration network. And that’s a bit of a mouthful. Um, so what I mean by an orchestration network is that  Borderless.xyz by itself is not a licensed financial institution. What we’ve done is we’ve looked at the state of the market and we’ve said, okay, there’s a tremendous amount of players that are providing liquidity and local rails between stablecoins and bank accounts in many different geographies. You have bridge that got acquired by stripe here in the US. You have Bank and the EU. You have yellow card, in Africa you have bitso in some parts of Latin America and the list goes on and on, right? I could somewhere in my hard drive, dig up a file that has a map that has like 100 of these, you know, stablecoins. And when we think about what chain banking look like, we think that these entities are basically the next version of banks.

 Kevin Rosenquist: Okay.

Kevin Lehtiniitty: And what’s missing is a network that brings all of these banks together into a single place. So if you’re a financial institution, if you’re a payments company, if you’re a fintech, if you’re a large corporation, you are transacting globally. And there doesn’t exist yet a global network of these financial institutions that you can use as a single counterparty. You have to go and say, great, I’m going to create relationships with ten different companies and countries around the world. I’m going to go and I’m going to reconcile all these different bank accounts. I’m going to go through compliance processes with all these different places, and I have to basically build my own network, right. If I have money in JPMorgan Chase and I say, great, I need to pay our vendor in Germany, I don’t need to call up a German bank, go through a contract signing process, create a partnership. Right? I can say, hey, JPMorgan Chase, go send this to the bank in Germany, right. And that exists because there’s lots of traditional payments networks and the card rules. We have visa, we have Mastercard, we have American Express, etc. and the banking real world. We have like Swift and those sorts of networks. And that doesn’t exist yet in the stablecoin world. And that’s what we’ve built at  Borderless.xyz. So a company can come to  Borderless.xyz and they can say, hey, I need to move money from here to here. And  Borderless.xyz, through its network of financial institutions, will orchestrate that transfer end to end. Right. It’ll handle the compliance parts, it’ll handle travel rule compliance, it’ll handle the liquidity between the fiat currencies and the stablecoins. It’ll handle the local rails. So what we say is that we basically have a network of local rails all over the world that power stablecoin money movement companies. But the really important part is we do that by having this network of financial institutions. We ourselves are not directly competitive with someone like a bridge. Bridge is actually a member on the  Borderless.xyz network, right? We’re that connective tissue that brings all these things together in one place.

 Kevin Rosenquist: Okay. All right. Yeah, that’s a good description you’ve given. You’ve done this before. I can tell.

Kevin Lehtiniitty: Only every day.

 Kevin Rosenquist: Only every day. You talked a little bit about the regulatory aspect of things. How does  Borderless.xyz ensure compliance across these diverse jurisdictions? I mean, that’s a big job. But you also are facilitating decentralized finance. So like how do you balance that?

Kevin Lehtiniitty: The short answer, which is a bit cheeky, is very carefully. The long answer is much more interesting. And we can jump into it. Um, one of the things that I’m very, very proud of is I think we’re one of the very few kind of blockchain native companies with legal and regulatory representation on the founding team. Um, so our GC, George, has been here from day one. Um, my background is obviously from an engineering standpoint, but it’s not, you know, three, four engineers and a hacker house that are shipping product without any consideration for compliance, for fraud, for regulatory implications, things of that nature. Before  Borderless.xyz, I led the product teams and the technical teams at two regulated US custodians. So I come from the regulated world, and I wanted to bring that to everything that we do at  Borderless.xyz. So the way that things are currently structured, and that’s kind of the beauty of being the orchestration network is that  Borderless.xyz is actually not at all in the flow of funds. So if we were to take an example of a company that is repatriating funds from Brazil back to the US, and there’s a huge use case for stablecoins in doing that in a way that’s much faster and cheaper and has much less FX risk and things of that nature than doing it through traditional correspondent banking. That’s part of why we’re seeing so much stablecoin adoption in Latin America. The way that it would work is the transfer. The Brazilian piece would be done by a regulated Brazilian financial institution.

Kevin Lehtiniitty: The US piece would be done by a regulated US financial institution, and then the Brazilian financial institution on the  Borderless.xyz network actually settles directly to the US financial institution, on the  Borderless.xyz network. So  Borderless.xyz is fully non-custodial.  Borderless.xyz never touches the funds in any way, shape or form, never has control of the funds. It provides this network and this messaging layer and this communication layer, and this connectivity layer that orchestrates the settlements directly between financial institutions. So if someone’s coming to  Borderless.xyz, it’s a regulated entity in every step of the way. It’s like great. There’s a regulated financial institution in Brazil that takes, you know, BRL on whatever the local rail is, converts that into Usdc, sends that Usdc to a financial institution that’s regulated in the US that then converts it to USD, that then sends it out on Fedwire as an example. So it’s regulated entities in every step of the flow of funds. And I think that’s extremely important, um, in doing a couple of things. First, it’s really important from regulatory compliance standpoint obviously. But two it’s also really important from a counterparty risk standpoint. I think one of the things we haven’t tackled yet as a stablecoin industry is really defining, quantifying and articulating what is the counterparty risk of using a stablecoin based transmission, and how does that counterparty risk differ from using correspondent banking and kind of traditional rails? And until we can really articulate and define that, it’s going to be really difficult to get larger enterprises and larger payments companies to move their infrastructure over to stablecoin rails.

 Kevin Rosenquist: Okay. And when it comes to, you know, maybe markets that have limited banking infrastructure, what’s your approach there? Does it do you. Do you struggle with certain smaller markets or are you able to to work with them as well?

Kevin Lehtiniitty: We generally do really well in these smaller markets, because part of the issue in these smaller markets is the lack of connectivity into established networks. And what’s really interesting about using a blockchain based network is that you have a network that is inherently directly connected, every participant on the network can directly settle to another participant in the network. Because we’ve agreed on the mechanism, we’ve agreed on the blockchain and we’ve agreed on a stablecoin to do that. In the traditional world, that doesn’t exist. And that’s where you have the whole concept of correspondent banking and intermediary banks and all these different things, because you don’t have a directly connected graph, right? It may go from bank one to bank two, bank two to bank three, bank three to bank four, and then finally into your bank account, especially the more emerging the market and the less developed the banking infrastructure, the more financial intermediaries exist. There is massive use cases around these smaller and more emerging countries and saying, hey, as long as I can go between your currency and a stablecoin, I now have direct connectivity to the banking systems all over the world. That’s true. And that’s where we’re seeing a lot of these kind of locally licensed financial institutions start to pop up, or people that are locally licensed in Argentina, Brazil, Colombia, Nigeria, Ghana, South Africa, um, Um, and even even, you know, lots of larger places to UAE, US, EU, all of a sudden realizing, hey, especially through joining the  Borderless.xyz network, I don’t actually need to solve 100 of these different problems as long as I can provide a compliant licensed product in country A, I can then join the  Borderless.xyz network and get connectivity into regulated licensed counterparties in 50 other countries. And now all of a sudden, all I need to do is really own this particular piece. Well, and I can do compliant transfers to 50 countries around the world by just joining this network. And that’s been, I think, a big catalyst in driving the growth of stablecoin adoption.

 Kevin Rosenquist: Yeah, yeah for sure. I mean, the financial inclusion aspect of it is, is obviously, uh, it’s very intriguing from a, from a bigger picture view. What do you see as, as far as, like how digital currencies are going to evolve over the over the next, I don’t know, 3 to 5 years. I mean, you know, blockchain technology is something that some people are still scared of, or at least probably just don’t understand. Um, you know, I’ve talked to people on this show before about how, you know, one of the hard parts of getting people to adopt it is that they don’t understand it. But then some people say they don’t really need to understand it. We just need the technology needs to to make it easier for people to adopt digital currencies. Where do you sort of land on that and where do you see it going over the next five or so years?

Kevin Lehtiniitty: I think the US is a terrible viewpoint to have, and the reason I say that is that as people who live in the US and I don’t know where the audience is, is for this, I assume it’s more global, but especially.

 Kevin Rosenquist: For it’s global. But I would say probably primarily us. Sure.

Kevin Lehtiniitty: For for us people. Um, and I’m originally French. Um, but I think the same argument applies for most of the EU. The EU is not an emerging market either. Um, living in the US, we have direct access to the world’s global currency, right? That the vast majority of global trade financing is denominated in. Um, that is not the case anywhere else in the world, right? That is especially not the case in emerging markets. Um, we talk about the inflation under the previous administration as an example. And it’s a phenomenal thing to talk about. Right. It’s been historically much higher than other times in the US. But even that conversation is a drop in the bucket compared to Argentina’s and other countries in the world. And when you live in these other markets, you have such a high pain that’s coming from your local currency that you’re looking for other ways and new technologies to adopt in order to mitigate that pain. When we live in the US, that pain is completely nonexistent, right? We take the fact that we interact in dollars, we save in dollars. Our banks are dominating dollars. We take that 100% for granted. Meanwhile, there’s people around the world that would kill for dollar based banking access. And I think this is one of the most interesting near-term versus long term use cases of stablecoins, where I’ve made a lot of arguments that stablecoins are actually should be massively supported by the government here in the US.

Kevin Lehtiniitty: And stablecoins are the best way for the US to export dollars globally. And we’re seeing that happen in emerging markets where there’s high inflation and there’s currency instability, where people are using stablecoins as a proxy to dollars. Right here I can go to Chase. I can open up a checking account. It takes me, I don’t know what, two, two minutes or I can do it online on one of 50 million neobanks. If I’m I’ll go back to Argentina. If I’m a guy living in Argentina and I call up Chase and I say, hey, I want a checking account, that doesn’t work, right. So stablecoins are becoming a proxy asset to dollars and dollar banking. And that’s kind of this dollarization narrative. And we’re seeing that start to happen. We’re starting to see neobanks like Lemon Cash and Chipper cash and others introduce wallets, crypto wallets and stablecoins as a way to introduce dollar accounts and dollarized savings. And with that, we’re now starting to see people pay for goods and services in US dollars instead of their local currency. Long term, I think that’s a much riskier narrative. I don’t imagine a world in which, especially some of these more authoritarian governments, are okay giving up control of their central bank currency. Yeah, a lot of people.

 Kevin Rosenquist: Depending on the country. Yeah, you’re right about that. Yeah.

Kevin Lehtiniitty: Comes from that. And if you extrapolate this, you know, to the extreme end of the bell curve, great people, citizens are saving in dollars and spending in dollars. That means they’re not spending in the local currency. Right. And if that happens over the next 20 years, is the government just going to sit there and say, okay, our currency is now useless. No one uses it because everybody uses dollars? No. That’s a tremendous weakening of especially more authoritarian governments, their power and their control over the citizenship population. So I think what happens is you end up having like forced conversion into things like CBDCs in those countries. Right. And you pass regulatory policy, which basically states that, hey, it’s illegal to hold a stablecoin that is not backed by that country’s, you know, particular currency. And you probably introduce things like Brazil has a fixed tax rate. Colombia, which I think is like 30 something basis points. Colombia has like a 60 basis points, um, government tax that’s levied. India, if you sell crypto is 100 basis points. Flat tax that is enforced at the exchange level every time you sell crypto, right? In the US we kind of take our free market for granted, right. Again, going back to a more global mindset, these things already exist on a daily basis. And I would imagine it’s great if you hold Usdc legally, you must convert it to the CBDC. And there is probably a 60 to 100 basis point tariff on the conversion into that local currency.

Kevin Lehtiniitty: See. And that’s going to create effectively a giant gray market or black market for dollarized savings. Right. Because this consumer use case of dollarization is not going to go away, but it’s going to be pushed to the gray markets and the black markets, which then becomes more interesting because then it can’t be serviced by regulated licensed entities because they’re going to have to play by the governmental rules. And it’s like in Argentina, you have, you know, the official bank FX rate, and then you have the blue dollar rate, which is the unofficial rate. If you’re doing a cash exchange at a, at a kind of physical place, and that exchange rate varies by 20%. I think we’re going to start to see the same things on the official stablecoin rates versus the I’m not really a regulated player, more peer to peer. You know, those are going to emerge with completely different markets. And that’s also, I think, where we’re going to see some differentiation between things like circle and things like tether, where tether is taking the highly regulated, regulatory compliant approach and is going to go into these official bank type models. And tether is going to be the king of these gray markets. Um, which honestly will probably do significantly more transaction volume than the, you know, official compliant regulated markets.

 Kevin Rosenquist: Yeah, definitely. Yeah. Especially in those authoritative countries, like, like you were mentioning. Yeah.

Kevin Lehtiniitty: And I don’t mean that in the terms of like a total dictatorship.

Kevin Lehtiniitty: I mean that in terms of like even India. Right? Like.

Kevin Lehtiniitty: And the government is a lot more involved in public goods in these countries. I think, again, taking a US centric approach, the US is more privatized than the vast majority of other countries, and we take that for granted and kind of apply that mental model to the rest of the world and the rest of the world. The countries are very involved in, you know, utilities, roads, healthcare, education, airlines train, you name it. If it’s kind of a publicly used thing, the government is highly involved in it and in the US like that would cause a revolt. Like, what do you mean? The government’s doing this thing. And in those countries, it’s completely accepted, right? I think that’s where you’re going to see in the US, there would be tremendous resistance to something like a CBDC. In these other countries where the government is already deeply involved in every aspect of someone’s life is going to be virtually no resistance to CBDCs. And there’s going to be forced adoption. They’re going to say, great, you’re a bank in my country. You’re supporting my CBDC, or you’re no longer a bank in my country, right? That’s just how it is.

 Kevin Rosenquist: And they’re like, okay, us standpoint.

Kevin Lehtiniitty: We don’t have that mindset. But that’s how so much of the rest of the world works.

 Kevin Rosenquist: You said something interesting earlier about when you first got into Bitcoin and how you couldn’t make your $100 purchase and it like kind of pissed you off and made you want to go, you know, do something about it. Being a disruptor in the financial space is not a small endeavor. What kind of lessons have you learned? What kind of you know, I don’t know what kind of what’s changed in your mindset from the time that you started this journey to now?

Kevin Lehtiniitty: I, um, I worked in regulated crypto custody through both Operation Choke Point one and Operation Choke Point two. That was very, very interesting. The amount of debanking that happened both to the regulated entity and also that was kind of forced for the regulated entity to de bank others is insane. It was a very, very commonplace thing. I think at one point we maintained about 10 or 12 different bank relationships, because every couple of weeks we would lose a bank relationship where people go, hey, we saw you’re in crypto-click. And that.

 Kevin Rosenquist: Really.

Kevin Lehtiniitty: Thankfully, it’s never happened to me on a personal level. I have a ton of friends that’s also happened to them personally where it’s like, hey, we’re closing your business account. And by the way, we’re also closing your personal account. You’re no longer welcome here. Um, and they’ve been driven to, you know, local credit unions and much smaller, much smaller banks because they’ve been blocked by, you know, back in the day, I think it was 20. I don’t know if I’m allowed to say this, but whatever. Um, I think it was 2018. Um, we got Debanked from US Bank and that was across the entire banking landscape. Right? So the demand deposit accounts on the fiat side were closed, and US Bank was also the custodian for like, the T-bills and all that stuff that were part of the cash. Everything was closed. Um, and it was like a 30 day notice. It’s like your accounts are closed. You have 30 days to withdraw your funds. Goodbye. Like, no. No dispute process, no resolution process. Nothing. It was you are in the blockchain space. And now with a lot of the stuff that’s coming out with the FOIA requests. Um, and this is part of what Senator Lummis has been holding hearings on now with the Senate subcommittee, um, is the instructions that were coming from the fed and from the OCC saying, banks, you must or strongly encouraged the same thing. Um, you know, to debunk your blockchain related customers. You cannot be engaged in this kind of business. And I mean, maybe back to the US versus global viewpoint in the US. This is a massive deal, right? The regulators cannot be doing these sorts of things. This is not the Senate hearings about it in the rest of the world. It’s like, yeah, the government decided banks shouldn’t do this. That’s how the government works. Like, what are you complaining about?

 Kevin Rosenquist: Right. Yeah, yeah. Wow. That’s interesting. That’s really interesting because I mean, do you think are there more you said that was 2018. Has that changed at all? Are there you know, could you don’t have to name another name? But like could you go to like maybe a larger bank that wouldn’t have allowed you, you know, six years ago, seven years ago.

Kevin Lehtiniitty: Oh, especially, um, you know, today it’s definitely changing. Um, before the election, you couldn’t go anywhere, right? It’s become pretty public at this point that, um, like Silvergate Bank and signature Bank were targeted by the regulators because of their involvement in crypto banking, and there was nothing actually financially insolvent about signature Bank when it was placed into receivership and the FDIC took over. The FDIC took down a publicly traded banking institution for no reason other than it was central to the crypto industry, and the crypto industry was deemed persona non grata by the administration. That is 100%. That’s no longer. That was my opinion a year ago. Now I can say that as 100% factual statement, given all the testimony that’s coming out and, and a lot of the kind of whistleblower reports.

 Kevin Rosenquist: Yeah. Well, it’s a fascinating space and, uh, yeah. Thank you very much for sitting down with me and talking this through Kevin. Kevin with, uh, with the company is, uh,  Borderless.xyz. Thanks so much for joining me.

Kevin Lehtiniitty: Thanks for having me, Kevin.