Taking stablecoins seriously, with Haseeb Qureshi

This is a transcript of a podcast where Patrick McKenzie interviewed a partner at a VC crypto fund. Here are some quotes I thought were interesting from the interview:

Haseeb: [...] probably the oldest very significant use case for crypto, is basically a way of facilitating capital flight. [Patrick notes: Not what I would have expected an advocate to lead with, and props for candor.]

So this is, you're a Chinese wealthy person, you're Russian, you're in Indonesia, you're in India, whatever, and you want to get out of your local currency. And these are all countries that have pretty restrictive capital controls.

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[P]eople use Tether or use USDC, but mostly Tether, as a way to get out of the local currency and get into dollars. And most of the time, this is illegal. They're doing this against the interests of the Chinese government. [...] On the one hand, we know that the Chinese government is trying to reduce their reliance on US treasuries. So the Chinese government was the largest seller of treasuries last year. I think they sold something on the order of like $40, $50 billion of treasuries.

At the same time, Tether was the seventh largest buyer of treasuries internationally, like relative to countries. And I think Tether bought something like $30 billion of treasuries while the Chinese government sold roughly 50 billion. ...

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Patrick McKenzie: [...] there's any number of people in the world that end up having a US bank account [...] because they spent some time in the US. We give out bank accounts to pretty much anybody here.

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[S]o the amount of like Zelle traffic in non-United States countries, particularly ones that have a liquid black or gray market for US dollars is very substantial. Not calling Zelle out specifically there. They were one that came to mind because they've been publicly reported. But one would assume that happens on almost all US-based payment systems. Anyhow, fun little fact about the world.

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Haseeb: [...] where were stablecoins being used first in these kind of international B2B payments? The first place was actually in the Russia-China corridor. And this was because Russia got hit with sanctions [...]

Haseeb: [...] But increasingly, you're starting to see all sorts of businesses around the world that actually can get euro-dollar banking or even US dollar banking start to be using stablecoins for payments and settlements.