How Stablecoins Will Reshape Financial Services

Jim Marous (00:11):

From Walmart and Amazon, to banks and credit unions, stablecoins are accelerating a banking reset that is already reshaping how payments move. I know in my experience, as I talk to financial institutions, more and more are putting it within their internal systems without really knowing what they're going to do with this.

Jim Marous (00:32):

In this episode of Banking Transformed, I'm joined by Dr. Lamont Black, Associate Professor of Finance at DePaul University. We're going to break down why stablecoins represent a fundamental shift in financial infrastructure, not just another crypto cycle.

Jim Marous (00:47):

We're also going to explore how emerging payment rails challenge traditional card networks and what this means for deposit, data, interchange revenue, and products overall. And how financial institutions of all sizes need to prepare for what's going to come next.

Jim Marous (01:06):

This conversation is essential listening for banking executives, payment leaders, and fintech professionals who want to understand the real impact of stablecoins, the strategic risks of waiting, and how the banking reset is already unfolding. So, Dr. Black, really good to have you on the show.

Jim Marous (01:26):

We were at the same event a few months ago, and you really did a great job of presenting a look at not just stablecoin, but crypto, AI and how all these powers are really working together to change the banking ecosystem.

Jim Marous (01:42):

Before we start, can you talk a little bit about your background and a little bit about how you work with the financial services industry today?

Dr. Lamont Black (01:49):

Yeah, thanks, Jim. It's great to be here. So, I'm at DePaul University here in Chicago, like you said. Prior to this, I was an economist with the Federal Reserve in Washington, DC. So, was there for about eight years through the financial crisis. Moved here in 2013 to teach money and banking.

Dr. Lamont Black (02:07):

So, I spent a lot of time with college students around this stuff, and I like to say that it was my students who got me into crypto. They were the ones who kept asking me about Bitcoin. And so, I would say around 2017 was when I really took a deep dive into this space. And yeah, it's changed a lot over the last 9 or 10 years.

Dr. Lamont Black (02:28):

And over the last few years, I've been doing a lot more speaking and consulting with financial institutions around crypto and AI and stablecoins in particular. So, with the GENIUS Act, I think that's really accelerated these discussions, and I think everyone's trying to figure out what this means for the future of payments and the future of money.

Jim Marous (02:52):

So, it's interesting, you mentioned the GENIUS Act, and it was passed in July of 2025. And most banking executives I talk to still don't have a stablecoin strategy, but they're making sure they have a place for it on their back-office ecosystem. What specific operational capabilities should a bank or credit union have built by the end of 2026 to remain competitive?

Dr. Lamont Black (03:18):

Yeah, well, with the Genius Act, we now have this timeline where the rule-making has got to be done by July of this year, 2026. And implementation will be at the end of the year. So, I do think this is the year to pivot and prepare. I don't think anyone needs to rush out of the gate. There are some credit unions and banks that have even issued their own stablecoins at this point.

Dr. Lamont Black (03:42):

I'm not necessarily recommending that for most smaller institutions. But if people are familiar with the concept of crypto wallets. So, think of stablecoin as the technology of crypto with the value of the dollar. And so, those tokens ultimately live on a blockchain, and a crypto wallet is how you manage an address on a blockchain.

Dr. Lamont Black (04:05):

And so, I would encourage credit unions, banks, to start exploring these types of tools because historically, they've managed their member and customer money using their core systems. This is going to be using a shared or distributed ledger.

Dr. Lamont Black (04:21):

And so, figuring out how those two ledgers can communicate with one another, their internal general ledger and this distributed blockchain ledger. And a crypto wallet is a great way to start building that interface.

Jim Marous (04:34):

Probably around four years ago, there was this back and forth on whether or not a financial institution needs to include crypto as part of their payment rails. And a lot of organizations got into it and out of it, and got into it again.

Jim Marous (04:50):

Why do you see this moment with stablecoins being actually more of a true banking reset rather than just another toe-in-the-water experiment?

Dr. Lamont Black (04:59):

Yeah, I was very active in those trends three to four years ago. And like you said, it was really about crypto, which I would say at that time, primarily about Bitcoin. There were a number of institutions that were looking at Coinbase and other crypto exchanges.

Dr. Lamont Black (05:15):

They were seeing those transactions in their ACH logs of members and customers sending money to these crypto exchanges to buy crypto. And so, the play at the time that some of them considered was, could we internalize this? Could we offer Bitcoin directly to our members? Try and create that closed loop.

Dr. Lamont Black (05:34):

So, its deposits moving in and out of these crypto accounts. NYDIG was one of the fintechs that was a big provider at that time. And that ultimately, did not go so well. A lot of that picked up at the very end of the crypto bull cycle.

Dr. Lamont Black (05:51):

2022 is when crypto prices started coming down, and then we had FTX, and a lot of people just backed out of the space. Ultimately, I wasn't super optimistic about that to begin with, because most financial institutions are not in the business of asset management.

Dr. Lamont Black (06:11):

They might have a wealth management division, but a lot of times that's outsourced through some third party like LPL. And so, it was never (I would consider) their core value proposition. What I love about stablecoins as this new trend is this is much closer to the actual functioning of a community of regional financial institutions.

Dr. Lamont Black (06:33):

So, think about payments, think about deposits, the ability to store and transfer value. That's core to what financial institutions should be doing. And I think stablecoins could disrupt or upend a lot of those current systems in a really beneficial way. Because I think this is better technology. And so, I want to encourage these institutions to start understanding it so that they can pivot and prepare.

Jim Marous (06:59):

So, you write a lot about stablecoin and innovation with filing, a lot for the credit union organizations. Where do stablecoins fall with regard to simply being an innovation, to being a real core infrastructure play?

Dr. Lamont Black (07:17):

Yeah, I think that's still a debate. I gave a stablecoin presentation for 60 CEOs on Friday, primarily credit unions. And I had them do tabletop discussions there in the room. And the first question was, is this going to be a significant disruption?

Dr. Lamont Black (07:37):

And there was a pretty even split, I would say, in the room of those who see this as a curiosity, but they're just going to wait and see if this gains traction, and about the other 50% saying, “Hey, this is here. Things are moving very quickly, we need to get on the train.”

Dr. Lamont Black (07:56):

So, no one has a crystal ball. I personally believe that this is going to be transformative. So, if you think about traditional payment systems today, whether that's ACH, card networks, wires internationally, like with Swift, all of those systems date back to the 70s and 80s.

Dr. Lamont Black (08:16):

And so, they're stable, and they have functioned very well, and they've served their purpose. But they are not using this frontier better technology. And a blockchain, I know people have wrestled with the use cases, is this really ever going to take hold?

Dr. Lamont Black (08:33):

Transferring value on the internet is really how it was designed from day one. And that's where I think stablecoins have that crypto use case where this could become the killer app for blockchain as we move into this next year or two.

Jim Marous (08:51):

So, that being said, with any payment ecosystem, there's multiple players. Obviously, financial institutions within financial institutions and between financial institutions. There's the merchant marketplace (the place where we buy things), and then there's the consumer.

Jim Marous (09:11):

What part of that ecosystem has to really have a high level of acceptance for stablecoin to become more than just a novelty?

Dr. Lamont Black (09:20):

Yeah, this is where a lot of the CEOs would say, “Well, when I talk to my members or customers, I'm not hearing much demand for this.” I don't think this is going to start as a consumer-driven demand cycle. I think it's going to start more on the merchant side.

Dr. Lamont Black (09:36):

If you think about merchant processing fees through the card networks, some of the larger retailers are already saying that they're going to issue their own stablecoin as a way to sidestep those card networks and those processing fees.

Dr. Lamont Black (09:51):

So, to the extent that they start incentivizing stablecoins as an alternative payment rail, giving their consumers an option and getting them to shift in that direction like an Amazon or Walmart, I think then the consumer demand will come around. So, if you think about card versus cash today, cash is very inconvenient.

Dr. Lamont Black (10:14):

And so, people are willing to pay that 3% for electronic payments. But if we have a digital form of cash, which is what stablecoins are, then that convenience factor goes away, and it's just going to be a pure price comparison.

Dr. Lamont Black (10:31):

So, stablecoins are not going to have a zero-transaction fee, but I would anticipate it being closer to 1%. And I think ultimately, that pricing differential is where we're going to see the shift in demand.

Jim Marous (10:44):

So, actually, what you see is the merchant actually driving the consumer's change in behavior, maybe through discounts or maybe through rewards or something like that. So, walk me through a real scenario.

Jim Marous (10:56):

I'm a consumer at, let's say, a Walmart checkout or at Amazon at the point where I'm about to push the button. What would happen differently in my payments experience versus me using my debit card today?

Dr. Lamont Black (11:08):

Yeah, well, I'll give you a first example, and then we'll take it from there. So, for instance, if you think about e-commerce, and Amazon is a great example of this. In the 1990s, it was PayPal that really introduced the idea of spending money on the internet using a credit card, the PayPal checkout.

Dr. Lamont Black (11:28):

What people have not fully acknowledged yet is that PayPal now has their own stablecoin, PYUSD. They are embedding that directly into PayPal checkout. So, more and more as people are shopping on Amazon, maybe using a PayPal checkout, I think they will start considering these stablecoins as an option, especially if there is any type of discount offered on that.

Dr. Lamont Black (11:55):

And as I said, the Genius Act opens the possibility for non-financial issuers of stablecoins. And so, I think Amazon likely issuing its own coin.

Dr. Lamont Black (12:07):

What I would anticipate is something almost like a gift card where there would likely be some type of ACH transaction where they would move some of their funds over into the coin. Kind of like a little liquidity pool that they can then spin as those needs come up. They want to buy something with the click of the button.

Dr. Lamont Black (12:30):

So, it's just sort of shifting that real-time transaction away from using my card to using a coin. The question is, how do you fund the coin? So, there will likely still be some sort of transaction prior to that. But the beauty of a stablecoin is that it is redeemable for cash.

Dr. Lamont Black (12:51):

And so, unlike gift cards, where it's sort of more of a one-way street, I think this creates that two-way flow where we're going to see a lot more of what I would call sweep accounts, moving in and out of a checking account into a stablecoin account so that it's ready and accessible when they need it.

Jim Marous (13:09):

So, it's interesting. So, as I relate to this and draw a comparison to instant payments, it's one of these things that it may take a while for it to gain momentum. But the momentum could ramp up very quickly if the consumer starts to understand the benefits, understands the whole rail system. But so much of this, the back-office rails are going to look similar to what they are today.

Jim Marous (13:35):

And it's by the name “stablecoin” compared to crypto, as long as people don't misinterpret what these mean and the fact that it's just a digital payment mechanism, it all makes sense. So, when you look at the payment system overall, what part of the value chain is the most vulnerable as stablecoins mature?

Dr. Lamont Black (13:56):

Yeah, my focus has been on the card networks. I think some of them are not huge fans of the comments that I've been making, but I think this could totally upend the interchange fees for these financial institutions. So, if you think about issuing banks, processing banks, merchant banks, there are a lot of benefits that have been provided over the years.

Dr. Lamont Black (14:19):

Fraud, chargebacks, they certainly have the reasons for that 3% surcharge. But the beauty of blockchain in my mind is that instead of just communicating between ledgers, we now have a shared ledger.

Dr. Lamont Black (14:36):

So, the card networks, Swift, ACH, all of them are really just messaging systems for communicating between these core systems. And that's why we have so much settlement, clearing, and reconciliation. There's a lengthy process to make sure everything lines up at the end of the day.

Dr. Lamont Black (14:56):

And the beauty of blockchain is because we have this consensus mechanism where we can now agree on these transactions that are being added to the shared ledger, that's where you get the efficiency play.

Dr. Lamont Black (15:08):

So, I would encourage every financial institution to be asking themselves, “Hey, if this starts to create an alternative (let's put it that way) to the card network, what might that mean for that institution?”

Dr. Lamont Black (15:26):

So, one example I've used with some of my clients is think about Amazon Prime Day. Look at your transaction records to see how many of your members or customers are using your card on Prime Day. How much interchange fees are you collecting from that big sales cycle from the Amazon side? It's not going to sink the institution, but it is significant or material for many of them.

Dr. Lamont Black (15:52):

And if that number starts going to zero and their members or customers start transitioning towards Amazon Coin away from using the issuer card, that's going to have some material impact. And so, just starting to think through that as a scenario.

Dr. Lamont Black (16:09):

And then as you started this session, thinking about what is our strategy to try and future-proof ourselves so that we're not trying to play catch-up or defense in 2027 or 2028. The more you can get ahead of this, the better prepared you are for that strategic risk.

Jim Marous (16:28):

So, that said (and I know you talked to a lot of credit unions in smaller community banks), when you talk about the interchange revenue threat, if I'm a community bank with $2 billion in assets (on a percentage basis, I know you can't come up with an exact number), what do you think the risk level is? I mean, how much of the interchange could get lost in what I'm going to call the near term?

Jim Marous (16:51):

And that's nebulous in its own terminology, but what kind of impact are we talking about? Are we talking about going to zero interchange? Are we talking about 50% of the interchange? What level do you, in your gut, feel this is really viable, and I feel pretty comfortable in saying this could be your level of risk?

Dr. Lamont Black (17:12):

Yeah. It's really about the timeline and when this shift happens. So, I would say it's not going to be primarily 2026, it's going to be 2027 once the GENIUS Act goes into effect. And it's not going to be overnight. It could be 5, 10, 20% in 2027. But even that, I would say, is significant.

Dr. Lamont Black (17:36):

And then I think with a lot of technology adoption, it's not linear. It is exponential. So, it tends to start slow. And then once it catches on, that's when you get that hockey stick effect. Think about Apple Pay and Samsung Pay.

Dr. Lamont Black (17:51):

When those were rolled out, no one was like, “Oh, this is going to replace everything.” It's just that people have to get comfortable with it. They have to trust it. And stablecoins are going to be new. People aren't going to be sure about this.

Dr. Lamont Black (18:03):

And so, yeah, I don't think this is a looming cliff. It's more something that is going to ramp up very quickly. And so, when I think about institutions preparing for that, I like to use the analogy of surfing of like, “Hey, there is a wave coming,” and you want to just position yourself so that as it starts building, you're ready to ride that wave, and it's not just crashing over your head.

Dr. Lamont Black (18:30):

Part of that analogy too is there is both risk and opportunity. Some of these executives I'm talking to, they're like, “Hey, what is the upside here? All I'm seeing is the downside.” And if you think about this as non-interest income, some of that is going to go away.

Dr. Lamont Black (18:50):

Interchange fees have been a cash cow for these institutions for decades now, but in my mind, it's like what are those services that they are going to offer on the stablecoin networks, whether that's chargebacks or other types of features that you want to build that trust into this new payment rail so that your members and customers stay with you rather than going to some third-party fintech provider?

Jim Marous (19:18):

That’s interesting, the revenue side of that. But also, how can it be built into other products such as loan products and other products as well? It's going to be interesting because I think to your point (I'll take the surfing analogy as well), if you haven't even bought a surfboard, you are not going to be prepared for when that wave comes.

Jim Marous (19:38):

If you have not practiced the bit and got a sense for the water and gotten on the board a couple times, maybe without a wave, you won't be prepared for when the wave comes. And I think we're seeing this.

Jim Marous (19:48):

And I'm going to keep on referring back to instant payments and the overall scenario that happened there that it was nothing, then it was something, and now people are asking for it. And understanding how it can change their daily flow of funds, and it's a big deal.

Jim Marous (20:08):

When you're looking at this, I would imagine that the biggest mistake a banking leader could make is doing nothing then. Correct?

Dr. Lamont Black (20:15):

I would think of it as like hedging. We tend to think of hedging as it relates to the financial risk. Hedging also applies to strategic risk. No one knows whether this is going to take off. I could be wrong, maybe it's not as big as I think it's going to be, but you just don't want to be fully exposed in a wait-and-see mode.

Dr. Lamont Black (20:37):

To your point, buy the surfboard, get in the water, start feeling it out, and then if it doesn't materialize, then maybe you lost some money on that investment, but you didn't end up with that big downside risk.

Dr. Lamont Black (20:53):

And so, it's dipping the toes in the water. Giving some of that initial work in in 2026. One thing with the GENIUS Act is I think it gives a fairly clear timeline. So, now, we know this is going to move faster than it would have otherwise. So, stablecoins, I've been talking to credit unions about stablecoins for four years now. Everybody was like, “Oh, Dr. Black. That's nice. Very interesting.”

Dr. Lamont Black (21:20):

It was kind of like a curiosity. A lot of it was just like board education. That was a three-to-five-year timeline. Now, we're talking about a one-to-two-year timeline. So, this is the year 2026 to do some of that prep work.

Jim Marous (21:35):

That's very insightful because when you look at this overall, it's the reality of the situation, and we're talking about different demographic groups, but when you look at the people that have completely accepted Venmo, that have completely accepted PayPal, which have completely accepted digital payments at Amazon and everywhere else, the reality is the movement from where we are today to stablecoins is not that big of a gap anymore.

Jim Marous (22:03):

We’re there. We kind of understand how it'll work without having to understand the exact way it works in the background. But institutions also are looking at should they issue stablecoins as opposed to simply enabling them as part of the broader ecosystem.

Jim Marous (22:19):

What's your thoughts on that? Is it totally based on asset size? Is it based on priorities? Is it something that organizations should think about or should completely ignore?

Dr. Lamont Black (22:29):

Well, I think it really comes down to their unique situation and how they envision this being used. So, it is not difficult to issue a stablecoin. A stablecoin is really just a smart contract that sits on a blockchain and issues these fungible tokens. So, you can set that up relatively quickly.

Dr. Lamont Black (22:47):

There's a number of partners out there that have already started doing this. But the question I always ask is like, “Okay, if it's a credit union and they're issuing a stablecoin, where are their members going to use this stablecoin?”

Dr. Lamont Black (23:00):

Because stablecoins only have value if you can spend them or transfer them. Especially for a US citizen who has full deposit insurance on a checking account, there's no store of value benefit here in the US. It's really that medium of exchange benefit.

Dr. Lamont Black (23:19):

So, only to the extent that you're going to use it for a peer-to-peer transfer or a merchant point of sale. These are the types of use cases that they want to be exploring. And I just don't see that as being the sort of tip of the spear as it relates to these use cases.

Dr. Lamont Black (23:37):

So, for instance, with the credit unions, what I anticipate is going to be some credit union industry stablecoin. Something that would be focused on this industry, their unique needs and interests. Something that would have a little bit of branding associated with the credit union movement. But it would be more collaborative.

Dr. Lamont Black (23:57):

And it would be more something that would be offered across these institutions. So, I think we're likely going to see that even in 2026 as more and more proposals for a credit union stablecoin. And so, coming back to your question about experimentation, I feel like some institutions feel like issuance is the way to experiment.

Dr. Lamont Black (24:21):

But I would say the wallet is a better way to experiment because there's a lot of existing stablecoins, like USDC, which is the leading stablecoin here in the US. You should be thinking about how do my members and customers interact with USDC.

Dr. Lamont Black (24:36):

Because today, they're probably transferring deposits into Coinbase and buying USDC on Coinbase. If you want to offer that directly, how do you do that? And if you ideally have a mobile app, at some point, I would envision their share account that shows some dollar amount, and then a stablecoin account that shows some dollar amount side by side.

Dr. Lamont Black (25:00):

And then it becomes seamless for the member or customer to access those funds and move them back and forth. The whole purpose of a stablecoin is one token equals $1. So, they should be roughly ambivalent between those two. So, it really becomes, where can I use it and when is this a more efficient method of payment?

Jim Marous (25:21):

Let's take a short break here and recognize the sponsor of this podcast.

[Music playing]

Jim Marous (25:29):

It's interesting, stablecoins and any payment mechanism, it gets down to are you going to have the payment rails to actually get the transaction data and customer insight?

Jim Marous (25:41):

We talk about personalization, all this, but one of the missing parts about this is not just the loss of interchange but the potential of losing transaction data and customer insight. Which makes it even harder for a traditional financial institution to build relationships. You don't know how the consumer is using their data.

Jim Marous (25:59):

I know that in my small business account, my financial institution has no idea what I buy or what I sell on an ongoing basis because it's all done through PayPal. I pay all my contractors through PayPal, I get all my subscription data through PayPal.

Jim Marous (26:14):

And as a result, they simply get transaction data about what happens on PayPal but know nothing about the origin of what's being done. Is this a risk that's overstated, or is this really the biggest risk on top of interchange that's to be dealt with?

Dr. Lamont Black (26:31):

No, I think that's a great point because if you think about data equals insights, the better you understand your members or customers, the better you're going to be able to serve them.

Dr. Lamont Black (26:41):

Some of the credit unions that I work with are already using some type of third-party provider or QSO to manage even the card payments, sometimes they have a hard time getting that transaction-level data to understand who is the counterparty, who are the merchants? Should we be offering different types of incentives for members to make different types of transactions, and so on.

Dr. Lamont Black (27:04):

And this is going to shift that relationship even further. So, if you think about all the other trends out there, like embedded finance, banking as a service, I would also put on that list now agentic commerce. So, there's more and more discussion around agentic AI.

Dr. Lamont Black (27:22):

I think a lot of these financial institutions are still thinking of that as an internal efficiency. Kind of like robotic process automation. I don't think they have fully wrapped their heads around consumer agents, and how that's going to change the relationship with the primary financial institution.

Dr. Lamont Black (27:40):

Because if I'm looking for a loan and I'm using AI to do the shopping for me, now I'm not going to your website, I'm not even going to your app. All of this is going to be delegated to that agentic model doing that on my behalf.

Dr. Lamont Black (27:56):

And so, that's going to widen that gap between the provider and the consumer even further. And so, if you think about stablecoins and other things being part of this new model of microtransactions happening on the backend, then it's, “Do I really need you as an institution, or can I do this myself?”

Dr. Lamont Black (28:17):

And so, the more you can offer those services directly, lean into that trust factor – when I think about the comparative advantage of credit unions and community and regional banks, it is trust. It is that sense of “We know you, and we have your best interests at heart.”

Dr. Lamont Black (28:41):

It might sound a little squishy in this day and age of modern data analytics, but one of the risks of shifting into this embedded agentic-type finance is, how do I know the offers I'm getting really are the best offers?

Dr. Lamont Black (28:56):

Am I being guided or coached in a certain direction? And so, these institutions, they're standing saying, “Hey, we are on your side. We are aligned with you. Continue to work with us, and we will help you build that better future together.”

Jim Marous (29:13):

So, it's interesting. Financial institutions stand to lose interchange, stand to lose transactions, and customer insight data. The merchants tend to gain because they can lower their interchange even if they pay out some of it as an incentive for people to move to stablecoin.

Jim Marous (29:34):

So, when you look at the dynamics there – oh, and by the way, between the financial institutions, it's who's going to make the first move to get that transaction data? To get that maybe lower value interchange loss? Who's going to be the first mover?

Jim Marous (29:52):

Is it going to be a JPMorgan, a Bank of America, or a Wells Fargo? Is it going to be Walmart, Amazon, or Target? Or is it going to be a third party such as PayPal? Who's going to move the marketplace to really make this steamroll, this huge boulder that's waiting at the top of the hill to start moving?

Dr. Lamont Black (30:12):

Yeah, I think it probably starts with the large financial institutions like a JP Morgan. One thing I love about Jamie Diamond is he is all over the place with crypto and blockchain.

Jim Marous (30:24):

You follow his words that have been said over the years, and you go, “Man, this person's all over.” But you know what? He settles when he’s proven wrong is what he really does.

Dr. Lamont Black (30:32):

Yeah, yeah, yeah. And I think he is a good example of a finger to the wind, and he's going to follow whichever way it's blowing. And if people are backing up from crypto, he's going to back up. I think he sees the writing on the wall with stablecoins, he's leaning in.

Dr. Lamont Black (30:47):

So, I think we're going to see the big banks moving forward. I already mentioned PayPal is already moving in this direction with PYUSD. Stripe now has their own stablecoin. And so, all those kinds of fintech financial providers, I think are already moving into this space.

Dr. Lamont Black (31:05):

I think the ones like Amazon and Walmart, what's interesting is this traditional distinction between finance and commerce. I think this is going to blur that line even further. As you think about Walmart for decades has been appealing the FDIC to get a bank charter so that they could internalize these payments.

Dr. Lamont Black (31:27):

This is opening the door. You don't need a charter. Now you can offer payments directly through stablecoins. And so, I think they're going to be ready and waiting to take that step.

Dr. Lamont Black (31:39):

My concern is that all the action is going to happen with these larger players, and then the community regional institutions are going to be caught in the wake of that. And that's just the old playbook for technology adoption. So, it starts at large scale and trickles down to small scale.

Dr. Lamont Black (31:59):

So, one of my talking points with these institutions (and in particular my clients) is small is nimble. In the world of startups, innovation happens at the small scale, not at the big scale. But for some reason in finance, we tend to invert all that and say, “I’ve got to have a big shop and a big budget and all that.”

Dr. Lamont Black (32:20):

Again, stablecoins, the technology is not that complex. It is really you're using a public blockchain. You don't have to build your own blockchain. You're just building applications on an existing blockchain. So, it's the same dynamic with AI.

Dr. Lamont Black (32:36):

Just like JP Morgan isn't building their own large language model, they're just building applications on top of that. Stablecoins are an application of a public blockchain. And so, you don't have to be big to play in this space. I think that's one of the bells that I'm trying to ring out there.

Jim Marous (32:53):

Well, it's interesting because you've seen it over the last five years. I'm going to take the beginning of COVID about where it happened. Probably it was 2019, but the reality is third-party solution providers have gotten so good at knowing what their rails are. What they're good at.

Jim Marous (33:12):

Anything you want to do in the financial services business today, you can find a partner to actually collaborate with you and make it so you can play like the big guys. Really close to what the Chases can do, at least on the key elements the consumer is going to see.

Jim Marous (33:28):

Too many financial institutions spend a lot of time in the back office when really some of these front office things have to be looked at. So, you have organizations already that can help partner with you to get you into the stablecoin game before it even starts.

Jim Marous (33:45):

But let's say you're a credit union executive. You've already realized you're listening to Lamont Black, who says he got 18 months before you could be caught flat-footed or in a big wave without any idea of how to ride it as opposed to getting swallowed up by it. Give me the playbook.

Jim Marous (34:05):

You're a CEO of a credit union, you're listening to this podcast in the beginning of 2026, what are the three decisions you have to make now – not 18 months from now, not next year, that you have to make now to get ready to do what you need to do in the stablecoin area? Or do you have to do anything?

Dr. Lamont Black (34:25):

Yeah, I think that's a great question. And so, let me just put a quick plug in here. So, one of the products that we've now developed at my company, Wide Open Ventures, we call it Stablecoin Cohort, which is an opportunity for credit unions in particular. We've also opened it up to community banks to start partnering together on an exploration journey.

Dr. Lamont Black (34:47):

Because it's not just like go it alone, it's also not directly jumping into a partnership. I fully agree with you that partnerships are important. One of my concerns is that some of the fintechs are now seeing that fear that's in the blood in the water, and they're saying, “Hey, there's this big risk. If you don't partner with us, you're going to get left behind.”

Dr. Lamont Black (35:09):

And so, then the credit union or bank jumps to implementation without thinking through these key decision points like you were just mentioning. So, our Stablecoin Cohort is a three-month process. It's education, strategy, and then thinking about execution.

Dr. Lamont Black (35:25):

When I think about that roadmap for a CEO or other executive, I think the education piece is critical. That's at the board level. It’s also at the executive level. You don't want to just think of this as, “Hey, what do we need to do now?” That's more of a knee-jerk reaction.

Dr. Lamont Black (35:42):

Ideally, with those 18 months, it's a really slow, gradual buildup so that people are understanding what a stablecoin is, how it works, how it's different than traditional fiat payment rails. Then I would encourage organizational alignment.

Dr. Lamont Black (35:59):

And so, some of our clients are starting to develop an internal working group, thinking about who are those key internal stakeholders. Maybe somebody from payments, somebody from deposits, somebody from IT. Getting them familiar with this transition so that they become aware that this is rising as an alternative payment rail.

Dr. Lamont Black (36:21):

And then once you've kind of gone through some of those processes, then you can start thinking about those strategic decision points. We've talked about a couple of them. Do you issue or not? Do you facilitate or not?

Dr. Lamont Black (36:34):

So, the baseline strategy is we're going to just kind of circle the wagons, do our thing like we've always done it and just play defense. Again, that's one viable strategic option. I think that-

Jim Marous (36:47):

And probably the best because when we talk to organizations about payments, we talk on this podcast about any major decision. If you don't understand your North Star, at the best you're going to have a 50/50 chance of success.

Jim Marous (37:04):

On top of that, unless you've gone through the strategic decisions you have to make, you'll pick a partner that's only going to be good at certain elements and not maybe good at what you really, in hindsight, would've said, “Geez, I wish I did this.”

Jim Marous (37:17):

This is very much (and I'm going to keep on coming back to instant payments) how the instant payment movement started going, is the solution was out there. We knew the timeline, we knew what the government regulation was going to say, and organizations got together.

Jim Marous (37:30):

In fact, as we go back in history, the smaller organizations really were much more active in understanding what will this all mean and what way do I want to play this. Do I want to become a payments for outbound or inbound or both?

Jim Marous (37:45):

And all those decisions were made. But they were able to make them before the partnerships were formed. And I think you bring up a very good case that says, “Don't go blind when you don't know exactly what this is going to be.” Because there are still questions out there.

Jim Marous (38:00):

It's good to be with a group of players that say, “Here's why I am going this direction,” then you can determine if that's right. But you're going to get a bias if you pick your partners too soon. And it's good to get the community together that can say, “Where could this fall?”

Jim Marous (38:15):

Because tomorrow, a revision to the government regulation could easily come out. We've seen this before. Or timelines could change. Or the marketplace could change on how important certain elements are.

Jim Marous (38:29):

But you got to know the risk, as you said, you got to know the rewards. Many organizations have not looked at stablecoin as data and an insight source, is saying, “What happens if we are left behind on that?”

Jim Marous (38:41):

You already talked about embedded payments and how that impacts that, and the whole demographic group element of saying how are different demographic sectors are going to be viewing this, and how can you make it part of your overall infrastructure?

Jim Marous (38:57):

Again, Lamont, it's very important, and your point is well-taken that it's not the decision you're going to make, it's the partnerships you're going to make around how you make those decisions and partnerships with other organizations of like mind, or who you aspire to become. And again, your North Star.

Jim Marous (39:16):

So, it's a very interesting dynamic. It's something that we're going to obviously have to talk about again because the playbook will not be completely written for any institution in the next three months. But standing still for the next three months, I can only tell you as I say in a lot of our podcasts, you're going to be three more months behind the game because the game's not stopping for you.

Jim Marous (39:39):

Lamont, how do people get ahold of you to find out more about how you're getting organizations together that think along the same lines?

Dr. Lamont Black (39:47):

Yeah, my website, lamontblack.com, is a great place to learn about me, and I've got my contact information there, and I'm also very active on LinkedIn. Feel free to reach out and connect there and happy to share any services or any support that we can offer. As we've discussed, strategy is important here. And so, we want to help guide some of those conversations.

Jim Marous (40:08):

Well, and go a step further, Lamont. I know you also have a very robust thought pattern around AI, around generative AI, around agentic AI, around crypto, because there's still an element of that to be said around blockchain.

Jim Marous (40:25):

A lot of organizations, I think, right now, we’re all catching up to what we know and what we don't know. We don't want to admit ignorance. And sometimes, the grabbing onto a partner that may help you get out of ignorance may not be the right partner based on what you know later.

[Music playing]

Jim Marous (40:38):

So, it’s better to get smarter before you start selecting partners, as you mentioned. And also, self-prompt here, listen to the podcasts that we've done a lot on payments. We've done very little on stablecoin. You're our first stablecoin guest, so congratulations on that. For better or for worse, I guess that whole thing plays out also.

Jim Marous (40:58):

But I think you're a great resource. It’s great to have students in front of you because they can keep on prompting you on things you may not know saying, “Oh, geez, these guys and girls are talking about things that I didn't know were really out there.” You look at the predictive markets and all this, you go, “Man, it is a crazy world out there.”

Jim Marous (41:20):

But I think more than anything, we're seeing the biggest change happen in payments. That's not going to change. The reality is the rails are pretty well-defined on how you have to define these things. It's just a matter of the way you pay. And we can get into a whole podcast on the security issues we have to deal with also with stablecoin.

Jim Marous (41:39):

So, Lamont, thank you very much for being on the show, and I'm glad we could finally put this together.

Dr. Lamont Black (41:44):

Thank you, Jim.

Jim Marous (41:47):

Thanks for listening to Banking Transformed, the winner of three international awards for podcast excellence. If you enjoy what we're doing, we would really enjoy a positive review. Also, check out my recent articles in The Financial Brand, the research we're doing for the Digital Banking Report.

Jim Marous (42:02):

This has been a production of Evergreen Podcasts. A special thank you to our senior producer, Leah Haslage; audio engineer, Chris Fafalios, and video producer, Will Pritts.