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Checkout.com CEO says crypto ‘stablecoins’ could one day run the world

November 2, 2021, 9:51 PM UTC

I’m writing to you today from the Web Summit in Lisbon where I’m having many mask-muffled conversations with executives in between pastel de nata noshings. If the Consumer Electronics Show in Las Vegas is the Super Bowl of tech conferences, one could say Web Summit is the World Cup.

On the main stage this afternoon, I interviewed Guillaume Pousaz, chief executive and founder of Checkout.com. The London-based financial tech firm is one of the world’s top 20 most valuable startups, last privately valued at $15 billion in January. The appraisal ranks Checkout as the third most valuable fintech in Europe, next to Klarna ($46 billion) and Revolut ($33), both of which are customers. 

Checkout’s seemingly sudden success was a long time in the making. After dropping out of college in Switzerland in the mid-2000s, Pousaz moved to California to surf. There he learned about the rapid growth of e-commerce, a discovery that would prove fortuitous. Pousaz rode that new wave, founding a related business in 2009 that would, three years later, become Checkout. He built the London-based company into a quiet giant, mostly flying under the radar until it raised its first outside funding at a $2 billion “unicorn” valuation in 2019.

Things have only heated up since then; the COVID-19 pandemic has treated the company especially well. Many people, consigned to government-mandated lockdowns, shifted their purchasing habits online. Pousaz said he was initially uncertain whether this digital acceleration, which he estimates sped up e-commerce adoption by about three years, would last. He is now confident the trend will not reverse after seeing it sustain even as the world reopens.

One of the biggest benefiters of the digital shift is crypto, as demonstrated by the recent rocket-like rise of Bitcoin and other digital coins. U.S. regulators just dropped a long-awaited paper regarding so-called stablecoins, digital currencies that are designed to maintain a fixed price, a characteristic that makes them, in theory, suitable for e-commerce. As my colleagues Declan Harty and Rey Mashayekhi report, America’s top financial regulators are pointing out their risks and calling on Congress to pass legislation that would treat stablecoin issuers as banks.

While Pousaz told me he is bullish on digital currency, he doesn’t own any crypto personally. (Each of Pousaz’s three kids own one Bitcoin and one NFT, or non-fungible token, a buzzy crypto concept, apiece, he said.) He even sees a future in which stablecoins “underpin everything.” It’s just a “better technology” than what existed before, he said.

While the folks in government acknowledge stablecoins’ potential to “support faster, more efficient, and more inclusive payments options,” they’re far more worried about what they deem a present lack of investor protections and threats to financial stability. 

Robert Hackett
@rhhackett
robert.hackett@fortune.com

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FOOD FOR THOUGHT

"You live by the sword, you die by the sword. That's crypto." If, somehow, you hadn't heard about the rise of the Squid Game-inspired cryptocurrency, consider yourself lucky. Following a week during which the SQUID token posted a 310,000% gain, the crypto plunged to, as of Monday morning, $0.003. The token turned out to be just the wild crypto market's latest rug pull, even leaving experienced investors like Luke Hartford on the wrong side of the trade, Wired reported. But, as Hartford said, buyers should beware in the digital asset markets.

From the article:

Just after 1:38 pm UTC on November 1, $3.36 million that had been invested into Squid Game coin was yanked out of the project by its creators. The liquidity pool in the exchange disappeared in an instant, and within 10 minutes the coin was almost worthless, trading at one-third of a cent.

“Anyone can spin up a token and liquidity pool, so it is a common risk for new projects run by anons,” says Patrick McCorry, CEO of PISA Research and formerly an assistant professor in cryptocurrencies and security engineering at King’s College London.

Hartford realized it was too good to be true when he started reading more and more tweets about it. The fact that the chart never once moved downwards, instead constantly going up, was another giveaway. Yet he’s not angry about the uncritical coverage of the coin’s rise, nor about the $300 he lost. “To me, crypto is about a free market without regulation,” he says. “I don’t think people who want deregulation can complain when things like this happen. You live by the sword, you die by the sword. That’s crypto.”

IN CASE YOU MISSED IT

$69 billion in Bitcoin at the center of Miami crypto court fight by Chris Morris

What still needs a makeover at Facebook: Mark Zuckerberg’s leadership style by Rob Walker

Only 11% of companies are hitting their emissions goals by Lance Lambert

Elon Musk should not let go of win-win deal with Hertz by Bharat Kapoor

Fortnite shuts down in China, the latest foreign video game to face off with regulators—and surrender by Yvonne Lau

With a vaccine mandate looming, these apps help businesses check which employees got vexed by Megan Leonhardt

Quentin Tarantino to release 7 Pulp Fiction NFTs with secret unreleased content by Marco Quiroz-Gutierrez

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BEFORE YOU GO

Algorithms can't flip houses. Beloved by home-curious millennials, Zillow had a good first part of the pandemic. The housing market was on a tear. Website traffic surged. Earnings beat analyst expectations. In February, the company even found itself the subject of a Saturday Night Live skit. But things have taken a drastically different turn in recent months, as Zillow's home-flipping business has seen dramatic losses with more likely on the way. The reason? Its algorithms were leading it to overpay for houses. So, on Tuesday, Zillow said it is quitting the home-flipping business, a move that exacerbated its stock's decline and put it into a class of home buyers who have found themselves over the course of the pandemic asking, what did I get myself into?

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