Dialogue with Lead Bank Chairman & CEO Jacqueline: Stablecoins Cannot Be Separated from Banks

2026-01-17 13:27:00

Collection

Without a banking system, stablecoins cannot operate.

In the 15th episode of Money Code, hosts Chuk Okpolugo and Raj Parekh invited Jackie Reses, the Chairwoman and CEO of Lead Bank, to join them. They delved into several core issues:

Why stablecoin payments heavily rely on the "invisible" regulated "plumbing" of banks;
How compliance automation can transform from a cost center into a genuine product competitive advantage;
And the most important yet often overlooked second-order risk brought by the scaling growth of stablecoins—before alternative mechanisms for local credit creation are found, it may first weaken the deposit base of community banks, thereby impacting the local financial system.

Narration / Show Opening:

Welcome to Money Code. This is a show where we dissect stablecoins and programmable currency together. I am your host Chuck Okpolugo, author of Stablecoin Blueprint. I co-host this show with my co-host Raj Parekh, who is the head of stablecoins and payments at Monet. Today, our guest is Jackie Reses, the Chairwoman and CEO of Lead Bank, who can be considered one of the most important bankers in the stablecoin space. Jackie, welcome.

Jackie Reses:

I’m very happy to be here.

Chuck Okpolugo:

Today, we are going to dissect the "banking layer" in stablecoin payments. Why should you care about this? Because—without the banking system, stablecoins cannot operate. And now, Lead Bank is becoming the key infrastructure pipeline behind the largest stablecoin payment players in the industry. Jackie has transformed a community bank in Kansas City into a bank at the level of financial technology infrastructure. This is her second time building a bank from scratch. If you have ever completed a stablecoin withdrawal or deposit through a virtual account, you are likely using Lead Bank behind the scenes, even if you don’t know it. No one is better suited than Jackie to clarify: the payment rails, compliance, and the real relationship between banks and on-chain currencies.

Before we officially begin, let me quickly state: Money Code is produced by Stablecoin Media and supported by BVNK. The views of the hosts and guests in this program are solely their own and do not represent their respective companies, nor do they constitute any investment advice or other forms of advice. Alright, let’s get started.

Jackie, for those who are not familiar with Lead Bank, can you tell us the story of Lead Bank? What was the specific market gap you saw? And how did it become such a key player in the recent growth of stablecoin payments?

Jackie Reses:

Yes, I appreciate your introduction. Honestly, it warms my heart, and I believe it will make our team and our clients very happy.

The origin of Lead Bank actually stems from a question. I have always believed that starting from a problem is the best way to build new products. When I was at Block (Square), I was responsible for financial services products. During that process, I discovered a systemic issue: the banking system supporting Square's products was the weakest layer of its infrastructure. And it was a completely different era. Remember, that was in 2015. At that time, we started thinking: should we buy a bank, or should we build one from scratch? A lot happened after that. Many infrastructure companies were established subsequently. But at that time, there was no institution like Lead Bank in the entire system. So I initially went down a path: trying to acquire a bank. But that path failed.

In the FDIC process, we didn’t get very far. They told us: since this is a completely new line of business, we actually had to rewrite a whole set of application materials as if we were applying for a de novo charter. So, my team and I sat down and ultimately decided: let’s build a bank ourselves. We started from writing the first line of code, from writing the first policy document.

One of my co-founders, who worked with me at Square, helped me accomplish these things. We knew this was going to be an uphill battle. Because the industry had never seen the kind of bank we were trying to build.

Jackie Reses:

So we entered a five-year process. During this time, we did a lot of things, such as: we worked very closely with multiple regulatory agencies to explain—how algorithmic credit works, how machine learning models operate, and the role of AI-driven models in underwriting and lending. Therefore, before we finally got approved, our path actually went through many detours and side roads, and we went in many directions that were not initially anticipated. Ultimately, when we really got approved, not long after that, I left Square and went to buy my own bank.

I accomplished this with three other colleagues from Square who had also participated in building Square's banking system. Because we were already very clear about what the problem itself was, and we had gone through five years of mistakes and learning, this gave us an opportunity—to start over and build it again from the ground up. But this time, we had a deep understanding that spanned the entire organization. So, we were able to apply that five years of experience fully to the construction of Lead Bank and build it into what I believe is a bank that truly brings value to the industry.

Raj Parekh:

Yes, that’s truly incredible. As Chuck mentioned earlier, much of the infrastructure and many of the building blocks we see today are actually supported by you at the foundational level. Perhaps you could tell us—how did you earn the trust of regulators, startups, and large enterprises? We know you now have a fairly large customer base, but building that trust from scratch takes time. How did you achieve the scale and influence you have today step by step?

Jackie Reses:

Yes, I think there are several aspects.

First, I really appreciate you saying that. Those comments make me feel very good. Lead Bank is owned by a group of people, and we really care about what we are doing. For me, I view what I am doing as a "hobby," not a job. I wake up every day, seven days a week, thinking about our customers, thinking about the products we are building, and I also feel anxious about regulatory issues. So I think when you love something as much as I do, as my colleagues do, you pour your heart and soul into it. I hope our customers, and the broader ecosystem, can feel that. I don’t want to get too sentimental or emotional when discussing financial services products, but that is truly how I feel inside.

On the regulatory side, there are several dynamic factors that make Lead Bank stand out.

One of them is: we have a complete set of automated systems for compliance and anomaly detection. This entire system is very unique within the banking system. It allows us to look at issues from a "risk-adjusted" perspective—namely: where is the real risk? Because we can see anomalies based on customer behavior in real-time. These codes and systems make us smarter when collaborating with customers.

Because in risk management, you can choose: either "checkbox" compliance or "substantive" compliance. We choose to do both. If there are some regulatory requirements we must complete in terms of formal checks, that’s fine, we will do it. But if we can calibrate risk on what truly matters, rather than on regulatory legacy logic that may have originated in 1978 and is now outdated, then we will do that. We prefer to focus on the complexities of current products rather than some monetary assumptions from the pre-digital age that have somehow been solidified into the regulatory framework.

The second point is: we have an incredible team.

I believe our legal and compliance team is unparalleled. Many of them come from our client side. Therefore, they understand what it’s like to build products from the "other side." Because they are builders themselves, they know what risks truly need attention and how to help great companies scale. I think that’s the most important point. Because "risk on/risk off" and "picking the best companies and helping them grow" are two completely different things. And I often find that truly great companies actively embrace compliance because they don’t want to make mistakes with customer funds. They know the consequences of these things are too severe to get wrong.

So when we can collaborate with good judgment, product expertise, and automated systems to help them expand in a regulated environment, we form a very good partnership with our customers. Regulators can see that too.

There’s another thing that I think is very important and makes us stand out in our relationship with regulators. While I know we are not the only ones doing this, as there are indeed many excellent participants in the industry. That is: we are very proactive in presenting projects to regulators and discussing what we are doing.

Even for some things we are not currently doing but believe may pose issues in the future, we proactively discuss them with regulators.

We lay everything on the table:

Explain what we are doing
Explain where we think there may be risks
Explain how we plan to mitigate those risks
And then seek the judgment of our regulatory colleagues

Because we prefer to identify issues early on and ensure that the judgments of regulators are incorporated into what we are doing. So I believe we are very proactive in our collaboration with regulators. We have never encountered major issues. We are fortunate to have established a very good relationship with regulators.

And the foundation of this relationship is:

Facing the problems we discover ourselves
Acknowledging and demonstrating the mistakes we have made
Being honest about what we do not know

I believe this transparency and honesty have been very helpful to us in the long run.

Additionally, we have been collaborating closely with the Kansas City Fed, the Federal Reserve's innovation team in Washington, and the FDIC since early on. We have been researching innovative policies around crypto and digital assets, such as "red flag" identification mechanisms. To this end, we have written a lot of documents to support the broader understanding of these issues across the industry. And whenever there is an opportunity, whether it’s a committee, innovation event, or any regulatory body that wants to hear from frontline practitioners, we proactively contribute our time. I have also personally presented sanitized "red flag" cases, showcasing situations I believe pose problems and trends I see emerging. Because we are at the "tip of the spear," we can see these changes first.

And it is precisely because we continue this dialogue that we can better serve our customers. We can help customers solve problems in what I believe is a smarter way, and in some cases, do things that other banks cannot do. That’s a long answer.

Raj Parekh:

No, that answer is excellent.

Chuck Okpolugo:

And I think the points you just mentioned are all worth diving deeper into:

Proactive dialogue with regulators
Modern machine learning, code-driven risk management systems
Close collaboration with customers, anticipating issues and bringing them to regulators

These fundamentally constitute your differentiated capabilities.

So, what specific things can these capabilities enable you to do? Are there any practical use cases you can share? For example, one that immediately comes to mind is: you can complete onboarding very quickly and can onboard clients that are too "tricky" for other banks.

Jackie Reses:

Absolutely correct.

We once had a client who was a very small stablecoin company. A few years ago, they were dropped by their previous bank because that bank decided to stop engaging in digital asset business. We onboarded them at that time. They had very few employees and were still learning and building their compliance capabilities.

And now, they have grown into one of the billion-dollar scale, most watched stablecoin companies globally. They have an incredible attitude towards building their compliance team. They are serious about constructing the functional framework necessary to build customer trust. They assembled a world-class financial crimes team, led by someone with a background in the Treasury and military, who is an extremely outstanding and high-quality leader. You can tell right away: this is an A+ team. Even though they were still in a growth phase at that time, we were willing to grow alongside them because they were willing to work with us on this. The reason we invested time and resources in them is that we believe they already have an A+ core team and the ability to continue attracting A+ talent.

Therefore, we onboard various types of clients. We do not only serve large clients. We also onboard very small teams. These clients often come from recommendations by investors, founders, or compliance officers we know. Of course, we cannot onboard everyone.

But when we see a very strong team with the right attitude that is willing to quickly and seriously climb the compliance learning curve, we actively engage and do our best to support them. That’s a very cool thing.

Chuck Okpolugo:

From your description, I sense a very clear commonality: you are bringing a Silicon Valley-style tech DNA into the "building a bank" process. You treat almost every component as a product. I think that’s very evident and also very prominent.

Jackie Reses:

Yes. In fact, everything is a product.

Even our compliance team. This is a very important dynamic within our organization and one of the reasons I believe our compliance team can become the top team in the industry. They are truly outstanding. Because their work is front of house, not a back-office cost structure. They are right at the front lines. They almost function like a sales team. In fact, we don’t have a formally defined sales team. We are a zero sales team.

But our compliance team stands directly in front of the world’s best fintech, consumer companies, e-commerce companies, and crypto companies. This requires a very special kind of person. You must:

Understand your own work
Understand the client’s product
Be able to advocate for those products
And be able to advise the best companies in the world

In many cases, these companies are top players in the industry themselves. You must be at a very high level to work in such a team. And the reason we can attract such people is that their work is visible. They are not hidden in the back office as a cost center.

So I think that’s what makes our team very special, and why they want to work at Lead. Because they can gain this experience and collaborate with very excellent clients. I really love our clients. They are all very "rockstar." We work with a group of truly amazing people. When your counterparties and partners are such people, you feel excited about work every day.

Chuck Okpolugo:

Of course, not everyone is.

Jackie Reses:

Yes, certainly not everyone, but most are.

Chuck Okpolugo:

No, that’s really great. Because you could easily treat compliance as a "checkbox" back-office function. But when you treat it as a product and introduce that rigor, framework, truly listen to customers, and iterate continuously, it becomes very powerful.

Jackie Reses:

Yes, compliance itself is an advantage. Compliance itself is a value proposition. We do see it that way. And there’s another thing. We specifically discussed this at our annual in-person team meeting held in Kansas City a month ago.

That is: we have a philosophy of "editing" within the company. We do not allow internal functions to only "add." They must edit. Have you ever experienced a banking experience where every team wants its own set of documents, its own set of questions, its own set of requirements? But no one really looks at the overall picture:

What is necessary?
What is redundant?
What is just slightly rephrased every year?

So every year, someone continues to add things. This is really frustrating.

Jackie Reses:

Going back to your earlier question: what is the starting point of Lead Bank?

Its starting point is this painful experience at the customer level. When we built Lead Bank, we were building the bank we wished we had at Block (Square) back in the day. So, our internal team must "edit" everything they do. There is no "adding without subtracting." If we are going to add some requirements, we must remove some others.

To be honest, I even think regulators should do this. Because ultimately, you end up with a regulatory framework that keeps piling up, filled with content that is no longer relevant but has never been removed. This makes regulation become noise rather than signal. And I want our compliance team to provide customers with very clear, strong "signals":

To help them scale
Rather than create noise
Not to be a nuisance
Not to cause frustration
Not to create a lack of product understanding

This is how we run our legal and compliance team.

Chuck Okpolugo:

This is actually a project management philosophy. It’s really great, and it also well demonstrates everything you have built so far. You recently made a very important move. You announced the acquisition of the Loop Crypto team. We are very familiar with Eleni. Can you talk about:

The reasons for this acquisition
The considerations behind it

This also gives the impression that Lead is not resting on its laurels but is continuing to move forward.

Jackie Reses:

Yes, it is definitely not a stop. Eleni and her co-founder Shane are both incredible. There are several very important reasons why we wanted to acquire this company. First, it’s the team itself.

Secondly, it’s their expertise in the direction we are building. Let me start with the team. They are very humble, very smart, have a high level of raw intelligence, a strong work ethic, and are very good people. Lead is a company that is very customer-centric, emphasizes innovation, but also remains humble. We take our work seriously, but we don’t take ourselves too seriously. We enjoy the process, like good people, and work with good people. We are not a bunch of jerks. Therefore, whether the team can get along well is very important to us. Because I want our wonderful company culture to continue to evolve along this path—a culture that is humble, fun, and smart. And I believe the Loop team matches this completely.

The second point is, from a capability structure perspective, they have extremely deep expertise in stablecoin payments. And this is precisely the direction we have been highly focused on. You have already seen our investment in this area at the customer level. You have also seen our desire to become a design partner with Tempo and hope to collaborate more deeply on their chain. This acquisition is a continuation of the same strategic logic. These products are very important to us and very close to our hearts.

Chuck Okpolugo:

That’s really great. And I completely agree with you. They are indeed outstanding founders. To help everyone understand the technology and product structure of Lead Bank, I think the "underlying structure" of banks is not intuitive for most people.

Can you briefly introduce: what makes Lead Bank different? What services do you offer? And why is your API layer so popular with customers?

Jackie Reses:

This question can actually be answered from many angles. I will try to make it suitable for podcast listeners. Because I know no one really wants to go through our architecture diagram line by line.

Lead Bank is a completely custom-built infrastructure from top to bottom. From the top layer to the bottom layer, it is all built by Lead's engineers. Our products exist in the form of APIs, integrated into our clients' product systems by their development teams. Our APIs—100% built by Lead.

At a foundational level, our APIs roughly cover five categories of products:

The first category is the stablecoins we are discussing today. Around stablecoins, we have built a whole suite of broader product offerings.

The other four categories are:

Money movement
Issuing
Lending
Accounts

These may sound ordinary, even a bit like banking functions from the 1990s. But these functions are very innovative in terms of how they are built and logical design. This is reflected not only in how the APIs are constructed but also in how we deliver these capabilities along with higher-level services to customers.

For example, with stablecoins, you can freely combine these foundational components (primitives) to build various product forms. One end can be stablecoin reserve management, while the other end can be card product functionality, or quickly generating millions of accounts on the other end. All of these are fully automated systems. Based on the needs of end customers, we will stitch these components together to provide them with a complete set of banking and financial service capabilities. The engineering teams of our clients then integrate these capabilities into the systems they are using. They are deeply integrated with our banking tech stack, but they can still deploy these capabilities in a fully customized way to create the customer experience or business experience they truly want.

Chuck Okpolugo:

Since you have already discussed stablecoins as a product and clearly thought about how it integrates with the entire product system, let’s return to the core issue we mentioned at the beginning of today’s discussion: the evolution of the financial system. Banks play a very critical role in it. How do you think—banks, especially bankers, should view stablecoins? Perhaps you can discuss this in the context of different types of banks in the U.S.

Jackie Reses:

You know, I think this is a very difficult question for banks. There are about 5,000 banks in the U.S. In my view, only about 100 of them really need to think of stablecoins as a "core strategic position."

These banks must seriously consider:

What their payment rails are
What payment products they offer
How money flows within the system
How they will compete within this framework

But beneath that, there exists a completely different demand structure from the "bottom" up.

So I’ll start from the "bottom." There are about 4,000 community banks in the U.S. I don’t think your audience has much empathy for the community banking system. I don’t want to speak for you, but this is probably not something you think about often. And I am very concerned about these 4,000 community banks. Frankly, I worry about the stability of the U.S. economic system. Because once we start talking about trillions of dollars flowing from the banking system into stablecoins, it means: that money is coming out of the banking system.

So when the Treasury Secretary mentions a $3 trillion stablecoin asset, you should assume: that money is "flowing out." The entire U.S. banking system is about $20 trillion in size. Therefore, I believe the most vulnerable banks in the U.S. will face the greatest risk of deposit outflows.

So if you have never worried about community banks before, think back to the COVID period. At that time, we suddenly became very empathetic: we cared about where to get our hair cut, which restaurant to go to, whether our doctor was local, and whether there were retail stores serving us. It was as if overnight, we became extremely sensitive to "neighborhood communities." I am very concerned that if funds flow too quickly and on too large a scale out of the banking system, community banks across the U.S. will start to fail. Therefore, I very much hope to see:

Some kind of stabilization mechanism
Or new product lines

That can truly allow small banks to operate in synergy with stablecoins and the digital asset space.

Jackie Reses:

Because there is one thing I firmly believe: the future should not, and will not, have a distinction between digital assets and non-digital assets. They will become unified, collaborative payment rails. You will just choose one based on your needs. But let’s pause here; if you’re willing, I can return to this topic later.

Now back to the banks themselves. Many of these banks do not currently need stablecoin products. I can see only two directions in which they might use stablecoins. But the problem is: they do not have the resources to build these capabilities themselves. So they must rely on external infrastructure providers to turn these capabilities into mainstream products.

The first direction is: customer-facing wallets. In a wallet, you can manage various types of assets, just like you manage dollars in the banking system today. I believe core system providers will eventually achieve this and enable almost every bank in the U.S. to have this capability.

The second direction is: the infrastructure layer. And I believe this is an extremely huge opportunity for the entire industry. Because I believe banks will ultimately use stablecoin infrastructure, but not because: "Great, we are going to use stablecoins." But because: this use case is highly relevant and useful to what they are doing. They will choose it not because it is a stablecoin, but because it is useful. This is how I believe small banks will ultimately integrate into the stablecoin ecosystem.

Jackie Reses:

There are some things I really hope to see happen. That is: in terms of payments and deposits, current legislation should allow small banks—those with assets under $25 billion—to participate in this market in some positive way. This way, we won’t see a asymmetrical outflow of funds: from the traditional, old-fashioned banking system spread across the U.S. to large money center banks or giant money market funds.

And the only reason I am concerned about this is: we do not yet have an alternative mechanism to complete the velocity of money at the local level in the U.S.

I really don’t know who will do:

Microloans for small businesses
Small business loans
Rural loans

Covering the entire U.S.

We are too accustomed to thinking that "communities just operate naturally." But the fact is: someone must have once lent money to that restaurant for it to open. The reason I say this is that I once held an extremely arrogant view about this. When I was involved in building small business loan products at Square Capital, before establishing contact with the Kansas City Fed, before I truly owned and operated Lead Bank from a local perspective, I thought I had built one of the best small business loan products in the U.S. And I believed that companies similar to us—like Stripe Capital, etc.—also built very good small business financial systems. But the reality is: these systems have not achieved true "universal coverage." Local lending remains the core force driving the velocity of money in local communities. And I do not want to see that force disappear. I believe we are not ready to lose it.

So I sincerely hope we can find an answer that reassures the banking system and satisfies the crypto industry. Because I do not believe these two must be in conflict. I believe they can work together in complete synergy. For example:

Where should stablecoin reserves be held
What capital adequacy ratios should be allocated for stablecoin reserves
What types of products can "payment banks" across the U.S. participate in

Raj Parekh:

I completely agree. I think we are really fortunate to have a conversation with someone like you. You have built small business loan systems at Square Capital, and you are very clear about what it takes to reach small businesses and where the real gaps are. I think these insights are extremely important and helpful. I want to follow up on a few points you just mentioned. You mentioned some opportunity points:

Building infrastructure
Building software layers
Enabling banks to interact with customers on top of that

What do you think will be the most likely stablecoin use cases for community banks and regional banks in the coming years? Is it: cross-border? Domestic? Or other directions?

Jackie Reses:

I think this is precisely where the biggest contradiction lies. For banks with assets under $1 billion, the use cases for stablecoins are actually very limited. I remember attending a Federal Reserve event last October. At that time, the CEO of Jonah Bank in Wyoming stood up and asked Vlad Tenev, the CEO of Robinhood: "What use does cryptocurrency have for banks like ours?" That bank has about $500 million in assets. And Vlad’s response was probably: "Frankly, I’m not sure there’s a clear use case for you today."

Aside from the wallet and infrastructure I mentioned earlier, unless banks are doing cross-border payments, the existing payment systems in the U.S. are actually quite usable. So I do not believe there is a very obvious stablecoin use case for banks with assets under $1 billion. And this is precisely why I am deeply concerned about the long-term viability of community banks.

Because on the account side: interest-bearing accounts; and on the payment side: payment moats. I believe these are the only two important moats left for these banks. And I hope they can preserve these moats. Because I truly believe: when they disappear, we will definitely miss them. Just like five years ago, when local services disappeared, we only realized what we had lost.

Raj Parekh:

Yes, I think this is a very interesting and important observation, Jackie. Because in the crypto space, we often discuss so-called "debanking" or "not participating in the banking system." But many times, at least for myself, these discussions often revolve around large money center banks. And the point you just mentioned reminds us that many times, these community banks are actually the "lifeline" of a city, a town, or a region. So this is not just about "going bankless for the sake of it." There is actually a larger and more nuanced perspective here. So thank you very much for sharing this.

Jackie Reses:

Yes, this is not a position of "crypto extremism," nor is it a slogan like "Go for it, community banks, you can do it." But I do remember the time after Signature Bank and Silvergate had issues. We would have dinners together discussing the issue of bank consolidation. At that time, many people were emotionally distraught over being "unable to access the banking system." But interestingly, just a year prior, they were actually very hostile towards the banking system. And when they truly needed banks, they made a 180-degree turn, trying hard to meet all the demands of banks just to continue operating.

I think it was during that phase that many of the largest and best players truly understood that there is a symbiotic relationship between the banking system and the crypto system.

That’s why:

Onboarding
Offboarding

Become so important.

The dynamics surrounding minting and burning are also extremely important. I truly believe: if people are willing to observe seriously, we can absolutely build a modern banking payment rail for the crypto industry without cutting off the "legs" of community banks.

Chuck Okpolugo:

Can you elaborate on the point you just mentioned about the "symbiosis" between digital assets and the traditional system? Do you think this is also related to tokenized deposits?

Jackie Reses:

Yes, absolutely. I believe tokenized deposits are an important evolutionary direction in the future form of digital currency. I mentioned earlier that I do not believe there is an essential difference between digital and non-digital currencies, aside from the obvious physical form of cash. If you exclude cash, then from the perspective of asset evolution, we actually started moving a large number of financial assets onto "digital rails" back in the mid-1970s.

Whether it’s wire transfer systems or other digital systems, these systems may have limitations and may seem somewhat outdated in appearance and usage, but the reality is: over the past 50 years, we have successfully migrated a significant portion of the banking system onto digital rails. The question now becomes: can we reconstruct new rails, leveraging the advantages of programmability to truly drive the next leap in financial infrastructure?

This is the direction I believe in. I absolutely believe that programmability and interoperability will become the core of future financial infrastructure. But in the future, we will no longer distinguish between: "this is a digital asset," "this is an old-fashioned asset." We will only have a series of payment rails and choose among them based on the current use case. We will not put all transactions on digital asset rails if it is not necessary. In some cases, traditional digital methods may be faster, cheaper, and more suitable. In other use cases, rails based on stablecoins or on-chain may be better and cheaper.

I think a good analogy is: debit card payment rails. You can choose different payment rails. Even at checkout, you will choose different payment methods. What they do is essentially the same: transferring money from you to the merchant. But depending on the goal you want to achieve, that money can take many different paths. And the reality is: today, we are already very good at making these choices between different rails. But even so, even if you are using Cash App or Venmo, you do not really understand:

What rail is being used behind that "instant arrival"?
What does "1 to 3 days for arrival" mean?

Does this mean they are using completely different payment rails? For 99.99% of people in the world, they do not know. Even I myself am not sure if I am one of that 0.01%. So I believe: stablecoins, digital assets, and future tokenized deposits will all become another form within this rail selection system.

I believe tokenized deposits will have a different use case. They will be used more by banks within their own systems, while stablecoins are more suitable for interoperability between different systems. So I believe that in the future, very cool products will be built around tokenized deposits and "everything tokenized." As we continue to think about other foundational components (primitives) in the financial system, this will become increasingly clear.

Raj Parekh:

Yes, I believe the interoperability between the two is the key to truly connecting the entire system. And one point you just mentioned is very important: people are already using a large number of different payment rails in different scenarios. Considering that there are 5,000 banks in the U.S., various legacy systems, and existing paths, it is almost impossible for the entire system to eventually converge to a single rail.

So over time, as people begin to adopt tokenized deposits and other more open rails, we may see: domestic payment rails on the blockchain, new types of rails within banks. This will certainly bring more complexity to the entire system. But from a practical perspective, the evolution of technology has almost never been linear. It is usually a coexistence of multiple solutions. In some use cases, banks will choose instant tokenized deposits; in others, they may choose FedNow or RTP. And behind the scenes, the banks that are truly responsible for the "plumbing" will choose the most suitable path.

Jackie Reses:

I think we may currently be in the most chaotic phase of future evolution. That is to say, we are experiencing a highly fragmented state. Various players are building their own ecosystems and hoping their systems can become the de facto standard platform. So you will see a lot of companies trying to "platformize" money movement.

But no one is really certain:

Which company
Which project
Which chain
Which structure

Will ultimately prevail.

Honestly, I think what we are building now is almost infinite complexity. This requires a very high degree of interoperability, but it does not actually make things simpler. But I also don’t see any alternative paths. Because I do not believe we can establish a unified framework by "mandate." I don’t think that aligns with how things operate in the U.S.

So the current state is: we allow various free-form companies to participate in a sort of "Hunger Games" competition for platformizing the monetary system. And I support this. Because it is not clear what is truly needed under different use cases. So I believe that in the next 5 to 10 years, we will see:

Extremely diverse choices
Then gradually converge

Ultimately returning to a group of more organized participants to make "moving money" simpler. In the future, there may be a certain company or group of companies that become more dominant at different levels. But today, at almost all infrastructure levels, there is no real "ruler." So the current state is indeed a bit like a free-for-all.

Chuck Okpolugo:

What do you think will be the key factors that ultimately determine the winners and losers?

Jackie Reses:

I believe the key will be: transaction volume under different transaction types. People will start migrating to those chains and systems that can handle large-scale capital flows. These systems must be:

User-friendly
Programmable
Able to execute transactions quickly
Cost-effective

And I do not believe there will ultimately be just one winner. Different people have too many different use cases. So the future state is likely to be: today you are my competitor, tomorrow you are my partner. Because the technology stack of customers is itself extremely complex, and they have to deal with many different use cases, so I do not believe there will be a "one-size-fits-all" solution. But I do believe that about five years from now, we will see a few true leaders among the different components of the ecosystem.

Chuck Okpolugo:

That’s really interesting. While you were saying this, I kept doing "pattern matching" in my mind because what you are describing aligns perfectly with many conversations I have recently heard in the ecosystem. This is really fascinating.

So Jackie, as we approach the end, I want to ask you a question: what should we expect Lead Bank to do next? You have already done a lot in the infrastructure space, crypto space, stablecoin space, and even the broader fintech space. What will Lead bring next?

Jackie Reses:

We will continue to keep our heads down and work to improve what we are already doing. I know this answer may not sound specific enough, but we will continue to build core banking primitives,

ensuring:

Real-time money movement
Cross-border money movement
Core product capabilities for banks

These capabilities will continue to be refined and enhanced.

We have a lot of work to do just to make the overall experience around these products better. Finally, you will also see us continuously launching unprecedented new products in the digital asset space. This is something we are very good at because we can combine a very strong product, engineering, and design team with our legal and compliance team,

to jointly assess:

What can be done
What should be done
And how to implement these things with excellent partners

So you will continue to see new announcements from Lead, many of which will be very cutting-edge and exciting. I won’t give anything away in advance, but I am really looking forward to it.

Chuck Okpolugo:

I was hoping you could give a little sneak peek, but I understand, I understand. Before we wrap up, I have a few questions. You have played core roles in multiple financial and tech startups. As a serial builder, what advice would you give to entrepreneurs in the financial services space?

Jackie Reses:

My advice to entrepreneurs in financial services is: build for "precision" and "scale."

Let’s start with precision. When it comes to money movement, you cannot make mistakes. You must be trustworthy. "Act fast, break things" does not work in financial services. You can act quickly, but you cannot break anything. You can challenge boundaries, but when it comes to people’s money, "breaking things" is completely inappropriate in my view. So I always tell my team to prioritize "precision."

Then there’s scale. You need to build:

Redundancy
Resilience
Scalability

To support future growth. Financial services is an extremely complex industry. It is very difficult to truly integrate these products. At the foundational level, there are many complex value chains. But when you build for scale, these products can become very powerful, very profitable, and truly drive the world forward in terms of "impact." That’s why I love financial services. When you can build large-scale, impactful products, that feeling is truly amazing.

Chuck Okpolugo:

Yes, it is this complexity that makes it so fascinating. And ultimately, everything will come back to real-world impact. One last question: what should we pay more attention to in this field? We previously mentioned community banks.

Jackie Reses:

I think people should pay more attention to use cases that truly solve problems. One point I feel frustrated about in the crypto space is: there are too many use cases that do not actually solve any problems. Of course, there are many truly excellent products in the ecosystem. When someone introduces me to what their company is doing, I often feel very excited. But there are also many companies where, after listening, you are not clear: what exactly have they changed? Where is the ultimate impact?

So I really hope entrepreneurs can return to the question: what "pain points" are you actually solving? I think this is one of the most important things the early crypto industry should focus on.

Another piece of advice is: do not use excessive exaggeration, clichés, and industry jargon to explain your product to the point where no one really understands what you are doing. I find that in highly innovative industries like AI and crypto, many founders get caught up in terminology that only they understand. But I truly believe: if you can explain it to me in the simplest language, or if I can explain your product to my child, then I can better understand: what exactly you are doing and what you want to achieve.

Even for myself, I often feel frustrated: I think I understand this industry well enough, but sometimes sitting in meetings, I am completely unclear: "What exactly is this product for?" So I often say: "Can we take a step back and rephrase it in more normal language?" This industry indeed has many true experts. But not everyone can live in this field 99.99% of the time every day. So I think experts have a responsibility to step back and ensure they can explain clearly to non-experts.

Chuck Okpolugo:

I completely agree. Jackie, this conversation has been truly wonderful. If people want to learn more about you or Lead Bank, where should they go?

Jackie Reses:

You can visit our website: lead.bank. You can also find me on X (formerly Twitter) or other platforms. Feel free to reach out whenever you need us.

Raj Parekh:

You can find me on X: @rparak and mana.xyz.

Chuck Okpolugo:

If it were me, I would visit stablecoinblueprint.com. On X, I am @chuk_xyz and on LinkedIn, I am Chuck Okpolugo. Jackie, thank you very much for joining our show.

Jackie Reses:

Thank you, I really appreciate it.

Chuck Okpolugo:

This has been fantastic. Thank you for listening to Money Code. There is so much to take away from today’s conversation. I learned a lot, and I hope you did too. If you enjoyed this episode, please share it with your friends or give us a five-star rating on Apple, Spotify, or wherever you listen to podcasts. We’ll see you next time.