Author:** Wu Says Blockchain**

This interview delves into the experiences shared by Maggie Wu, the founder of VelaFi, regarding the Latin American market and its applications in the stablecoin and cryptocurrency sectors. Maggie recounts VelaFi's entrepreneurial journey in Latin America, particularly focusing on payment solutions in countries with relatively weak financial infrastructure, such as Mexico, Brazil, and Colombia. VelaFi primarily provides cross-border payment, clearing, and settlement services for businesses through stablecoins and blockchain technology. She also elaborates on the challenges and breakthroughs the company faced in compliance, financing, and localization in the Latin American market, especially how stablecoins addressed financial pain points in the region, such as foreign exchange controls and inflation. Maggie also looks ahead to future development plans, including expansion in the United States and Hong Kong.

Maggie discusses her personal background and entry into the crypto industry

Cat Brother: Could you introduce us to some of your experiences before and after entering the crypto industry, and why you decided to enter this field?

Maggie: I immigrated to the United States after graduating from university around 2005. After arriving in the U.S., I worked in entrepreneurship and investment-related roles. Around 2017, I started buying Bitcoin, initially developing an interest in the industry through the secondary market. Later, I took a blockchain course at MIT to gain a deeper understanding of the technology. By the end of 2017, I decided to fully commit to the crypto industry and, together with my partner, established a fund focused on investing in this sector called Krypital Group. From 2017 to now, we have actively invested in about 100 projects. Of course, my main focus now is on VelaFi, while my partner primarily manages the fund, but I still keep an eye on the industry and continue to learn.

I find this industry very interesting because there is always new knowledge to learn every day. In 2019, I encountered some investment opportunities and conducted market research in Latin America to find the next opportunity. In fact, before the DeFi Summer, I had explored many new investment opportunities globally. When I arrived in Latin America, I found the market to be very large, with clear pain points, but there were very few real crypto projects. Personally, I have been involved in investment and entrepreneurship for almost 20 years and enjoy entrepreneurship, so I saw a significant opportunity in Latin America. Therefore, at the end of 2019 and the beginning of 2020, I decided to start a business in Latin America and established Galactic Group, with Galactic Holding as our parent company and VelaFi as one of our brands. That’s a brief introduction to us.

Cat Brother: Can you introduce us to VelaFi, your company's specific business model, and what motivated you to establish it and the core opportunity you saw? What were the initial pain points you observed in the Latin American market?

Maggie: I arrived in the Latin American market around 2019 and 2020. My first stop was Mexico, followed by other countries. The main pain points we observed were that the entire financial system in Latin America is relatively underdeveloped, but the economic development of the market is very rapid. Additionally, the pain points vary from country to country: some may have foreign exchange controls, some face inflation, and the volatility of their local currency can be significant, while others find it difficult to access U.S. dollars. Based on this series of pain points, we realized that stablecoins and digital currencies could naturally address these issues. Thus, we founded VelaFi. Our main products are financial infrastructures based on stablecoins and blockchain as the underlying core technology, primarily solving payment and clearing issues for businesses, covering cross-border payments as well as local payments. So, this is our core product offered in the Latin American market.

VelaFi's team size and distribution

Cat Brother: Can you share the current size of your team?

Maggie: Our team is not very large, around 60 people. Some are in Asia providing technical support, some are in the U.S., and the rest are in Latin America. Most of our team members are actually in Latin America.

Cat Brother: So we can understand you as a Latin American company.

Maggie: Yes, you could say that because our first entity was registered in Mexico. We actually started in Mexico, then moved to Argentina, Brazil, Colombia, and Peru. We have entities in almost every Latin American country, obtained licenses, hired employees, and have a very localized presence. Of course, we also have employees in the U.S. and Asia; we are a relatively distributed company. We also use AI, so while the team may not be very large in number, each member's capabilities are very strong.

Cat Brother: You mentioned that you started in Mexico and then had the opportunity to expand the business. Did you feel that there were challenges in the blockchain space in Latin America, or were there other opportunities that led you to establish roots in this region?

Maggie: I don’t think there are challenges in the blockchain space; the main issue lies in the traditional financial system. As I mentioned earlier, about 60% to 70% of people in Latin America do not have bank accounts, and most still use cash. The financial system in Latin America today cannot be compared to that of the U.S. or China. Moreover, there are over thirty countries and regions in Latin America, each with different regulations, compliance, and banking systems. For example, in some countries, it is difficult to access U.S. dollars, and the volatility of the local currency can be significant. For businesses operating there or local residents, if they cannot ensure the stability of their currency, they may suffer significant losses.

At this time, U.S. dollar stablecoins provide them with a relatively easy-to-access equivalent currency, which we also refer to as TOKEN or tokens. To some extent, stablecoins help businesses and individuals avoid losses caused by currency fluctuations. Additionally, another scenario is cross-border remittances. For instance, if I want to transfer money from Colombia to Peru, using traditional banks, the speed and efficiency are very slow. If using stablecoins, the speed is very fast.

If corporate clients use our solution for cross-border transfers in Latin America, we can generally complete it within 30 minutes. For countries outside Latin America, we can generally achieve T+0, meaning it will definitely be completed within a day. In contrast, traditional bank cross-border transfers typically take 3 to 7 days or even longer, and banks may ask many questions, and there is a possibility that your money could be returned, leading to various issues. Therefore, I believe that under today’s development trends, not only in Latin America but also in emerging markets like Southeast Asia and Africa, the application scenarios for stablecoins are very large.

Time and cost advantages of cross-border payments

Cat Brother: First, you mentioned that your process is relatively quick, and in terms of efficiency, you also perform better. Since you mentioned traditional remittances might return your funds, stablecoin payments should generally be completed. Do you have more specific cases to share with us, particularly comparing the time and cost of your services against traditional financial cross-border remittances? Could you provide a specific example that left a strong impression on you?

Maggie: There are too many examples. We currently have five to six hundred corporate clients, and they frequently use our products for cross-border transfers, sometimes daily, weekly, or monthly. I think their needs are quite similar. Let me give a few examples. One is payroll distribution. Many companies have employees in Latin America, and using traditional methods, bank remittances may take about 3 to 5 days or 3 to 7 days, depending on where the money is sent; moreover, the time it takes to reach employees is not always accurate. Some employees may not have bank accounts, such as outsourced workers or freelancers, and many places find it difficult to provide quick payment methods.

However, using stablecoins is very fast. As I mentioned earlier, it can generally be done within a day. Employees only need to open an account with us, which is similar to a bank service, although we are not a bank; we have wallet functionality. Companies create sub-accounts for employees, and once employees receive stablecoins, the speed is very quick.

After receiving the funds, employees can transfer the money to their bank accounts in seconds or minutes through our compliant banking interface, or they can also withdraw cash through other channels. So, this channel is very rich. Additionally, there are many import and export traders in Latin America who may need to transfer money to Hong Kong or need to make payments from Hong Kong to Latin America. Using our services, traditional methods may take 5 to 7 days, while our processing is not only fast but also cost-effective. Traditional cross-border remittance spreads, foreign exchange losses, and intermediary bank fees typically incur a loss of 2% to 3% or even more.

With us, first, the speed is very fast, and payments can be completed within a day; secondly, the fees are less than 1%, which can save about 70% of payment costs compared to traditional methods. So, the cases are quite similar. Whether it’s payments from Latin America to other countries, from other countries to Latin America, or from Latin America to other regions, using stablecoins for cross-border transfers is very simple, and it can even bypass the traditional banking system's SWIFT, as it operates on the blockchain, completing transactions in seconds or minutes with very low fees, quickly transferring funds from one country to another. I believe the core advantage lies not only in cross-border payments but also in local payment implementations, ensuring we have compliance capabilities and strong product capabilities in our clearing and settlement with banks.

Risk control mechanisms and challenges in integrating with Latin American payment systems

Cat Brother: You also mentioned that the entire remittance process may involve the banking system. How do you ensure the stability of remittances, liquidity, and settlements during holidays or when the blockchain itself encounters extreme market conditions? Could you give us an example, assuming a large remittance is executed, what the specific process looks like? What key risk points or control points might be involved?

Maggie: We actually settle large amounts because we primarily deal with corporate clients, and each transaction is generally substantial. This is also one of our capabilities. If you have the opportunity, you can visit our website, and you can see the displayed page without needing to register an account. You can try entering any amount, for example, 1 million Mexican pesos, and the system will provide a real-time quote.

This real-time quoting system is one of our capabilities, aimed at ensuring that customers can settle promptly when placing an order. This involves liquidity management and some algorithms in our system. This is also part of risk control; in fact, risk control is an important aspect of our system. During holidays, we reserve more liquidity than usual. Generally, we prepare more thoroughly to ensure smooth operations during special periods.

Our clients typically engage in large transactions, and the amounts they order are generally significant. If you have the opportunity, you can directly experience it on the VelaFi official website; after entering the amount, it will display an automatic quote showing the corresponding stablecoin. One of the core capabilities of this process is liquidity; we prepare sufficient liquidity pools to ensure that customers can complete settlements promptly. Additionally, we have been operating for many years, and the daily trading volume on our platform is quite large, allowing for a certain level of liquidity among clients.

Of course, during holidays, we will particularly prepare for liquidity and strengthen our risk control and emergency mechanisms. These are all necessary preparations that must be made in advance.

Risks of Using Stablecoins and Liquidity Assurance

Cat Brother: I remember there were some issues with a certain bank in the U.S., and USDC was slightly depegged at that time. For example, when facing such extreme market conditions, do you experience any disruptions when executing large remittances? Or are there any risk control points?

Maggie: We have some risk control mechanisms in place, such as a price circuit breaker mechanism, and we also limit large orders; orders that exceed our capacity will not be executed. If the price exceeds a certain range, we will also implement a circuit breaker to avoid executing orders that cannot be completed, thus preventing losses for us or our clients. We are not a traditional high-frequency trading exchange; rather, we are a platform that helps businesses with fund management and fiat currency payment services.

So even though our clients are relatively large, the trading frequency is still different from traditional high-frequency exchanges. We are not easily affected by these extreme events. Additionally, due to our years of experience in the industry, our risk control system is relatively well-developed, allowing us to foresee and consider various potential black swan events.

Cat Brother: You mentioned multiple times that you have integrated payment channels in Latin American countries like Mexico, Brazil, and Argentina. In the actual implementation process, which country had the greatest integration difficulty? And which country showed the most significant improvement in local clearing speed?

Maggie: We have integrated into quite a few countries in Latin America. The real difficulty does not lie in the integration itself; the true challenge is in the preparatory phase. During the technical integration phase, countries like Mexico and Brazil have relatively well-developed financial systems and are developing very quickly. For example, in Mexico, we have integrated their local payment system, SPEI, and in Brazil, we have integrated the PIX payment system, and Argentina has also integrated its local payment network. Overall, the integration work in these countries has gone relatively smoothly, but a lot of preparation is needed for compliance before starting these technical integrations.

Currently, Colombia presents the greatest integration difficulty. The banking system in Colombia is relatively weak, and the clearing efficiency is low; the feedback or information provided by banks is also quite insufficient. Additionally, tax issues in Colombia are complex, with many details to handle. When we make payments, these transactions are recorded, and each country has different tax requirements. In Colombia, these issues are more complicated than in other countries.

Cat Brother: How significant is the improvement in their clearing speed?

Maggie: Systems like PIX and SPEI actually provide second-level settlements, which are very fast. Overall, Brazil and Mexico have relatively well-developed financial systems, so their clearing speed improvements are also quite noticeable.

Popularity and Market Acceptance of Stablecoins

Cat Brother: Since many Chinese readers may not be very familiar with the Latin American region, I would like to ask you more questions about it. For example, what is the situation regarding the popularity of local stablecoins in Latin America? I remember reading a report that stated USDT has the highest penetration in Argentina due to the region's long-standing high inflation.

Aside from Argentina, how is the popularity of stablecoins in other regions? Are local businesses also choosing to use stablecoins? If businesses use these stablecoins for asset management, what are the main applications? Is it for settlement, payroll, or supply chain payments? Could you provide us with an overview of the situation regarding stablecoins in Latin America?

Maggie: Argentina indeed has a relatively high usage of stablecoins, both among businesses and individuals, with a penetration rate much higher than in other countries, especially due to Argentina's inflation issues. What you mentioned is correct, but stablecoins have not reached the level where you can use them in any store, as Argentina's financial infrastructure is not yet fully developed. Overall, the market share of stablecoins in Argentina is high, but it is still relatively dispersed.

As for the entire Latin American region, whether in Mexico or Brazil, the awareness and usage of stablecoins are changing every month, especially compared to last year and this year, with significant growth. I believe that overall, Latin America is rapidly developing in the adoption of stablecoins, particularly in terms of individual and corporate acceptance and usage.

In terms of usage scenarios, individuals have several reasons. One is that when others make payments, they may directly use stablecoins, which helps everyone understand what stablecoins are and start holding them. Another reason is to avoid losses caused by fluctuations in the local currency; many people convert their local currency into stablecoins. Additionally, there are some scenarios in Latin America, such as using crypto cards. Individuals deposit stablecoins into the card and then use it for purchases with Visa or MasterCard, which is also a common application scenario.

For businesses, the usage scenarios for stablecoins are even broader. For example, corporate fund allocation. When businesses allocate operational funds between different countries, transactions through banks are usually inefficient, while using stablecoins can significantly improve speed. Moreover, businesses can use stablecoins for payroll, vendor payments, and even advertising expenses, providing convenient solutions. We currently have over a dozen different types of clients, each with different stablecoin usage scenarios. I have also noticed a trend where more and more businesses are starting to incorporate stablecoins into their financial systems and begin reporting taxes, which is also a step forward.

Our clients are now starting to engage in global asset management. Our enterprise-level wallet gives clients more confidence to hold stablecoins long-term rather than frequently exchanging them. This trend indicates that the use of stablecoins is becoming more long-term, and our role has shifted from merely facilitating fiat currency inflows and outflows to providing diversified services such as custody and asset management for businesses.

Cat Brother: In your impression, what is the overall preference for stablecoins in the Latin American region? For instance, is there more usage of USDT or USDC? Or do people also use other stablecoins? Recently, algorithmic stablecoins like USDe have been gradually emerging in the crypto world, but I am not sure if people still prefer to use the more common USDT or USDC in practice?

Maggie: Yes, about 80% to 90% of our clients use USDT. The number of clients using USDC is gradually increasing, but we have hardly heard of anyone using other stablecoins. Some countries occasionally use PayPal's stablecoin, especially users with PayPal accounts, but aside from that, USDT still holds an unreachable market share in Latin America. In the U.S., the usage rate of USDC has increased significantly compared to before, but in Latin America, USDT still occupies an absolute market share.

The Future of Stablecoin Financial Products

Cat Brother: Recently, I have seen many exchanges launching financial products related to stablecoins. Are you currently involved in this business? For example, do you advise or help businesses allocate stablecoins as company assets for financial management?

Maggie: We hope to provide such financial products in the future, but we have not launched them yet. From a product perspective, it is not difficult for us because we have years of experience in the industry and are skilled in this area. Why haven’t we done it yet? First, when we initially engaged with clients, I found that they still had certain concerns about stablecoins, especially when it comes to using stablecoins or engaging in stablecoin financial management; corporate clients need time to build trust. If we were to offer financial products at this time, they might be sensitive and worry about why we want them to keep their funds on our platform. Therefore, we have tried some proof of concepts (POC), but after in-depth communication with clients, we decided not to launch such products for the time being.

We believe that addressing client pain points is our priority. When clients have enough trust in us, more funds will naturally settle on our platform, and only then will we consider launching financial products. Currently, our clients have already settled more and more funds on the platform, but we hope to provide such financial products in the future based on compliance. We have conducted extensive research on the relevant licenses; financial products require different compliance licenses, and we do not want to launch products casually. We hope to provide more diversified products for clients after thorough preparation.

Cat Brother: Understood. You also mentioned multiple times the interaction with the banking system. In Latin America, are you complementary to traditional banks, or are you competitors? If a business or individual were to operate entirely without banks and only use your products or stablecoins, could they rely solely on stablecoins for their personal life or business operations?

Maggie: That’s an interesting question. It is quite difficult now, but it is our goal for the future. We hope that in the future, all transactions can be completed in a stablecoin environment, avoiding the friction of frequently converting between fiat and stablecoins. Currently, we are primarily focused on cross-border payments, and we are also advancing local payments. We hope that in daily life, whether it’s person-to-person, person-to-business, or business-to-person, payments can be completed using stablecoins to reduce friction.

As for our relationship with banks, we are more like partners rather than competitors. We carry different missions and responsibilities; banks usually serve as our "first and last mile" supporters in international payment processes. We use stablecoins and blockchain technology to complete international transactions, while banks do not fully rely on these technologies. We are not replacing banks themselves but rather the traditional cross-border payment system, SWIFT, which is not used by every bank. Therefore, I believe we do not compete with banks; in fact, many banks are willing to cooperate with us, especially crypto-friendly banks, because we deposit a significant amount of funds in these banks, which need capital reserves and hope clients keep their funds in the bank, and we have achieved that.

So, our relationship with banks is one of cooperation rather than competition.

Regulatory and Localization Challenges in Latin America

Cat Brother: In the process of applying for licenses and localization, which country has been the most challenging for you? Have you encountered any pitfalls, or can you share a story about this review process?

Maggie: OK, I think it should be Mexico because it was the first country we landed in. In 2020, when I just arrived in Latin America, I was not very familiar with the market and needed some time to learn, including building a team. I think the most time-consuming and difficult part was applying for the first license. Moreover, since it was the earliest, the entire compliance framework had not yet been established.

You see, Argentina will only launch a new license in 2024, and Brazil still does not have a license, but Brazil will have one soon, so we are also preparing to apply. In the early days, without a license, banks were reluctant to cooperate with you because they did not want to take that risk. So, for the first two or three years, we mainly focused on refining these matters, including building compliance frameworks and risk control, which required a lot of preliminary preparation. Mexico should be the most challenging part of our entire license application and localization process, but all of that is behind us, and the experience we have accumulated over the years is very helpful for our future expansion into other countries.

Cat Brother: Besides your internal preparations, did you face any difficulties from regulatory authorities during the license application process? Or did they have doubts or distrust regarding stablecoins due to a lack of understanding? Did such situations occur?

Maggie: Difficulties were not too severe. My own experience is that there may be some stereotypes about Latin America, such as asking if it is dangerous or whether doing business there requires engaging in some improper transactions. In fact, these are the most common questions I encounter. However, I have been in Latin America for five years and believe I can help dispel some myths about the region through this interview. First of all, Latin America is not as dangerous as people think; it depends on where you go. I think the core financial districts of major cities are quite safe. For example, in Mexico City, I have no problem walking around and dining as a woman.

However, if you go to remote areas, such as those near the U.S.-Mexico border, there are indeed some places that are unsafe, but I haven't been there and wouldn't dare to go. As for regulation, one of the reasons I chose to start a business in Latin America is that I have had contact with regulatory agencies there, and I find them to be much more professional than I had imagined, even comparable to U.S. regulators, but friendlier and more open. They are not as strict and welcome foreign investors like us, knowing that our capital injection can help them develop. So, in terms of attitude, they are very friendly and inclusive, which is one of the reasons I like Latin America.

When communicating with regulators, I haven't encountered any difficulties. Latin America is more culturally inclusive than the U.S. I have lived in the U.S. for over 20 years and still encounter some random discrimination or unfair treatment because I am Chinese. However, in Latin America, people are very friendly towards Chinese and Asians, seeing you as someone who brings capital and advanced ideas to help them grow.

Starting a business in Latin America, especially in compliance-related areas, indeed requires more patience. The understanding of these emerging matters by Latin American regulators takes time, so you need to communicate and explain repeatedly with them. It's not about creating difficulties; they just need to ensure the safety of financial products, especially in terms of anti-money laundering (AML), to ensure that the source and flow of customer funds do not violate national financial laws. So this part is understandable, and we also need to manage our clients rigorously.

Overall, although the process is challenging, we always adhere to compliance and strive to provide safe services for our clients. For those planning to start a business in Latin America, I advise being cautious and discerning about the resources that can truly help you land. Latin Americans can cleverly package themselves, and sometimes you might feel that everyone is very capable, but that's not always the case. So, take more time, be patient, and avoid unnecessary risks.

Entrepreneurial Experience and Cultural Adaptation in Latin America

Cat Brother: As a founder primarily operating in Latin America, do you fly around to various countries, or can you handle things online from Mexico City?

Maggie: I still need to fly around, but I fly to Mexico the most. I have also been to Brazil and Argentina. First of all, I am very interested in Latin American culture, and I enjoy traveling and experiencing different cultures. Since I am starting a business in Latin America, I think it is important to understand the local context, whether it’s the people or the businesses, and to immerse myself in them. So I have spent quite a bit of time there and have visited countries like El Salvador and Panama. I also welcome everyone to come and explore Latin America because I think it is a great travel destination with rich food and beautiful scenery. At the same time, Latin America is also a very good place for entrepreneurship because the language is not too complex; Spanish and Portuguese cover most of the region, so many entrepreneurs expand into multiple countries.

Relatively speaking, I find Brazil to be a bit more dangerous than I had imagined, which is something to remind everyone about. I initially thought Brazil was similar to Mexico, but after arriving in Brazil, many locals warned me not to use my phone on the street and provided some safety education. Although I personally did not encounter any issues, I still want to remind everyone to be more cautious about safety when going to Brazil. As for Argentina, it is my favorite country; its culture combines both Latin American and European elements, and Argentina's financial system offers many opportunities for our business.

Cat Brother: As a practitioner, how do you view the stablecoin legislation in the U.S. and Hong Kong? What are your business layout and plans for these markets in the future?

Maggie: I believe that the legislation in the U.S. and Hong Kong is a huge boon for us industry practitioners; it is good news we have been waiting for years. We have always been very focused on compliance and have done a lot of work at the application level, and we look forward to these developed countries introducing relevant laws to support the development of our industry. I think these stablecoin laws are beneficial not only for practitioners but also have a positive impact on society and the world. They have drawn media attention to stablecoins, built confidence among more businesses in stablecoins, and led to more companies choosing stablecoins as a payment and storage method. Overall, the introduction of these laws greatly aids our business growth.

Cat Brother: Will you also expand your business in regions like Hong Kong in the future? Are you already applying for licenses? If so, is it currently under review?

Maggie: Yes, we have been expanding our business in the U.S. and Hong Kong since last year. At this stage, we are still collaborating with some licensed compliance institutions, and we do not yet have our own licenses in the U.S. and Hong Kong. However, we hope to have more presence in these countries and regions in the future. In the U.S., we are indeed applying for licenses in all 50 states, which will take some time. In Hong Kong, since there is currently no specific license for our industry, we have not entered the application stage yet, but we will continue to monitor and learn. The U.S. and Hong Kong are both very strategically significant markets for us because the economic exchanges between Asia and Latin America, as well as between the U.S. and Latin America, are very active, and the market is vast. We already have a solid foundation in Latin America and hope to further expand our business in countries with close economic ties to Latin America.

Challenges and Development of Stablecoin Popularity in Different Regions

Cat Brother: What do you think are the challenges to the popularity of stablecoins in different regions? Which markets do you plan to focus on breaking into in the future?

Maggie: I think there are several major categories of challenges. The first is user education. As we mentioned earlier, the entire stablecoin legislation, including Circle's listing, has helped educate the market and users to some extent, but it is still not enough. I believe that in today's world, 90% of businesses and individuals are still not using stablecoins; they are still in a learning and observation phase and need more time to recognize and accept stablecoins as a payment method.

The second challenge is compliance. Today, there are still very few countries with laws related to stablecoins, or even fewer with licenses related to cryptocurrencies. I believe that in the next 5 to 10 years, we will see more and more countries and regions introducing corresponding compliance frameworks and licenses for stablecoins or cryptocurrencies. I think this will happen, and only when the compliance framework matures can companies like ours land more widely and deeply.

The final challenge is in infrastructure, specifically the inadequacies in technology and product levels. Companies like ours are relatively fortunate because we have more opportunities to practice diverse products under regulatory systems in Latin America and the U.S. For example, we not only have enterprise-level wallet custody services but can also implement multi-currency accounts, including fiat and stablecoin accounts. At the same time, we can provide third-party payment services to help clients without local entities with collection and payment; we can also facilitate stablecoin acquiring, receiving, and payments. These services may seem taken for granted, but in Asia, banks do not allow you to implement these, or they are simply not feasible under the regulatory framework.

This is actually a trend for the future. I believe that as compliance frameworks improve, more mature products will emerge. Only when these underlying financial infrastructures become more robust can we provide more opportunities for businesses and users to use stablecoins.

VelaFi's Future Business Strategy and Product Planning

Cat Brother: You have mentioned Circle's listing multiple times, and it seems you were also an early design and co-creation partner of the Circle network. Are there any specific rules or interfaces from Circle that you have promoted and are still using this year? Additionally, after Circle's listing, the stock price surged significantly, and many Wall Street institutions have been buying in continuously. How do you view this phenomenon? Why Circle? I remember that within three days or a week of the listing, the stock price multiplied significantly. Do you think traditional capital is starting to like the stablecoin space? What impacts does this have on you, and can you share with everyone?

Maggie: Yes, we are Circle's first and only design partner in Mexico. In the early stages of building this payment network, we participated in many integrations and discussions, with the most discussed topic being the "travel rule," which is something we have consistently used in our products. So I think this is a very good attempt, exploration, and execution.

Joining the payment network has greatly improved our efficiency, allowing us to connect faster with other global payment networks and gateways, which enables us to use parts of Circle's payment network not only in Latin American countries but also in regions like Hong Kong. Other countries and regions will also use these channels through us, which feels like a very good network collaboration.

Circle's listing is very exciting news for our entire industry, attracting a lot of client attention, with many clients reaching out to us and being more willing or open to using stablecoins. At the same time, the increase in Circle's stock price is also quite reasonable, although it may eventually pull back. I was particularly impressed that two or three weeks before the listing, I went to New York, and Circle's CEO and team invited us to a closed-door meeting when they had just moved into the new World Trade Center. During the meeting, we discussed the global stablecoin market share, and the CEO mentioned that stablecoins only accounted for 0.3% of global M2, which is less than 1%, with the market cap of stablecoins being around $200 billion.

If we assume that the share of stablecoins in global M2 grows from 0.3% to 10%, you can imagine how much change that growth would bring. I believe Circle has that ambition; they hope the market share of USDC can grow tenfold or a hundredfold, which would mean a corresponding increase in market cap. Of course, such growth will not happen overnight; the stock market always experiences fluctuations, especially as it develops through different expectations. I am not suggesting stock market investment; I am merely expressing expectations for significant growth in the stablecoin market in the future.

VelaFi's Future Focus: Compliance Expansion and Product Innovation

Cat Brother: What is the current strategic focus of your company? What are the top three things you want to push forward in the coming year? Are there any new product releases you can share with everyone?

Maggie: As I mentioned earlier, our strategic focus is on the U.S. and Asia because we have already been in Latin America for five years and have entered a relatively mature and stable trajectory. The next focus is to expand into the U.S. and Asian markets, which include not only Hong Kong and Singapore but also Japan and Southeast Asia—not just a specific country or region, but the entire Asia-Pacific region. We hope to bring our brand to these Asian users, increase exposure, and let everyone know that there are companies like ours in Latin America, while also highlighting the advantages of being a Chinese entrepreneur in Latin America.

We are the only Chinese founding team in this sector in Latin America, and there are many Asians doing business in Latin America. Culturally, we are very compatible and can understand customer needs immediately, better serving them and helping them establish themselves in Latin America. Our goal in Asia is to introduce Latin American products and services to Asian clients, especially if they have business interests in Latin America, they can come to us.

The next three things are: First, the expansion of compliance and licensing. For example, in the U.S., we are applying for licenses in all 50 states. Although we can use other licenses or channels, we believe that having our own licenses will provide a better customer experience and avoid time losses due to compliance challenges. We hope to provide integrated services and deeply advance compliance in various countries.

Second, we aim to enhance our settlement and clearing capabilities. We hope to build faster payment channels with more local banks to improve liquidity and optimize customer experience and pricing.

Finally, we hope to diversify our product matrix. Currently, we offer enterprise custody, payment, and local payment services. In the future, we will launch stablecoin collection and payment products, primarily helping clients convert fiat currency into stablecoins or make stablecoin payments in fiat. We also hope that stablecoins will become a core tool for everyday financial activities. For example, providing e-commerce clients with the ability to directly receive stablecoins, reducing the need for fiat currency conversion; offering stablecoin loans to clients to avoid the impact of local currency fluctuations on returns.

These new products are currently under development, and we already have clients testing them with positive feedback. We aim to replace some scenarios and applications in traditional finance with stablecoins as much as possible.

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