August 1, 2025 • 26 mins
Emmanuel Daniel is a global thought leader, author, and advisor on the future of finance, geopolitics, and their impact on business and society. He was named a top 10 global influencer on the Fintech Power50 list in 2021 and 2022, and is the founder of TAB Global, which operates platforms like The Asian Banker, Wealth and Society, and TABInsights. Emmanuel works closely with corporate and government leaders, advising on strategy and facilitating high-level planning workshops around the world.
His book, The Great Transition: The Personalization of Finance is Here (2022), explores how technologies such as blockchain, crypto, and gaming are reshaping finance. Featuring forewords by former Congressman Barney Frank and financial innovator Richard Sandor, the book provides a roadmap for disruptors in the financial industry. Emmanuel is also a frequent commentator on BBC, CNBC, and Bloomberg, and was awarded the Citibank Excellence in Business Journalism Award for Asia in 1999.
With a legal background and degrees from the National University of Singapore, University of London, and studies at Columbia University, Emmanuel brings a global perspective to his work. A former member of the Entrepreneurs’ Organization and an avid model train enthusiast, he has traveled to over 130 countries and splits his time between Singapore, Beijing, and New York while working on his next book, The Winning Civilization.
During the show we discussed:
- What’s happening with crypto and stable coins
- How stable coins impact the US dollar
- What the Genius Act means for you
- New crypto giants emerging from stable coin growth
- Why the US central bank won’t regulate crypto'
- What to know about alt coins and staying safe
- Credit profiling through business transactions
- New credit scoring methods for businesses
- What’s changing in peer-to-peer lending
- Digital data now used in lending decisions
- Lenders using lifestyle data to qualify you
- How friends, shopping times, and habits affect borrowing
Resources:
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to the Business Credit and Financing Show.
Each week, we talk about the growth strategies
that matter most to entrepreneurs.
Listen in as we discuss the secrets to
getting credit and money to start and grow
your business.
And enjoy as we talk with seasoned business
owners, coaches, and industry leaders on a variety
(00:22):
of topics from advertising and marketing to the
nuts and bolts of running a highly successful
business.
And now, to introduce the host of our
show, financial expert and award-winning author, Ty
Crandall.
Hello, and thanks for joining us today.
I'm super excited you could be here.
Look, today we're talking about really global finance
trends you need to know about.
(00:42):
We're talking about the important stuff.
Like, a lot's happening right now with crypto
and stable coins, and a lot of things
are happening even within the U.S. government
around this.
A lot of things are also happening regarding
credit profiling, especially businesses, and so many other
topics that we really need to know more
about.
So, in order to dive in, I brought,
ultimately, the foremost expert on this topic, Emmanuel
Daniel.
(01:03):
Now, Emmanuel's actually a global thought leader, an
author, and advisor on the future of finance,
geopolitics, and their impact on business and society.
He was named the top 10 global influencers
on the FinTech Power50 list in 2021 and
2022, and is the founder of TAB or
TAB Global, which operates platforms like the Asian
Banker, Wealth & Society, and TAB Insights.
(01:25):
Emmanuel works closely with the corporate and government
leaders, advising on strategy, and also facilitating high
-level planning workshops all around the world.
Now, his book, The Great Transition, The Personalization
of Finance, is here in 2022.
It explores how technologies such as blockchain, crypto,
and gaming are reshaping finance.
Now, featuring forewords by former Congressman Barry Frank
(01:48):
and financial innovator Richard Sander, the book actually
provides a roadmap for disruptors, and especially in
the finance industry.
Now, Emmanuel is also a frequent commentator on
BBC, on CNBC, and Bloomberg as well, and
was awarded the Citibank Excellence in Business Journalism
Award in Asia back in 1999.
(02:09):
Now, with a legal background and degrees from
the National University of Singapore, University of London,
and studies at Columbia University, Emmanuel brings a
global perspective to his work.
He's also a former member of the Entrepreneurs'
Organization, an avid model-trained enthusiast, and he
also has trained over 130 different countries and
(02:29):
splits his time between Singapore, Beijing, and New
York, while working on his next book, The
Winning Civilization.
Emmanuel, thanks for joining us today.
Hi, very happy to be on your show,
and you did that all in one breath.
Well, that's fantastic.
Thank you very much.
Yeah, I gotta tell you that you have
a lot of experience in global finance, so
I'm really glad you could hear, because there's
just so many trends developing and happening right
(02:50):
now that really affect us as entrepreneurs, and
one of the which, which is the foremost,
is what we're seeing in cryptocurrency.
So, here in the United States, we had
Crypto Week.
There's so many things that are happening right
now within the government with changes that are
being made, and a lot of us don't
know how that affects us as business owners,
so I kinda wanna start there.
What do you see happening right now with
crypto around the world, and especially, what are
(03:12):
you seeing here in the United States?
The United States today is the center of
gravity of what's happening in crypto.
The Genius Act just got passed, and there's
clarity in the use of stablecoins.
The U.S. had been somewhat of a
laggard in the last four to five years.
A number of other jurisdictions, everything from London
to Dubai to Singapore to Hong Kong had
(03:32):
moved ahead on the crypto front.
So today, the big topic is stablecoins, and
I think that there's great clarity in the
U.S. about how financial institutions or licensed
institutions can issue their own stablecoins, and so
the door is now open for every American
bank to issue their own stablecoins, and this
comes at the same time as the U
(03:54):
.S. had effectively banning the issuing of central
bank digital currencies.
In fact, on that front, it was China
that had been leading the world in trying
to get central bank digital currencies into commonplace,
but there were a lot of doubts about
that because the whole idea is that if
the central bank knows where the tokens are,
(04:15):
they would know where you spend it, who
you are, all that stuff, and I guess
Congress has made it very clear that they
don't want that kind of tracking in the
use of money.
Stablecoins is different.
Just to make it into a capsule so
that your audience would probably appreciate better is
that stablecoins are basically cryptocurrencies backed by real
(04:37):
money at the back end, and it's always
a dollar for dollar.
So if you're using a dollar's worth of
stablecoins, it has to be backed with a
dollar's worth of either treasury bills or cash
in the bank.
So whoever's issuing stablecoin needs to make sure
that it's backed by real fiat money at
the back end.
(04:58):
Now, what this enables banks to do is
to what I call tokenize their deposit base.
So just imagine this, the average bank in
the US, whatever they have in their deposit
base, which is real money, that's the money
that you put into the bank, they turn
it into a digital token, a stablecoin, which
(05:18):
you then can use and pay somebody, and
that person can have that paid into someone
else's account and then claim it against cash,
anything of that sort.
Already globally, of all the stablecoins that have
been issued, it's almost coming up to a
trillion dollars now.
80% of that is dominated by two
(05:39):
non-banks in the US.
One is Circle, and the other is Tether.
And between the two of them, they dominate
about 80% of the stablecoin marketplace globally.
So what's interesting here is your audience were
asking questions like, will the US dollar continue
to dominate global trade and global investments?
Well, you have the answer here, which is
(06:00):
that if so much of stablecoins around the
world is going to be denominated in dollars,
then the US dollar will continue to have
an effect.
And in fact, because US law requires stablecoins
to be backed up by liquid assets like
treasury bills, it also enables US treasuries or
US debt to be invested in by foreigners
(06:22):
and anyone who uses a stablecoin.
So when you use a stablecoin, you're actually
using an asset that is backed by US
treasury, the backend.
So what's happening here is exciting in that
it's actually extending the relevance of the dollar
as a dominant global payment device from the
physical realm into the digital realm.
(06:44):
And stablecoins is the banking regulated version of
cryptocurrencies.
So if you don't trust Bitcoin or any
of the other cryptocurrencies that are out there
in the marketplace, just because they're not backed
by any underlining asset, well, stablecoins are backed
by underlining asset and carry the face value
(07:04):
of a dollar for a dollar.
Now, this has many ramifications around the world.
When you look at the usage of stablecoins
globally, there are essentially three usage, big usage.
One, by traders who want to trade in
foreign exchange and buy and sell crypto, they
need stablecoins as an on-ramp, off-ramp
(07:25):
device.
In other words, if you're moving in from
cash to crypto, you need to buy stablecoins
in order to buy a crypto, things like
that.
Now, second is that around the world, there
are millions of small businesses that have previously
not had access to bank accounts.
And even if they had access to bank
(07:46):
accounts, they needed to, they had so many
restrictions on who they could trade with, where
they could send money to, the access to
dollars or foreign currencies in order to pay
each other and so on.
And stablecoins solve all of that for the
average trader anywhere in the world.
And so there are literally millions of small
(08:06):
businesses around the world that are coming on
stream into the digital world and being able
to trade, buy, sell from each other by
using stablecoins.
We don't even know what the size of
this community is today, but it's definitely growing.
It's much smaller than the investment community, but
it's getting its own traction as it goes
(08:27):
along.
And then the third is, of course, the
banking system itself.
When you think about payments in the banking
system, banks have always had historical problems with
their technology infrastructure, with their communication with other
banks, with regulation, whole series of restrictions and
infrastructure problems that they have in just making
a simple payment possible.
(08:49):
And today with stablecoins, it's instant, it's 24
-7, and it provides its own liquidity, meaning
that a bank doesn't run into the risk
of not having enough money to pay the
other guy, you know, that kind of thing.
So there are profound number of changes taking
place in finance today just by what's happened
in the US in the last two weeks.
So what do you think?
(09:10):
What's with this, with stablecoins, and is that
the Genius Act that's really making this spin
with stablecoins here, at least in the US?
Well, the Genius Act provides clarity about who
can issue stablecoins, what they need to do
to be compliant to regulation, and also the
users of stablecoins that it won't be used
(09:30):
for money laundering and all of that.
So they put in place the regulation required
for that clarity.
Before the Genius Act, there were a few
issuers, they even wished that they were regulated,
but regulators themselves weren't sure which of the
regulators.
You have the OCC, you have the CFTC
in Chicago, you have SEC and so on,
(09:53):
all taking different positions as to what a
crypto or a stablecoin should be.
But now you have a unified legislation that
provides much better clarity and has set the
stage to go.
What we're going to see in the next
six months to a year will be nothing
less than profound as we start to see
different players already, in addition to the two
(10:13):
major global dominant players, and they are both
American.
You have the banks issuing their own stablecoins
and they're trying to get into the market
to dominate that industry.
So you're gonna have a Citibank stablecoin, you're
gonna have a Bank of America stablecoin.
And when the banks start acting that way
and they start going into digital money, the
competitive advantage between the different players is no
(10:36):
longer the interest rates that they give on
the bank deposits.
They can give the lowest possible interest rate,
but if your stablecoin has got a little
bit more functionality than the next stablecoin, you'll
probably be more popular and more users will
come in to use your stablecoin.
And what are the functionalities that they need
to have?
Interoperability, that's the number one functionality.
(10:56):
In other words, whether I paid it into
JP Morgan or Bank of America or non
-bank, it should be accepted.
It should be convertible to other cryptos.
The platforms on which you buy and sell
cryptos should recognize your stablecoin and that you
yourself as an institution should be trustworthy.
So that's what the Genius Act makes, provides
(11:18):
the legal infrastructure for all of that to
happen.
How does this affect other coins out there
like Bitcoin?
Like, what do you think that this introduction
and push of stablecoins will do to everything
else that's out there?
Something that's not been said by a lot
of people I follow is that it just
makes the ordinary person comfortable and familiar with
(11:39):
cryptocurrencies.
If you can trust the stablecoin to make
your transaction possible to your aunt out in
Texas or something, and it's done instantly on
your phone without an intermediary, if you can
trust the stablecoin to do that, you can
trust Bitcoin.
So the first effect I would say is
that it just increases the number of people
(12:02):
who have been doubters up to this point
to become familiar and comfortable and native to
cryptocurrencies in general.
Then the next question you're gonna ask is
which of the cryptocurrencies are gonna do well
and why?
Stablecoins don't make you rich.
They are required by definition to carry the
value that they propose, which is if it's
(12:25):
a dollar's worth of stablecoin, that's all it's
ever going to be.
But if it's a dollar's worth of Bitcoin,
you're just hoping that day after tomorrow it's
going to be $3 or $5.
So stablecoin, the function is not to be
an asset in itself, but it's a modern
payment device, which is well within your control.
And actually this is exactly what I had
been talking about two years ago when I
(12:46):
published my book, The Personalization of Finance is
Here.
The most important consideration or use of stablecoin
in the crypto world is, as I said
just now, an on-ramp, off-ramp, meaning
that if you have stablecoins, you can go
in there and buy whatever crypto that you
want.
And the reason you buy any of the
other cryptos are very different from the reasons.
(13:07):
And now a quick break to hear from
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(13:28):
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Why you would use a stablecoin.
Stablecoin, just for payment, digital payment, and instant
payment.
Bitcoin, the reason you'd invest in a Bitcoin
is totally different from why you'd invest in
a Ethereum, for example, or a Solana, Pezos.
All of these Bitcoins have different purposes.
(13:50):
They have a functionality that they're trying to
promote.
So some of them it's interoperability, some of
them it's foreign exchange and energy conservation.
A whole range of different functionalities that each
of these cryptos were designed for.
So you almost have to be technical to
understand or appreciate which ones you want to
use.
Bitcoin is the most popular and best understood
(14:13):
because although it doesn't have as much functionalities,
because it is a trusted token, it today
behaves like a digital version of gold.
It is issued in limited quantities.
It's got a code that cannot be broken.
It is not issued by any one institution
and there's enough of Bitcoin going around to
(14:35):
provide its own liquidity.
So it's created a credibility for itself in
the network world that never existed before, 2006,
2007.
And then it's just introduced a whole new
asset class.
Everything else in the crypto world are still
evolving.
Ethereum is the base on which a lot
(14:55):
of crypto-based infrastructure, telecommunications, networking functions
created.
And then you have another category called altcoins,
which alternative coins they call them.
And it can be issued by anybody.
And that's another dimension altogether that you and
I can issue our own cryptocurrency and it
(15:16):
will be valued to the extent that your
friends or my friends accept the value that
you provide to it.
So when Sam Bankman-Fried issued his own
coin and he said it's $180, he had
a market that trusted it was $180 and
traded in it.
And then he used that value, borrow money
from a bank that he bought and then
(15:36):
it cascaded into a huge fraud.
So the big problem with altcoins is that
because anybody can issue an altcoin, I mean,
President Trump just issued his own altcoin at
the time of his inauguration.
So, and as long as it's a willing
buyer, willing seller, it's a traded commodity, it
will be valued by the market.
(15:57):
It can lose its value just as easily
as it gains its value.
That's a whole new dimension.
And it provides and it presents a lot
of risks that investors today are not familiar
with yet.
So we have got cryptocurrencies, we've got stable
coins, and then we've got altcoins.
And each of them have to be seen
separately for what they function.
(16:18):
And because this whole dimension is so new,
regulators are scrambling in trying to figure out
how they should regulate it, not necessarily impede
the evolution of finance in technology or technology
in finance, and at the same time safeguard
the end user, especially the mom and pops,
which moms and pops who really don't understand
(16:39):
any of this stuff and worried about if
they bought a token, whether it's fraudulent and
used for fraudulent purposes and all that.
We are in a changing world right now.
We need to understand how payments is evolving,
how assets are being defined digitally, and what
the different tokens do.
So a frontier territory.
Yeah, a lot's happening.
(17:00):
And I'd love to talk more about this,
but you mentioned something before we got started
that I really wanted to dive into because
you were also talking about credit profiling for
businesses, which is really a big important thing
for us in the United States.
So to switch a little bit, when you
talk about credit profiling for businesses, what is
changing?
What is happening in that world right now?
Hi, let me tell you this.
(17:20):
I'm so excited that small business is finding
new ways in which to finance, to be
financed by using data that was previously not
accessible and not usable.
And it's not just the United States, it's
countries around the world, destitute countries where you
(17:40):
couldn't trust the data or the balance sheet
of a small business.
Therefore, you just couldn't give credit to small
businesses.
And in the U.S., at least the
lowest 20% of the small business world
don't have access to credit simply because they're
not profiled in a way that takes into
account the real value of the business.
(18:02):
Traditionally, both businesses and individuals are profiled by
BICOR, Experian, and so on.
But that information that they use is historical,
is static, and it doesn't tell you the
real value of the business going forward.
And historical data is the worst data to
profile any business on because you're looking at
(18:23):
the potential of a business to go bankrupt
yesterday.
But it may be coming through today, but
you don't have that data.
But today, what's going on is that in
a number of parts of the world, in
Brazil, in China, even in countries like the
Philippines and Vietnam, banks plugging right into the
point of sale of small businesses to have
(18:45):
access to the cashflow of the business and
provide financing right there into the business itself.
In countries like Japan, and now some of
the Japanese corporations extending the way in which
they value the small businesses that function as
a supplier to a large corporation.
So there's a supply chain element involved in
(19:06):
there.
In other words, these small businesses would not
exist if they weren't part of a supply
chain to a mega corporation, auto manufacturer, for
example.
And their cashflow is really based on the
sales orders that they get from the large
corporation.
And by having access to those sales orders,
the banks can now give credit to the
small corporations.
So it's all about digitizing the transactional data
(19:29):
and then monetizing it by providing credit the
back end, back of it.
And because all of that is done digitally,
you can even throw in insurance on small
business lending.
And I know for sure there are credit
rating agencies in the U.S. which are
trying to get funding for financing small businesses
through cashflow financing and digitized cash cashflow financing.
(19:50):
And how does this affect peer-to-peer
lending?
Ah, the world of peer-to-peer lending
is coming back.
When peer-to-peer lending first started, the
theory of it was noble, which is the
platforms provided the opportunity for borrowers and lenders
to meet each other.
And the platforms themselves don't take the credit
(20:12):
because the lender decides for himself who he
wants to lend to and connects directly with
the borrower.
A bank, on the other hand, takes the
money from the lender as deposits, and then
on its own balance sheet decides who to
lend to.
So that's a bank.
And a peer-to-peer lender doesn't take
that responsibility.
They match the lender and the borrower.
(20:34):
But somehow along the way, both the technology
and the community of borrowers and lenders didn't
quite gel with each other.
The lender couldn't figure out the credit profile
of the borrower, and the platforms didn't want
to take the responsibility.
So there were lots of incidences of fraud
and all of that.
(20:55):
But today with AI and with a lot
more data analytics, lenders have got an incredibly
more access to data about borrowers, and they
can also function as community of lenders to
borrowers.
In other words, if somebody wants to buy
a house, he doesn't need to borrow from
just one person.
He can borrow from 10 lenders who basically
(21:16):
spread the risk between them.
And the role of the platform also improves
because they become like credit bureaus.
They provide a credit profile of the borrower
and so on.
So I see a resurgence of peer-to
-peer lending driven by AI and by data
analytics.
(21:36):
So what are you seeing with this new
way of using digital data to make decisions
about borrowers?
What are you seeing be used information-wise
that kind of wasn't really as popular being
used before?
Well, for one thing, we have more data
points than we ever had before, and especially
of sub-scale or sub-prime, they call
(21:58):
them, borrowers.
It's not the A-rated borrowers who are
totally transparent, who have their accounts audited professionally
and all of that.
It's the sub-scale borrower or the high
-risk borrower who doesn't have enough data about
himself.
And today we now go into all kinds
of lifestyle data, which sometimes gives us a
(22:20):
better profile than static data.
So if I looked at your, like in
China, there are companies like WeBank or WeCredit
and MyBank and WeCredit, right?
These are companies that look even into your
spending hours of the day.
So if you went shopping at two o
(22:42):
'clock in the afternoon, means that you don't
really have a job.
If you went shopping in the evening, it's
more likely that you've got a job and
you're shopping outside of working hours.
And then they look at your five best
friends on your mobile phone to see whether
you exist within a community of credit-worthy
friends, that kind of thing.
And that if they wanted to chase you
(23:04):
on a repayment, they know where to find
you, they know how to profile you.
So it's data like this that is enabling
a lot of non-traditional lenders.
Banks are not there yet.
Banks have one advantage which non-traditional lenders
don't have, which is they have the cheapest
source of funding and therefore they don't need
to go after the high-risk customer.
(23:25):
With the cheapest source of funding, they just
stick with the traditional borrowers who are A
-rated, whose data is trustworthy, even though it's
static and it's historical and they pay their
bills on time and all of that.
But in order to be a profitable lender,
you really need to drill down to the
higher-risk customers.
(23:45):
And that's where the problem is with information
and insights.
And today, because of the lifestyle of all
of us, our mobile phones and how we
use it and where we are tells a
lender so much more about us than ever
before.
And that's the kind of data that the
new lenders are depending on.
You may not appreciate this very much in
the US, but there are many countries around
(24:08):
the world that previously, you just couldn't lend
to somebody who lives in the barrios, in
the villages, and you don't know how to
profile him.
But now, just because he carries a mobile
phone, you know what time he wakes up,
you know who his friends are and all
of that.
So that's the kind of data that is
being made available for the lending business today.
(24:28):
Well, Emmanuel, great conversation today.
Like, there are so many, I could spend
hours talking to you because these are really
important topics, especially how this new age of
digital and AI is being used to qualify
for us for credit financing, how that affects
our ability to.
As small business owners, our ability to be
able to accept crypto and stable coins.
So there's so many things, I'd love to
(24:48):
have you back and talk to you a
little bit more.
In the interim, a lot of people watching
this want to follow you.
They're like, wow, I just learned a lot
of information I didn't know.
Where should they go?
What should they do to be able to
tap into your knowledge base and be able
to learn more about what you have to
teach?
Come look for me on emmanueldaniel.com.
That's where I put all my thoughts, the
(25:09):
links to my video.
And from there, you'll find everything else that
I do.
So just my blog, emmanueldaniel.com.
Okay, perfect.
Thanks for coming on with us today.
Thanks, Tai.
It's a fantastic time that I spent with
you today.
Thank you.
All right, so listen, if you're watching this,
go to emmanueldaniel.com.
And that's E-M-M-A-N-U
-E-L, Daniel, D-A-N-I-E
(25:30):
-L.com.
If you go to emmanueldaniel.com, this is
kind of his blog of everything that's happening.
He's got a lot of videos there.
You're able to access the Great Transition book
right at the very top of his page.
And then just take a minute, go all
the way to the bottom of the page,
and in a minute, you're able to then
subscribe to his social channels there.
And then you can get regular tips and
regular insight of what's happening.
I don't know about you, but man, I
(25:51):
just learned a lot of stuff that I
did not know.
And this is crucial stuff because as entrepreneurs,
if we're ahead of everybody else, if we
have this kind of knowledge, it really gives
us an unfair advantage to be able to
better accept crypto, for example, to better understand
why decisions are made about us, to be
able to use other digital information to make
decisions about people that we may lend to.
(26:12):
There's so many benefits you get by having
the inside knowledge of what's happening right now
and how it affects you.
And the great news is you get it
all in one place, which is emmanueldaniel.com.
So go to emmanueldaniel.com.
Make sure you grab the Great Transition book
at the top.
Make sure you subscribe to the social channels
on the bottom and then check it out.
A lot of resources there, including a lot
of really cool videos, blogs, and other things
(26:34):
that you're able to get insight about what's
happening now and into the future.
So make sure you check it out at
emmanueldaniel.com.
Thanks for tuning in.
Take care.
Have a great day.
You've been listening to the Business Credit and
Financing Show with your host, Ty Crandall.
(26:56):
Watch for our next episode to get even
more insight on financing and growing your business.
And don't forget to check us out online
at creditsuite.com for even more business growth
strategies.
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to the Business Credit and Financing Show.
Each week, we talk about the growth strategies
that matter most to entrepreneurs.
Listen in as we discuss the secrets to
getting credit and money to start and grow
your business.
And enjoy as we talk with seasoned business
owners, coaches, and industry leaders on a variety
(00:22):
of topics from advertising and marketing to the
nuts and bolts of running a highly successful
business.
And now, to introduce the host of our
show, financial expert and award-winning author, Ty
Crandall.
Hello, and thanks for joining us today.
I'm super excited you could be here.
Look, today we're talking about really global finance
trends you need to know about.
(00:42):
We're talking about the important stuff.
Like, a lot's happening right now with crypto
and stable coins, and a lot of things
are happening even within the U.S. government
around this.
A lot of things are also happening regarding
credit profiling, especially businesses, and so many other
topics that we really need to know more
about.
So, in order to dive in, I brought,
ultimately, the foremost expert on this topic, Emmanuel
Daniel.
(01:03):
Now, Emmanuel's actually a global thought leader, an
author, and advisor on the future of finance,
geopolitics, and their impact on business and society.
He was named the top 10 global influencers
on the FinTech Power50 list in 2021 and
2022, and is the founder of TAB or
TAB Global, which operates platforms like the Asian
Banker, Wealth & Society, and TAB Insights.
(01:25):
Emmanuel works closely with the corporate and government
leaders, advising on strategy, and also facilitating high
-level planning workshops all around the world.
Now, his book, The Great Transition, The Personalization
of Finance, is here in 2022.
It explores how technologies such as blockchain, crypto,
and gaming are reshaping finance.
Now, featuring forewords by former Congressman Barry Frank
(01:48):
and financial innovator Richard Sander, the book actually
provides a roadmap for disruptors, and especially in
the finance industry.
Now, Emmanuel is also a frequent commentator on
BBC, on CNBC, and Bloomberg as well, and
was awarded the Citibank Excellence in Business Journalism
Award in Asia back in 1999.
(02:09):
Now, with a legal background and degrees from
the National University of Singapore, University of London,
and studies at Columbia University, Emmanuel brings a
global perspective to his work.
He's also a former member of the Entrepreneurs'
Organization, an avid model-trained enthusiast, and he
also has trained over 130 different countries and
(02:29):
splits his time between Singapore, Beijing, and New
York, while working on his next book, The
Winning Civilization.
Emmanuel, thanks for joining us today.
Hi, very happy to be on your show,
and you did that all in one breath.
Well, that's fantastic.
Thank you very much.
Yeah, I gotta tell you that you have
a lot of experience in global finance, so
I'm really glad you could hear, because there's
just so many trends developing and happening right
(02:50):
now that really affect us as entrepreneurs, and
one of the which, which is the foremost,
is what we're seeing in cryptocurrency.
So, here in the United States, we had
Crypto Week.
There's so many things that are happening right
now within the government with changes that are
being made, and a lot of us don't
know how that affects us as business owners,
so I kinda wanna start there.
What do you see happening right now with
crypto around the world, and especially, what are
(03:12):
you seeing here in the United States?
The United States today is the center of
gravity of what's happening in crypto.
The Genius Act just got passed, and there's
clarity in the use of stablecoins.
The U.S. had been somewhat of a
laggard in the last four to five years.
A number of other jurisdictions, everything from London
to Dubai to Singapore to Hong Kong had
(03:32):
moved ahead on the crypto front.
So today, the big topic is stablecoins, and
I think that there's great clarity in the
U.S. about how financial institutions or licensed
institutions can issue their own stablecoins, and so
the door is now open for every American
bank to issue their own stablecoins, and this
comes at the same time as the U
(03:54):
.S. had effectively banning the issuing of central
bank digital currencies.
In fact, on that front, it was China
that had been leading the world in trying
to get central bank digital currencies into commonplace,
but there were a lot of doubts about
that because the whole idea is that if
the central bank knows where the tokens are,
(04:15):
they would know where you spend it, who
you are, all that stuff, and I guess
Congress has made it very clear that they
don't want that kind of tracking in the
use of money.
Stablecoins is different.
Just to make it into a capsule so
that your audience would probably appreciate better is
that stablecoins are basically cryptocurrencies backed by real
(04:37):
money at the back end, and it's always
a dollar for dollar.
So if you're using a dollar's worth of
stablecoins, it has to be backed with a
dollar's worth of either treasury bills or cash
in the bank.
So whoever's issuing stablecoin needs to make sure
that it's backed by real fiat money at
the back end.
(04:58):
Now, what this enables banks to do is
to what I call tokenize their deposit base.
So just imagine this, the average bank in
the US, whatever they have in their deposit
base, which is real money, that's the money
that you put into the bank, they turn
it into a digital token, a stablecoin, which
(05:18):
you then can use and pay somebody, and
that person can have that paid into someone
else's account and then claim it against cash,
anything of that sort.
Already globally, of all the stablecoins that have
been issued, it's almost coming up to a
trillion dollars now.
80% of that is dominated by two
(05:39):
non-banks in the US.
One is Circle, and the other is Tether.
And between the two of them, they dominate
about 80% of the stablecoin marketplace globally.
So what's interesting here is your audience were
asking questions like, will the US dollar continue
to dominate global trade and global investments?
Well, you have the answer here, which is
(06:00):
that if so much of stablecoins around the
world is going to be denominated in dollars,
then the US dollar will continue to have
an effect.
And in fact, because US law requires stablecoins
to be backed up by liquid assets like
treasury bills, it also enables US treasuries or
US debt to be invested in by foreigners
(06:22):
and anyone who uses a stablecoin.
So when you use a stablecoin, you're actually
using an asset that is backed by US
treasury, the backend.
So what's happening here is exciting in that
it's actually extending the relevance of the dollar
as a dominant global payment device from the
physical realm into the digital realm.
(06:44):
And stablecoins is the banking regulated version of
cryptocurrencies.
So if you don't trust Bitcoin or any
of the other cryptocurrencies that are out there
in the marketplace, just because they're not backed
by any underlining asset, well, stablecoins are backed
by underlining asset and carry the face value
(07:04):
of a dollar for a dollar.
Now, this has many ramifications around the world.
When you look at the usage of stablecoins
globally, there are essentially three usage, big usage.
One, by traders who want to trade in
foreign exchange and buy and sell crypto, they
need stablecoins as an on-ramp, off-ramp
(07:25):
device.
In other words, if you're moving in from
cash to crypto, you need to buy stablecoins
in order to buy a crypto, things like
that.
Now, second is that around the world, there
are millions of small businesses that have previously
not had access to bank accounts.
And even if they had access to bank
(07:46):
accounts, they needed to, they had so many
restrictions on who they could trade with, where
they could send money to, the access to
dollars or foreign currencies in order to pay
each other and so on.
And stablecoins solve all of that for the
average trader anywhere in the world.
And so there are literally millions of small
(08:06):
businesses around the world that are coming on
stream into the digital world and being able
to trade, buy, sell from each other by
using stablecoins.
We don't even know what the size of
this community is today, but it's definitely growing.
It's much smaller than the investment community, but
it's getting its own traction as it goes
(08:27):
along.
And then the third is, of course, the
banking system itself.
When you think about payments in the banking
system, banks have always had historical problems with
their technology infrastructure, with their communication with other
banks, with regulation, whole series of restrictions and
infrastructure problems that they have in just making
a simple payment possible.
(08:49):
And today with stablecoins, it's instant, it's 24
-7, and it provides its own liquidity, meaning
that a bank doesn't run into the risk
of not having enough money to pay the
other guy, you know, that kind of thing.
So there are profound number of changes taking
place in finance today just by what's happened
in the US in the last two weeks.
So what do you think?
(09:10):
What's with this, with stablecoins, and is that
the Genius Act that's really making this spin
with stablecoins here, at least in the US?
Well, the Genius Act provides clarity about who
can issue stablecoins, what they need to do
to be compliant to regulation, and also the
users of stablecoins that it won't be used
(09:30):
for money laundering and all of that.
So they put in place the regulation required
for that clarity.
Before the Genius Act, there were a few
issuers, they even wished that they were regulated,
but regulators themselves weren't sure which of the
regulators.
You have the OCC, you have the CFTC
in Chicago, you have SEC and so on,
(09:53):
all taking different positions as to what a
crypto or a stablecoin should be.
But now you have a unified legislation that
provides much better clarity and has set the
stage to go.
What we're going to see in the next
six months to a year will be nothing
less than profound as we start to see
different players already, in addition to the two
(10:13):
major global dominant players, and they are both
American.
You have the banks issuing their own stablecoins
and they're trying to get into the market
to dominate that industry.
So you're gonna have a Citibank stablecoin, you're
gonna have a Bank of America stablecoin.
And when the banks start acting that way
and they start going into digital money, the
competitive advantage between the different players is no
(10:36):
longer the interest rates that they give on
the bank deposits.
They can give the lowest possible interest rate,
but if your stablecoin has got a little
bit more functionality than the next stablecoin, you'll
probably be more popular and more users will
come in to use your stablecoin.
And what are the functionalities that they need
to have?
Interoperability, that's the number one functionality.
(10:56):
In other words, whether I paid it into
JP Morgan or Bank of America or non
-bank, it should be accepted.
It should be convertible to other cryptos.
The platforms on which you buy and sell
cryptos should recognize your stablecoin and that you
yourself as an institution should be trustworthy.
So that's what the Genius Act makes, provides
(11:18):
the legal infrastructure for all of that to
happen.
How does this affect other coins out there
like Bitcoin?
Like, what do you think that this introduction
and push of stablecoins will do to everything
else that's out there?
Something that's not been said by a lot
of people I follow is that it just
makes the ordinary person comfortable and familiar with
(11:39):
cryptocurrencies.
If you can trust the stablecoin to make
your transaction possible to your aunt out in
Texas or something, and it's done instantly on
your phone without an intermediary, if you can
trust the stablecoin to do that, you can
trust Bitcoin.
So the first effect I would say is
that it just increases the number of people
(12:02):
who have been doubters up to this point
to become familiar and comfortable and native to
cryptocurrencies in general.
Then the next question you're gonna ask is
which of the cryptocurrencies are gonna do well
and why?
Stablecoins don't make you rich.
They are required by definition to carry the
value that they propose, which is if it's
(12:25):
a dollar's worth of stablecoin, that's all it's
ever going to be.
But if it's a dollar's worth of Bitcoin,
you're just hoping that day after tomorrow it's
going to be $3 or $5.
So stablecoin, the function is not to be
an asset in itself, but it's a modern
payment device, which is well within your control.
And actually this is exactly what I had
been talking about two years ago when I
(12:46):
published my book, The Personalization of Finance is
Here.
The most important consideration or use of stablecoin
in the crypto world is, as I said
just now, an on-ramp, off-ramp, meaning
that if you have stablecoins, you can go
in there and buy whatever crypto that you
want.
And the reason you buy any of the
other cryptos are very different from the reasons.
(13:07):
And now a quick break to hear from
our sponsor.
Hey, it's Ty Crandall with Credit Suite.
Many of our subscribers wanna get the most
money to grow their business at the best
terms.
Whether you're looking for startup capital, low-interest
credit lines and loans, or business credit, we
can definitely help you.
So give us a call at 877-600
-2487, or schedule your free consultation at creditsuite
(13:28):
.com forward slash consult to see how much
money you can get approved for today.
Why you would use a stablecoin.
Stablecoin, just for payment, digital payment, and instant
payment.
Bitcoin, the reason you'd invest in a Bitcoin
is totally different from why you'd invest in
a Ethereum, for example, or a Solana, Pezos.
All of these Bitcoins have different purposes.
(13:50):
They have a functionality that they're trying to
promote.
So some of them it's interoperability, some of
them it's foreign exchange and energy conservation.
A whole range of different functionalities that each
of these cryptos were designed for.
So you almost have to be technical to
understand or appreciate which ones you want to
use.
Bitcoin is the most popular and best understood
(14:13):
because although it doesn't have as much functionalities,
because it is a trusted token, it today
behaves like a digital version of gold.
It is issued in limited quantities.
It's got a code that cannot be broken.
It is not issued by any one institution
and there's enough of Bitcoin going around to
(14:35):
provide its own liquidity.
So it's created a credibility for itself in
the network world that never existed before, 2006,
2007.
And then it's just introduced a whole new
asset class.
Everything else in the crypto world are still
evolving.
Ethereum is the base on which a lot
(14:55):
of crypto-based infrastructure, telecommunications, networking functions
created.
And then you have another category called altcoins,
which alternative coins they call them.
And it can be issued by anybody.
And that's another dimension altogether that you and
I can issue our own cryptocurrency and it
(15:16):
will be valued to the extent that your
friends or my friends accept the value that
you provide to it.
So when Sam Bankman-Fried issued his own
coin and he said it's $180, he had
a market that trusted it was $180 and
traded in it.
And then he used that value, borrow money
from a bank that he bought and then
(15:36):
it cascaded into a huge fraud.
So the big problem with altcoins is that
because anybody can issue an altcoin, I mean,
President Trump just issued his own altcoin at
the time of his inauguration.
So, and as long as it's a willing
buyer, willing seller, it's a traded commodity, it
will be valued by the market.
(15:57):
It can lose its value just as easily
as it gains its value.
That's a whole new dimension.
And it provides and it presents a lot
of risks that investors today are not familiar
with yet.
So we have got cryptocurrencies, we've got stable
coins, and then we've got altcoins.
And each of them have to be seen
separately for what they function.
(16:18):
And because this whole dimension is so new,
regulators are scrambling in trying to figure out
how they should regulate it, not necessarily impede
the evolution of finance in technology or technology
in finance, and at the same time safeguard
the end user, especially the mom and pops,
which moms and pops who really don't understand
(16:39):
any of this stuff and worried about if
they bought a token, whether it's fraudulent and
used for fraudulent purposes and all that.
We are in a changing world right now.
We need to understand how payments is evolving,
how assets are being defined digitally, and what
the different tokens do.
So a frontier territory.
Yeah, a lot's happening.
(17:00):
And I'd love to talk more about this,
but you mentioned something before we got started
that I really wanted to dive into because
you were also talking about credit profiling for
businesses, which is really a big important thing
for us in the United States.
So to switch a little bit, when you
talk about credit profiling for businesses, what is
changing?
What is happening in that world right now?
Hi, let me tell you this.
(17:20):
I'm so excited that small business is finding
new ways in which to finance, to be
financed by using data that was previously not
accessible and not usable.
And it's not just the United States, it's
countries around the world, destitute countries where you
(17:40):
couldn't trust the data or the balance sheet
of a small business.
Therefore, you just couldn't give credit to small
businesses.
And in the U.S., at least the
lowest 20% of the small business world
don't have access to credit simply because they're
not profiled in a way that takes into
account the real value of the business.
(18:02):
Traditionally, both businesses and individuals are profiled by
BICOR, Experian, and so on.
But that information that they use is historical,
is static, and it doesn't tell you the
real value of the business going forward.
And historical data is the worst data to
profile any business on because you're looking at
(18:23):
the potential of a business to go bankrupt
yesterday.
But it may be coming through today, but
you don't have that data.
But today, what's going on is that in
a number of parts of the world, in
Brazil, in China, even in countries like the
Philippines and Vietnam, banks plugging right into the
point of sale of small businesses to have
(18:45):
access to the cashflow of the business and
provide financing right there into the business itself.
In countries like Japan, and now some of
the Japanese corporations extending the way in which
they value the small businesses that function as
a supplier to a large corporation.
So there's a supply chain element involved in
(19:06):
there.
In other words, these small businesses would not
exist if they weren't part of a supply
chain to a mega corporation, auto manufacturer, for
example.
And their cashflow is really based on the
sales orders that they get from the large
corporation.
And by having access to those sales orders,
the banks can now give credit to the
small corporations.
So it's all about digitizing the transactional data
(19:29):
and then monetizing it by providing credit the
back end, back of it.
And because all of that is done digitally,
you can even throw in insurance on small
business lending.
And I know for sure there are credit
rating agencies in the U.S. which are
trying to get funding for financing small businesses
through cashflow financing and digitized cash cashflow financing.
(19:50):
And how does this affect peer-to-peer
lending?
Ah, the world of peer-to-peer lending
is coming back.
When peer-to-peer lending first started, the
theory of it was noble, which is the
platforms provided the opportunity for borrowers and lenders
to meet each other.
And the platforms themselves don't take the credit
(20:12):
because the lender decides for himself who he
wants to lend to and connects directly with
the borrower.
A bank, on the other hand, takes the
money from the lender as deposits, and then
on its own balance sheet decides who to
lend to.
So that's a bank.
And a peer-to-peer lender doesn't take
that responsibility.
They match the lender and the borrower.
(20:34):
But somehow along the way, both the technology
and the community of borrowers and lenders didn't
quite gel with each other.
The lender couldn't figure out the credit profile
of the borrower, and the platforms didn't want
to take the responsibility.
So there were lots of incidences of fraud
and all of that.
(20:55):
But today with AI and with a lot
more data analytics, lenders have got an incredibly
more access to data about borrowers, and they
can also function as community of lenders to
borrowers.
In other words, if somebody wants to buy
a house, he doesn't need to borrow from
just one person.
He can borrow from 10 lenders who basically
(21:16):
spread the risk between them.
And the role of the platform also improves
because they become like credit bureaus.
They provide a credit profile of the borrower
and so on.
So I see a resurgence of peer-to
-peer lending driven by AI and by data
analytics.
(21:36):
So what are you seeing with this new
way of using digital data to make decisions
about borrowers?
What are you seeing be used information-wise
that kind of wasn't really as popular being
used before?
Well, for one thing, we have more data
points than we ever had before, and especially
of sub-scale or sub-prime, they call
(21:58):
them, borrowers.
It's not the A-rated borrowers who are
totally transparent, who have their accounts audited professionally
and all of that.
It's the sub-scale borrower or the high
-risk borrower who doesn't have enough data about
himself.
And today we now go into all kinds
of lifestyle data, which sometimes gives us a
(22:20):
better profile than static data.
So if I looked at your, like in
China, there are companies like WeBank or WeCredit
and MyBank and WeCredit, right?
These are companies that look even into your
spending hours of the day.
So if you went shopping at two o
(22:42):
'clock in the afternoon, means that you don't
really have a job.
If you went shopping in the evening, it's
more likely that you've got a job and
you're shopping outside of working hours.
And then they look at your five best
friends on your mobile phone to see whether
you exist within a community of credit-worthy
friends, that kind of thing.
And that if they wanted to chase you
(23:04):
on a repayment, they know where to find
you, they know how to profile you.
So it's data like this that is enabling
a lot of non-traditional lenders.
Banks are not there yet.
Banks have one advantage which non-traditional lenders
don't have, which is they have the cheapest
source of funding and therefore they don't need
to go after the high-risk customer.
(23:25):
With the cheapest source of funding, they just
stick with the traditional borrowers who are A
-rated, whose data is trustworthy, even though it's
static and it's historical and they pay their
bills on time and all of that.
But in order to be a profitable lender,
you really need to drill down to the
higher-risk customers.
(23:45):
And that's where the problem is with information
and insights.
And today, because of the lifestyle of all
of us, our mobile phones and how we
use it and where we are tells a
lender so much more about us than ever
before.
And that's the kind of data that the
new lenders are depending on.
You may not appreciate this very much in
the US, but there are many countries around
(24:08):
the world that previously, you just couldn't lend
to somebody who lives in the barrios, in
the villages, and you don't know how to
profile him.
But now, just because he carries a mobile
phone, you know what time he wakes up,
you know who his friends are and all
of that.
So that's the kind of data that is
being made available for the lending business today.
(24:28):
Well, Emmanuel, great conversation today.
Like, there are so many, I could spend
hours talking to you because these are really
important topics, especially how this new age of
digital and AI is being used to qualify
for us for credit financing, how that affects
our ability to.
As small business owners, our ability to be
able to accept crypto and stable coins.
So there's so many things, I'd love to
(24:48):
have you back and talk to you a
little bit more.
In the interim, a lot of people watching
this want to follow you.
They're like, wow, I just learned a lot
of information I didn't know.
Where should they go?
What should they do to be able to
tap into your knowledge base and be able
to learn more about what you have to
teach?
Come look for me on emmanueldaniel.com.
That's where I put all my thoughts, the
(25:09):
links to my video.
And from there, you'll find everything else that
I do.
So just my blog, emmanueldaniel.com.
Okay, perfect.
Thanks for coming on with us today.
Thanks, Tai.
It's a fantastic time that I spent with
you today.
Thank you.
All right, so listen, if you're watching this,
go to emmanueldaniel.com.
And that's E-M-M-A-N-U
-E-L, Daniel, D-A-N-I-E
(25:30):
-L.com.
If you go to emmanueldaniel.com, this is
kind of his blog of everything that's happening.
He's got a lot of videos there.
You're able to access the Great Transition book
right at the very top of his page.
And then just take a minute, go all
the way to the bottom of the page,
and in a minute, you're able to then
subscribe to his social channels there.
And then you can get regular tips and
regular insight of what's happening.
I don't know about you, but man, I
(25:51):
just learned a lot of stuff that I
did not know.
And this is crucial stuff because as entrepreneurs,
if we're ahead of everybody else, if we
have this kind of knowledge, it really gives
us an unfair advantage to be able to
better accept crypto, for example, to better understand
why decisions are made about us, to be
able to use other digital information to make
decisions about people that we may lend to.
(26:12):
There's so many benefits you get by having
the inside knowledge of what's happening right now
and how it affects you.
And the great news is you get it
all in one place, which is emmanueldaniel.com.
So go to emmanueldaniel.com.
Make sure you grab the Great Transition book
at the top.
Make sure you subscribe to the social channels
on the bottom and then check it out.
A lot of resources there, including a lot
of really cool videos, blogs, and other things
(26:34):
that you're able to get insight about what's
happening now and into the future.
So make sure you check it out at
emmanueldaniel.com.
Thanks for tuning in.
Take care.
Have a great day.
You've been listening to the Business Credit and
Financing Show with your host, Ty Crandall.
(26:56):
Watch for our next episode to get even
more insight on financing and growing your business.
And don't forget to check us out online
at creditsuite.com for even more business growth
strategies.
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