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Former Intuit CEO Bill Harris was one of the early fintech leaders, perhaps before fintech existed. He was also briefly CEO of PayPal around the turn of the millennium.
Today he runs the Miami-based wealth management firm Evergreen Wealth Corp. He also has a lot to say about innovations in payments and advances that are taking shape in that area. Payments Dive sat down with Harris earlier this month for an interview about digital payments, crypto and what’s driving the world of fintech in the era leading to the new Trump administration.
Editor’s note: This interview has been edited for clarity and brevity.
PAYMENT DIVE: What is your opinion on stablecoins?
BILL HARRIS: That is fundamentally the most important of the potential crypto developments. Because when we talk about crypto as an investment, things like Bitcoin would bring their own volatility into play. If you’re looking for something to fund a payment network, especially a payment network where people in the real world operate in a fiat currency, and are really looking for crypto as a faster and cheaper mechanism for moving money , then doing it in fiat currency on a blockchain makes more sense if you’re trying to build a payment network. So I think stablecoin has a big future, whether private or issued by central banks.
Do you think the Trump administration will pursue a central bank digital currency?
On the one hand, I think there will be less support for the financial regulatory apparatus [there will be] an attempt to reduce regulation. Of course, much of the regulation on the federal side of the crypto world is essentially aimed at making it harder for unregulated crypto exchanges, etc. to thrive. The other side of it though is that I would bet that the deregulation push goes even further than that, and rather than forcing or allowing the central bank in this country to issue its own stablecoin, I think this really offers an opening for the economy. to private stablecoin issuers. My guess is that this privately issued stablecoin denominated in US currency will probably have a day in the sun.
As a payment network, as long as most of the world operates on a fiat basis, it seems unlikely that a cryptocurrency – and I’m not saying blockchain, I’m not saying stablecoin – will simply become the basis for a major payments network. because it means that for domestic translations you make two conversions, one to the cryptocurrency and one back again. And even for cross-border activities, you do two conversions, instead of one, which would be just the sender’s fiat and the recipient’s fiat. So in both cases, a separately denominated currency for a payment network seems at best not an advantage and possibly also a disadvantage.
Do you have cryptocurrencies?
No.
How do they compare to other payment methods?
If you look at the transaction fees today, for example to buy or sell Bitcoin, for example, they are generally higher than the transaction fees in electronic transaction fees in US dollars. That is not always the case. When compared to a credit card, a credit card is quite expensive at two to two and a half percent, but there are plenty of other electronic exchanges of US dollars that are significantly cheaper than the typical cryptocurrency transaction. The other thing to think about is the speed at which the transaction is confirmed. Things move quite quickly with some crypto networks. With Bitcoin, things are still slow: it can take 10 minutes to an hour for the transaction to actually be confirmed… in terms of the ability to execute transactions per second, and this pales in comparison to the number of transactions per second that can be carried out through the Visa network or in China on Alipay.
I don’t see cryptocurrency networks as significant payment networks at the retail level in the near term. At a business-to-business, bank-to-bank level, I think it makes sense to think about stablecoin, especially given that wires and Swift and all those other (money transfer systems) are so archaic and slow. and precious.
Are you talking about a specific stablecoin, or are stablecoins written in large letters?
I’m talking about stablecoins broadly, but I do want to note that to be effective they need to be fully reserved, like 100% backed by US Treasuries, or something like Treasuries if it’s fiat again. And probably the most valuable if it is denominated in the US, simply because most international transactions are made in US dollars.
Are you still using PayPal?
Oh yes, I do. Okay. I think it’s a great product, and it remains a great company, and it has made a fundamental difference in the ease and cost of consumers’ ability to move their money, not just in what it does itself, but also in the variety of possibilities. other services inspired by it.
Some people think that the United States has actually fallen behind many parts of the world when it comes to the advancement of digital payment systems. What do you think?
You’re absolutely right. I think the US is a laggard. So why, how did that happen? I think it’s two things. Firstly, the resistance of supervisors to change. But also the fact that we were there early, and in the same way that in Africa they experienced a faster revolution with mobile technologies because they had not yet installed landlines, just as we have experienced in some cases ways, hostage to our initial success. If you’re the first, that’s great, but then you get stuck with your DNA.
It’s no different than what’s happened across the financial services industry. For example, most major transaction systems at banks and brokers are old Cobol systems that are at least forty years old at this point. So why have we deteriorated so much today? Because we pioneered like that 40 and 50 years ago.
So what will move the US forward?
It’s really not that hard to think of – it’s hard to execute – but it’s also not that hard to come up with mechanisms to create faster, cheaper methods of moving money. And to the extent that blockchain fills that role, I honestly don’t think it’s the ideal technical solution, but it is the available technical solution, and to the extent that blockchain fills that role, it will have been because the incumbents are resistant to change.
