Rethinking Cross-Border Payments, and Bridging Web2.5 with Blockchain | The CXO Conversations

Guest:

• Milind Sanghavi, Co-founder & Chief Executive Officer, XWeave.io

Host: 

• Pat Patel, Executive Director, Global Finance Technology Network (GFTN)

Full Transcript

[00:00:00] Pat Patel: Hello and welcome to the best CXO conversation yet. I'm joined by Milind . Some of you may know him from multiple organizations that he's worked for. My name is Pat Patel. I work for GFTN. I'm the executive director. It's been, a huge week so far. Milind, tell me about the week that was.

[00:00:23] Milind Sanghavi: Yeah, Pat. Thanks. It's been a great week. What we love about SFF (Singapore FinTech Festival) is the ability to sit with people who are decision makers, explore potential deals, and figure out exactly what the next steps are.

[00:00:35] Pat Patel: You don't have to be nice. You can tell me as it is. I can take it.

[00:00:39] Milind Sanghavi: No, no, but the point is. I think for us, I'll give you an example. I'm the founder of XWeave and what was really cool is almost every single partner that we wanted to talk to, or we were in discussions with, were here! And we were able to actually have super detailed discussions on how do we go live. As a company that's been in stealth for pretty long, we needed to have good quality time and it was really efficient.

I think for me, the regret was like, I couldn't go to a lot of the conversations. But to me, I really enjoyed and I think I speak for my team here, like we really enjoyed being able to sit deeply with partners and talk about, " How do we move the business forward?"

[00:01:12] Pat Patel: Share a little bit about XWeave because I'm not sure everyone's aware. you said you've just been in stealth mode. Temasek is somewhere on the scene as well. I'm sure that's a good sugar daddy or a sugar mummy, but please let me know.

[00:01:23] Milind Sanghavi: XWeave, we came through Temasek's incubator called Menyala. It's their blockchain, FinTech and AI incubator. In April, we spun out and we started building the actual product. So I think our thesis, at the end of the day starts with, we think that money movement and the way it works today can be more efficient. It has a lot more hops, it has a lot of fat in there.

[00:01:43] Pat Patel: So when you say efficient, is that speed, cost, or all of them?

[00:01:47] Milind Sanghavi: The reality here is to solve all of them. And I think there's different ways to solve it. So I think at XWeave, what we are trying to build is a global network that is powered by blockchain, stable coins and cbdc. And to figure out how to move money across borders but do it in a regulatory friendly way.

If you look at the core power of a stable coin or any digital asset actually. It's always gonna be atomic or pretty close to instant. And so how do you take that and then say, "Look, how do we introduce reglations or set up in a regulatory friendly way?" We believe that in 2024, every transaction should be real time. Whether you move it cross border or you move it domestic. Now there's a path and every country is looking at different versions of it.

We think that the ability to take the old payments world, which I've spent a lot of time in. And power it with some very deep, really cool blockchain and Web3 technology and bring it together into what we like to think of it as, web 2.5. And, say like, how do you take the power of each side to go build something that can change the game?

[00:02:47] Pat Patel: So is that where we are now? Web 2.5.

[00:02:50] Milind Sanghavi: I think it depends on who you ask. I think there's enough of the old school web two guys who believe that the Web3 side is a bunch of cowboys. I think there's a bunch of the other side that believes the other guys are not really caught up with time.

The way I look at it is. How do you use technology to empower and change the game. Obviously we're very lucky because Temasek and Menyala being our investors.

[00:03:15] Pat Patel: It's pretty impressive. Yeah.

[00:03:16] Milind Sanghavi: We are very lucky and it gives us the ability to think outside and say, "Look, what's the long game and how do you play the long game?" What I've learned is, and I'm relatively new to the Web3 side of it or the blockchain side, whatever.

[00:03:27] Pat Patel: I thought you were web one.

[00:03:29] Milind Sanghavi: Yeah, maybe. I think my son certainly thinks I'm Web zero maybe. But the point is, there's always the extremes. And what we are trying to do is there's gotta be a happy medium. And it's not about waiting for technology to come in the future. There's something that exists, there's more changes coming to it. How do you build a platform that can scale globally? And do it where there's technology that's live today and it's scaled.

And then, obviously between Insights [forum] which was also very amazing. Between Insights and this [CXO Conversations] the talk of the town right now is stable coins. Is stable coins where it ends. I don't think so. I think it'll be stables one way of it. I think other digital assets will come. Tokenized deposits being one of them. CBDC is another.

I think the ability to build something that can scale into how technology grows, that's how the game changes over time.

[00:04:16] Pat Patel: Fair. And so you said Insights, you meant Insights Forum?

[00:04:19] Milind Sanghavi: Yes. The Insights Forum.

[00:04:20] Pat Patel: From GFTN?

[00:04:21] Milind Sanghavi: Yes, GFTN's Insights Forum.

[00:04:23] Pat Patel: When we spoke earlier, you mentioned you had some great meetings for the business and are you able to share? Are you able to disclose anything? Expansion plans. Things that you are, you're looking at.

[00:04:33] Milind Sanghavi: I think the way we looked at it is we have a specific plan. What I think of as day zero on how we are going to, we're going to go live. We've had really deep conversations. So interestingly, let me put it this way. Our partners were in town. Their lawyers were in town. We were able to actually go spend some really deep time on figuring out the construct of the deal and to kind of go execute it.

And I think that was fantastic. And that happened literally the first three hours of Wednesday (Day 1) .

[00:05:02] Pat Patel: Resolved within two, three hours. Fantastic.

[00:05:05] Milind Sanghavi: Well, I mean, resolved is probably a wrong choice of word. Lawyers are involved. So, it's always fun.

[00:05:10] Pat Patel: So you close the deal in two, three hours then?

[00:05:12] Milind Sanghavi: Yeah. We've got all the specifics laid out. Yes. You know, I think the details right is where it is.

[00:05:17] Pat Patel: Okay. I'm gonna segue into something else. You've talked about 2024. You've talked about the Festival. We're gonna come into 2025, but before we do so, I wanna take you back to a dark time. Take you back to the early days of COVID. There was one thing during those dark times that probably kept me going. It was a Friday night. There were two of us always on a Zoom call or three of us on a Zoom call, and it was like a chat show where we would invite, well invite special guests. Do you wanna share a little bit about those times? Minus some of the details?

[00:05:49] Milind Sanghavi: Yes. It felt like you were stuck in a house the whole day, for the whole week or whatever it was, and Friday nights was hard rock. Like for me, and I think it was for you as well, I don't think we missed a single Friday night.

[00:06:00] Pat Patel: There was nothing going on a Friday night for about five to six months.

[00:06:03] Milind Sanghavi: And so just the ability to have an open discussion. And I think we had some parameters of what types of people would not be involved in those discussions?

[00:06:13] Pat Patel: You kept vetoing the guests that I chose.

[00:06:15] Milind Sanghavi: That's not true. I was not the only veto, by the way. I think couple of mine were vetoed too. But, but I think what I really enjoyed about it was just the ability to sit and have a chat. We are three payments guys. You have done a lot more. The third person has a done a lot more. But we didn't talk payments, we didn't talk business.

[00:06:32] Pat Patel: We can share the third person surely. So Prajit Nanu, the founder of Nium, who's now in the US. So between the three of us, we would have this Zoom call for everyone listening in and invite special guests. So for the first hour was sacrosanct where we would spend the first hour ripping each other. That was the go-to. Then we would invite guests to come on and we would take turns, maybe ripping them. They would rip us. Generally, it was the other way round.

We would find one person in the group to, to go after. It tended to be you. I'm just throwing it out there. I think we had investors on. We had folks. I think we had, I can't remember his name now. The guy from India, the founder from India was on.

[00:07:11] Milind Sanghavi: The form of that. Right? I actually do wish, we had continued it on in some format. It's just really hard with everybody's lives going quote unquote back to normal.

[00:07:19] Pat Patel: Friday night's a prime time.

[00:07:20] Milind Sanghavi: Yeah, exactly. Hard calendar slot. But I think what was really good about it is you knew that was coming on that Friday. You knew that your are able to just sit and kind of crack a few jokes and maybe get your leg pulled a little bit more. But the point is you knew it existed and you knew it was coming on that Friday. And for me, I was looking forward to it. And the ability to just say that was a safe zone. Like this is what happened in the whole week. Was great and I think like we all built a better bond because of it.

And interestingly, some of the people that we talked to as we were raising our round have actually come from those conversations. And they've certainly been, at least a couple of the investors that we have, have been fantastic supporters of me and teaching me on how to do it as a first time founder.

[00:08:01] Pat Patel: There was a lot of connections made because we had these different guests coming on over a three, four month period. It was creating a community. And it's great to see that in your current business, some of those people have played a role in your founder journey.

Whether it's on the investment side. Ginesh as well, and a few others. And, Salim. I'm not sure if you knew Salim that well. Doug as well. There was a whole raft of people that just kept joining. I think new ideas kept coming out of this. I wish we'd had a scribe.

What we're trying to do is build these communities. When I look back at the things that we've been doing for a number of years now. Whether in social settings, out and about or or online. It's all about building that community and that network. And that's the heart and soul of what GFTN is looking to build.

[00:08:44] Milind Sanghavi: And Green Shoots is a great example, right? Because that was one of the ideas that came out of that as well. I think there is a need, especially as a first time founder, I'm learning it even harder, is there've always been these kind of informal communities. People you could call and ask for help.

I feel like there is certainly much more of a rigor around it and like rigor, I put it in quotes. But the ability to say, "Look, I know what you've gone through." And there are a couple people that I call and be like, "Hey, I'm going through this." And they are like " This is how we solved it."

It doesn't give you a final answer, but it gives you guidance. And I think that is immeasurable.

[00:09:19] Pat Patel: Sometimes it's those words " I feel your pain. Yeah, I know your pain. This is what I did, if it helps, please use it." And that's that community. That's that network. And in a world where we have geopolitics, crazy people coming into power in different jurisdictions, conflicts, division still. You need these communities to come together.

But enough about communities. Finish up now on 2025. You know, it's the focus. So what the hell is gonna happen? We've seen it's been a crazy week. It's gonna be crazier. But in some ways, when I speak to people around at the festival, today and yesterday, there was a level of stability as well that is emerging.

And I'm not sure if that's because there are some green shoots. I wanna hear what is it you're seeing that you think will unfold in 2025. Maybe you know a little bit of context around payments as you see it because for years people have been saying it's a race to zero.

[00:10:12] Milind Sanghavi: Just going back to your previous point as well, right. Like I think what COVID taught all of us is resiliency. Like we are resilient as a human beings. And I think while it seems like everything's in upheaval, I think the resiliency like in us just says, "Yeah, we'll get through it."

Like it's about just staying sane somehow. Through whatever's coming at you. I think that's gonna be a little bit important in the next few months.

[00:10:33] Pat Patel: Makes you battle ready but also I think it's a humanity side of things. I think we talked on. During those times, don't be an ass. Appreciate what you've got.

[00:10:40] Milind Sanghavi: I've been in payments long enough where every organization I've been at. We generally say something along like, "This is it. This is the point of future." And the reality is every single time in payments that somebody has said, this is the only way payments are gonna work, whether that 20 25, 20 26, or onwards.

I mean, I genuinely believe that it's a multipolar world. I think there's gonna be people that want to do something one way, and there's gonna be someone who believes theirs is a better way. I don't think that it's a zero one game. I think the thing is, can I believe, like as a payments industry, can we actually solve true problems without loading costs.

And you know, when you look at, you can ask me like, what's the true problem? The true problem maybe, hey, it needs to be instant. True problem maybe it's too expensive. True problem, maybe it's too complicated. Whatever that is, I think if you're solving for use cases, eventually scale comes.

And so for me, the way I look at it is 2025 is going to be a little bit unsettling. For me, certainly as a, as a first time founder. It's going to be a lot more learning, so I am looking forward to that and a bit apprehensive about it. But I don't believe in unipolar worlds. Like I think Multipolar worlds will always exist, and I think that's gonna be the reality, whether you look at payments or anything else.

I do think the one piece of payments that's getting that excites me a lot is. Some of the, especially blockchain, maybe Web3 or crypto, whatever you want to call it. And the crypto guys will hate me for saying this, but our crypto people is there is actually regulation and stability coming to it, which makes people like me and some of the older school guys have to figure out how to work within a regulated environment without fear of blowing up the system or blowing up your companies.

Regulation isn't necessarily a bad thing as long as you figure out how to still deliver value to the customer, whatever the definition of a customer may be . And what you want to change. I think regulation makes it much more easier to know where the line is.

And sometimes they won't be aligned. I think you have to have more conversations and more networks and talk to them. But the point is, I think it's about resilience. I believe 2025 Q1 is gonna be a really choppy time. And we are gonna have to just stick together, bond together, help each other out of it.

[00:12:55] Pat Patel: Yeah. I think the last few years definitely is making people more resilient. Maybe not sweating the small stuff. I think, because right now, well I say not sweating the small stuff, but I think the, the degree of that small stuff is probably increasing. So it's kind of not sweating the medium stuff.

I'm gonna put you on the spot. What's the most provocative thing that's gonna happen next year? Like this year there's been a few things, people coming to power, different jurisdictions, some swings in other countries that weren't expected, say India wasn't expected, that change.

And then maybe what happened in Japan with the stock markets that were like. Wow, okay. So there's been, I would say, three or four of those moments. I'm gonna put you on the spot Milind. Yeah. How much do you know your stuff?

[00:13:37] Milind Sanghavi: Well, first of all, none of those events that happened this year could have been predicted. And so are they almost mini black Swanny events? Yeah. I mean, I think Japan certainly was. It has left a market impact on some companies that were very exposed to that piece. I think the big question mark for me is the geopolitics and the regulation that comes out of that geopolitics a regulation or laws, or whatever you wanna call it.

I struggle with how much of these global messages, pre elections versus post-election, in terms of policy implementation. What's the alpha or the incremental change. I think from being in the Web3 world, like I'd say like we don't know which way this is gonna land.

I do think there are going to be some very material moments in the crypto blockchain space.

[00:14:24] Pat Patel: They're absolutely happy right now. I've just seen them partying in the streets. As soon as the results come through. stable coin, folks are feeling a little bit less comfortable.

[00:14:33] Milind Sanghavi: I think CBDC will be a big story next year.

[00:14:35] Pat Patel: He's not a big fan, is he?

[00:14:36] Milind Sanghavi: Maybe not in the US but I think the interesting thing is going to be about how the rest of the world handles what happens in the US. I don't know the answer to it. I'm not enough of a geopolitics expert to talk about it. But there's been a lot of messages coming out of the US we don't know how much of it gets implemented and when.

[00:14:54] Pat Patel: I'm kind of thinking (he) probably wants to leave a legacy, and I'm hoping that legacy is something that's impactful rather than the opposite of that.

[00:15:02] Milind Sanghavi: I'd say universally impactful.

[00:15:04] Pat Patel: Random question. What did you want to be, what was the first career you wanted to be as a child?

[00:15:08] Milind Sanghavi: I used to dream about being a fighter pilot. It's a pretty generic kind of thing.

[00:15:13] Pat Patel: You watch lots of Top Gun as a kid.

[00:15:14] Milind Sanghavi: Yeah, I did. Uh, absolutely. I wish I could say that I wanted to be a payments guy my entire life. Not a fact. I think I kind of stumbled into it. I would sit in my bed, like cover my head and be, thinking of flying in a cockpit. I think that's a pretty generic thing. There was a point where I was wanted to be a DJ. I was really into music. I used to make mix tapes.

That's how old I am. My dad bought me a double recorder for tapes and so I would record.

[00:15:38] Pat Patel: Thank you so much.

[00:15:39] Milind Sanghavi: Pleasure chatting.

[00:15:39] Pat Patel: Our flying pilot. Thank you for joining us. And stay tuned for more CXO conversations.