Founder @magnolia_hq | banking šŸ¤ crypto šŸ¤ fintech

NYC šŸ—½
Joined August 2013
Harsha Goli retweeted
we have an early early version of SolOS to show you guys come join us in SF this Friday evening to try it out! give us feedback, give us praise, we love u RSVP below so we can get enough snacks partiful.com/e/oWNxO4tCF5RzE…
11
10
1
118
5,578
Harsha Goli retweeted
Erebor Bank attracted crypto clients this year with a pitch -- the bank would convert their Circle and Tether stablecoins to cash for free. Sophisticated crypto trading firms quickly figured out a way to make an easy profit out of the offer -- at a cost to Erebor. Story with @MichaelRoddan theinformation.com/articles/… 1/
19
48
26
449
163,349
Harsha Goli retweeted
Block just applied for a second bank charter. This one is for stablecoins. Square Financial Services, the first one, takes deposits and lends. Builders Bank & Trust, the new one, holds bitcoin, executes trades, and settles stablecoins. It will be OCC-supervised, uninsured, and based in Sioux Falls. Day-one activities, from the filing: - Custody of bitcoin and "other digital assets," folding Cash App's existing bitcoin custody into the bank - Buy and sell execution as riskless principal (the bank stands between the customer and the market) - Deposits, withdrawals and transfers of digital assets - "Stablecoin settlement and transfer services" Cash App shipped USDC in May, and you have to imagine this move is them seeing some early traction worth at least buying the option of becoming a trust bank. Today, that stablecoin and digital assets business runs on 50+ state money transmitter and virtual currency licenses. It did $10.7bn of bitcoin volume in 2025 for about 2 million monthly actives. One federal charter replaces the state patchwork for all of it. Three things this gives Block that it didn't have: 1. A qualified custodian. The filing says "institutional-grade fiduciary custody" and "expand into a broader customer base." I read that as using stablecoins and digital assets to expand internationally. 2. A federally supervised settlement entity for stablecoins. Do not underestimate the attraction of "federal preemption." Answering to 50 states with different crypto rules is PAINFUL. 3. A clean insured bank. Bitcoin never touches the FDIC-insured ILC. Lending risk and custody risk live in separate charters with separate regulators. JPMorgan and BNY are built that way. In March, Dorsey said, "I don't like that we're going to support stablecoins, but our customers want to use them." September's charter application lists stablecoin settlement as a core activity. Well, there's proof: customers won, and stablecoins have real demand. Everyone else in the OCC trust charter queue is crypto-native or a stablecoin issuer: Anchorage (live since 2021), Circle (final approval July), Coinbase, Ripple, Paxos, BitGo, Bridge. Block is the first consumer app with 60 million users to file. The CEO is Lee Woolley, formerly of Northern Trust and BNY Mellon. A custody banker, hired to run a custody bank. Honestly, this one took me by surprise, but it makes so much sense as you look at it. If you want to be in stablecoins, better to have a single federal entity to do that with.
3
6
1
44
6,325
Harsha Goli retweeted
this will be my first paper :D
I'm excited to share some of what i've been working on at Sesame! turnbench.sesame.com is our turn-taking benchmark for real-time conversation: when to speak and when to yield
28
3
1
243
9,016
Harsha Goli retweeted
I'm excited to share some of what i've been working on at Sesame! turnbench.sesame.com is our turn-taking benchmark for real-time conversation: when to speak and when to yield
52
58
12
939
78,982
Harsha Goli retweeted
Behind every exciting fintech is Column N.A.
8
1
1
67
5,488
Harsha Goli retweeted
> what can we do with covenants? There are *many* powerful use-cases. getcofund.com/research/coven… To learn about them, turn on your audio šŸ”Š, click into our visual study & let the geometric tones guide you šŸŽØ
7
19
7
75
27,942
Harsha Goli retweeted
Bitcoin succeeded beyond its creators’ wildest expectations. The maximalist ideology built around it did not.
130
55
46
528
186,550
People are about twice as likely to approve of **coal plants** being built nearby as opposed to data centers. Coal plants use more water and pollute more. They create comparable noise pollution. There's no way this makes sense outside a media panic.
408
1,019
294
6,992
640,961
Harsha Goli retweeted
Pocket just crossed $100M in Annualized Run Rate. We went from $1M → $100M in just 7 months, making us the fastest YC hardware company to reach this milestone. There are now 270,000+ Pocket devices out in the world.
412
194
179
3,992
2,225,183
šŸ’„THIS IS A **MASSIVE** SHIFT in how global financial plumbing will work, as this announcement means the @USTreasury--NOT the @federalreserve--controls whether tokenized eurodollars/euroyen/euroeuros, will be recognized as valid in the US. Bessent knows what he's doing & why.šŸ’”
.@POTUS and Congress delivered the GENIUS Act, establishing a landmark framework and clear rules of the road for payment stablecoins, and Treasury is moving quickly to implement that framework. @USTreasury welcomes input from stakeholders as we work to provide the regulatory certainty businesses need to innovate and grow in America, cement the role of the U.S. dollar as the world’s reserve currency, and keep America the crypto capital of the world.
26
197
13
1,414
132,558
I’m on a flight or else I’d respond more thoroughly, and I have a lot of respect for Omid and have guest lectured in his class a number of times. But this is a pretty simplistic response to what is also meant to be a simplistic article for those just exploring the space. It’s certainly not inaccurate or misleading for the customers looking at using solutions like Rain. I expect if Omid could he’d take those words back because that’s clearly untrue and just weakens his other points. On interchange, it’s absolutely true that the existence of interchange increases credit capacity and the addressable customer base, expands geographies and affinity groups, and user perks. It is a shuffling of economic surplus from merchants to users and issuers. Stablecoin cards go even a step further, putting more economic surplus in the hands of users and companies and less to the issuers while still creating the other benefits. The existence of cards in markets with lower interchange isn’t a counter point, in fact when you look at credit capacity and user perks in Europe you see it’s proving the point. On the point about a cost of funding problem, Omid states this is untrue because…. Large global banks don’t have this problem. Again, that’s exactly the point. We are creating a market where cost of capital is reduced for everyone - not just global GSIBs but program managers and fintechs who want to expand globally and do see more cheaply and with better economics. The fact that JPM can settle through an RTP more often than other issuers and program managers is why we need these cards. Because we need competition, modular tech stacks, and global usage of stablecoins. For almost all of the market participants this is undoubtedly a capital uplift - and we are opening up markets and business models for global tech and fintech companies that was not economical or available otherwise. Lastly, the idle balance problem he talks about is true, but actually helps the consumer because the idle balance goes from funding JPM prime to returning capital to consumers holding balances. And his third point about FX fees is sometimes true and sometimes not, but programmable money also means that we can now do smart settlement across FX in lowest cost currency and compress those fees. That’s exactly what we’ve started to see in some cases. Innovation in this area is increasing quickly and stablecoin settlement is at the core of it, while people are expanding globally quicker than ever. You can ideologically want direct peer to peer settlement, but as this post shows you may miss the forest through the trees when we are talking about new financial rails that are clearly making great strides at improving user experiences, shifting economic surplus, and democratizing monopoly markets.
I hate to burst everyone's bubble, but this explainer of how credit cards work by Rain is inaccurate, almost misleading. For the record, I like that team and think stablecoin-backed cards are a great product, but if we are going to be disruptive as an industry we need to get key facts right. So let's get to it: First, the claim that without interchange "no business would take on the risk and costs associated with issuing your card" is absurd. Interchange is capped in many places to a fraction of the US (most notable the EU) and cards there work just fine. Nobody has exited the market. The credit/debit blend might be different, and there are less rewards, but cards persist. Similar story in the US with debit cards where the fee is capped by the Durbin amendment. If you don't believe me, as your favorite LLM how much profit the largest issuers take home from interchange. It's definitely not "recouping operating costs." Second, the claim that delays in settlement lead to a very high cost of capital ("idle capital") for issuers is mostly wrong. The largest issuers all have access to real-time payment systems like same-day ACH, RTP, and FedNow (hell they own the private-sector solutions like TCH that offer some of these). If they don't settle cards in real-time, it's because they choose to, not because they can't. First, delayed settlement = netting = lower cost of capital. The longer the delay, the more capital efficient the netting. Also, in the weekend example, there is almost no money actually sitting idle earning nothing waiting for Monday settlement. The largest issuers settle out of their Fed reserve balances which earn IORB (currently 3.6%). And the funds tied up in credit card settlement are relatively tiny compared to their massive balance sheets, which suffer from excess reserves. There probably is no other place they'd want to park this money anyway. Even if non-weekend settlement did impose some cost, it is small compared to what is recouped via interchange (for credit and Durbin-exempt debit) or the insane interest rate charged on revolving balances (on credit). Lastly, stablecoin-backed cards also have an idle balance problem. It's just transferred from an issuer (like JPM) to the user (like you). If you don't believe me, ask your favorite LLM to cross-reference the largest card issuers with a list of the banks most aggressively trying to kill stablecoins in DC. Why would the likes of JPM and BoA be so opposed to something that supposedly reduces their costs? Third, the cross-border example is both oversimplified and convoluted. As a general rule of thumb, cross-border card swipes are more profitable than domestic ones for issuers. They are exempt from domestic caps and also earn the F/X conversion fee (at least 1%, if not higher). This is one reason why so many American credit cards give such great travel perks. They want you to go to Europe and use your card there - they'll make more oney. Now, this doesn't apply in the example given (a Colombia-issued card being used for a Claud subscription) but I am confident LatAm card issuers make money off the F/X leg - it's not a burden. As a general rule of thumb, any argument or explainer that acts like credit card issuers or networks are doing us some kind of favor by existing should not be taken seriously. Issuing a card and running a card network are among the most profitable businesses out there. The gross-margins are fat, the sector is growing, and the network effects are strong. So why do I care enough to issue this correction? The fact that Rain—an otherwise succesful and even admirable company—would issue this tortured account of how cards work is a great teaching moment as to why cards and their related fees persist, despite being a regressive tax on small business. Rain's business model is primarily interchange. They can't exactly come out and say "stablecoins on public blockchains will kill swipe fees" because then they'd have to go find a new business model. Something similar has happened to every pre-crypto attempt to disrupt cards. Those in the position to change it all got coopted to benefit from it. My favorite example are the largest merchants (like Amazon) who used to be the largest victims of swipe fees, until they realized they can negotiate much lower fees for them, then issue a branded card that sticks it to smaller competitors. My own view is that stablecoins will ultimately disrupt this model and collapse swipe fees. First, because the card industry's margins (including Rain's) are their opportunity. Second, because unlike the credit card networks, public blockchains are censorship-resistant. They allow far more competition, particularly from startups. The process will take decades to play out, but ironically stablecoin-backed cards like the ones issued by Rain will help us get there. To break down network effects, you need to target one side of the market first. Get millions of people comfortable with paying with stablecoins (by way of a card), then go to the merchants and convince them to accept stables directly. I'm sure a savvy startup like Rain will be able to evolve. The big banks who are the biggest issuers will struggle.
11
4
3
114
52,584
Harsha Goli retweeted
šŸ”“ Chainalysis Government Solutions sues United States in Federal Claims court The court has placed filings under protective order, finding that "certain information likely to be disclosed orally or in writing during the course of this litigation may be competition-sensitive." TRM Labs, one of Chainalysis' main competitors, appears as voluntary co-defendant on behalf of the United States. The Federal Claims court handles nationwide claims against the United States Government, often involving contract disputes and bid protests.
9
10
2
62
9,906
Harsha Goli retweeted
I hate to burst everyone's bubble, but this explainer of how credit cards work by Rain is inaccurate, almost misleading. For the record, I like that team and think stablecoin-backed cards are a great product, but if we are going to be disruptive as an industry we need to get key facts right. So let's get to it: First, the claim that without interchange "no business would take on the risk and costs associated with issuing your card" is absurd. Interchange is capped in many places to a fraction of the US (most notable the EU) and cards there work just fine. Nobody has exited the market. The credit/debit blend might be different, and there are less rewards, but cards persist. Similar story in the US with debit cards where the fee is capped by the Durbin amendment. If you don't believe me, as your favorite LLM how much profit the largest issuers take home from interchange. It's definitely not "recouping operating costs." Second, the claim that delays in settlement lead to a very high cost of capital ("idle capital") for issuers is mostly wrong. The largest issuers all have access to real-time payment systems like same-day ACH, RTP, and FedNow (hell they own the private-sector solutions like TCH that offer some of these). If they don't settle cards in real-time, it's because they choose to, not because they can't. First, delayed settlement = netting = lower cost of capital. The longer the delay, the more capital efficient the netting. Also, in the weekend example, there is almost no money actually sitting idle earning nothing waiting for Monday settlement. The largest issuers settle out of their Fed reserve balances which earn IORB (currently 3.6%). And the funds tied up in credit card settlement are relatively tiny compared to their massive balance sheets, which suffer from excess reserves. There probably is no other place they'd want to park this money anyway. Even if non-weekend settlement did impose some cost, it is small compared to what is recouped via interchange (for credit and Durbin-exempt debit) or the insane interest rate charged on revolving balances (on credit). Lastly, stablecoin-backed cards also have an idle balance problem. It's just transferred from an issuer (like JPM) to the user (like you). If you don't believe me, ask your favorite LLM to cross-reference the largest card issuers with a list of the banks most aggressively trying to kill stablecoins in DC. Why would the likes of JPM and BoA be so opposed to something that supposedly reduces their costs? Third, the cross-border example is both oversimplified and convoluted. As a general rule of thumb, cross-border card swipes are more profitable than domestic ones for issuers. They are exempt from domestic caps and also earn the F/X conversion fee (at least 1%, if not higher). This is one reason why so many American credit cards give such great travel perks. They want you to go to Europe and use your card there - they'll make more oney. Now, this doesn't apply in the example given (a Colombia-issued card being used for a Claud subscription) but I am confident LatAm card issuers make money off the F/X leg - it's not a burden. As a general rule of thumb, any argument or explainer that acts like credit card issuers or networks are doing us some kind of favor by existing should not be taken seriously. Issuing a card and running a card network are among the most profitable businesses out there. The gross-margins are fat, the sector is growing, and the network effects are strong. So why do I care enough to issue this correction? The fact that Rain—an otherwise succesful and even admirable company—would issue this tortured account of how cards work is a great teaching moment as to why cards and their related fees persist, despite being a regressive tax on small business. Rain's business model is primarily interchange. They can't exactly come out and say "stablecoins on public blockchains will kill swipe fees" because then they'd have to go find a new business model. Something similar has happened to every pre-crypto attempt to disrupt cards. Those in the position to change it all got coopted to benefit from it. My favorite example are the largest merchants (like Amazon) who used to be the largest victims of swipe fees, until they realized they can negotiate much lower fees for them, then issue a branded card that sticks it to smaller competitors. My own view is that stablecoins will ultimately disrupt this model and collapse swipe fees. First, because the card industry's margins (including Rain's) are their opportunity. Second, because unlike the credit card networks, public blockchains are censorship-resistant. They allow far more competition, particularly from startups. The process will take decades to play out, but ironically stablecoin-backed cards like the ones issued by Rain will help us get there. To break down network effects, you need to target one side of the market first. Get millions of people comfortable with paying with stablecoins (by way of a card), then go to the merchants and convince them to accept stables directly. I'm sure a savvy startup like Rain will be able to evolve. The big banks who are the biggest issuers will struggle.
46
34
13
507
150,831
One of the weirdest things about VC: A startup can get rejected by 30 investors and then suddenly have 10 firms fighting to get into the round. The company didn’t change overnight, the FOMO did
45
14
1
324
17,933
Harsha Goli retweeted
JUST IN: šŸ‡ŗšŸ‡ø Trump family crypto company World Liberty Financial receives approval to become a federally chartered bank.
792
1,596
381
11,371
978,635
Harsha Goli retweeted
The CLARITY ACT fight is still ongoing, and it's because the stakes are high. šŸŽ™ļø @arshbotĀ  šŸ“ŗ youtu.be/I9cvJFpZKbA?si=EIL0…
1
1
252
Harsha Goli retweeted
Elizabeth Holmes
@ElizabethHolmesAug 12
Faithless is he that says farewell when the road darkens. - J.R.R. Tolkien Find investors as loyal as Tim Draper.
Hello fellow founders, go to your investor's website and see if they still list you as a portfolio company. What you do with the information is up to you.
26
30
9
1,279
308,757
Harsha Goli retweeted
This is a big deal for financing a bank charter application FDIC is adopting the conditional approval model of the OCC Administration dependent of course as it is guidance
3
1
15
1,204
Harsha Goli retweeted
The OCC has denied a national bank charter application filed by bunq. Similar to the Wise denial from a few weeks ago, some pretty harsh comments re: the proposed management team. occ.gov/topics/charters-and-…
4
10
7
100
24,285