Salman Syed, Marqeta's U.S. general manager, works with a diverse set of clients and partners — big banks like J.P. Morgan and Goldman Sachs, payments networks like Visa and Mastercard, and fintechs like Affirm, N26 and Branch.
Until recently, the financial players on Syed's list haven't had much to do with the wild world of crypto. But that's been changing.
It's part of a broader trend to link cryptocurrencies with practical financial tools. This week, Mastercard and Gemini, the crypto exchange founded by the Winklevoss brothers, unveiled a partnership for a rewards credit card.
Rather than replacing bank accounts and credit cards, cryptocurrencies are working alongside them as just one more store of value that can be spent like dollars, euros or yuan.
For Syed, who worked at Mastercard for nearly five years before joining Marqeta in 2016, the deals underline a big change in the finance world. Crypto is steadily morphing from a vehicle for speculation or investment to a currency for everyday transactions.
In an interview with Protocol, Syed talked about that change and what it means for consumers and the financial services industry.
This interview was edited for clarity and brevity.
How has crypto evolved as a transaction tool?
There have always been two schools of thought. The predominant view of everybody who was in the crypto space is [that] crypto will replace all currencies. This is the way everybody's gonna transact. This is the new money. And then a specific group basically took a position: "Look, all these different types of transaction methods, whether it's cash, whether you like all these different currencies or fiat values, are all going to have to live side by side."
What's more important is that we figure out how cryptocurrency plays with the rest of the world. What is interoperability going to look like? That's the right solution in this day and age. It's more important to be interoperable than to say, "I'm here to take over everything else." That's what we've seen occur in crypto more recently, all the folks that are coming to the table. We just saw the Gemini card. We work with Coinbase and Shakepay, we just announced the other day. We've been on that journey for a while, right? We're watching people try to figure it out. I will tell you, probably in the last year, we've all of a sudden it just seems this kind of got locked in a little bit more and say, "OK, this is the way we're going to do it."
The view before — which isn't gone in any way — was a lot bolder. It was basically saying, "Everybody will have crypto. There won't be such a thing as money, and that is just how everybody's gonna transact." This idea of an alternative digital currency that rules everything is not a new idea. We've always, as an industry, been in pursuit of digital currency that is not controlled by any central government that everybody is going to use. But where we are today, I think wherever crypto is going to start, it needs to find a way to play with everything else. And that's what you're seeing.
Can you point to a watershed moment for this shift in the last two years?
That's a great question. Sometimes it's more like, "Oh, those three dots all line up a little bit more" than to say it was this one thing. What we're seeing right this very moment, to see some of the biggest exchanges like Coinbase and Gemini and all these folks saying right now, "We're ready to go."
That's a big piece of it. These types of decisions don't get made very quickly inside of Visa or Mastercard either. I can tell you from my time at Mastercard, we were dabbling in blockchain and crypto and all those types of things, so just keep an eye on it, right, because you just don't know how big this was potentially going to get. So the investments have been there for the last 10 years. That's how you have to think about it: incremental investments, and they just kind of continued and all of a sudden when you look up you're like, "Oh my God, we're this high up now and we're ready." That's how it's kind of gone.
What's been the toughest problems for you in terms of developing tools or capabilities for crypto?
I think we're in early innings right now in terms of what's happening with crypto. We've come to an alignment on how we're going to enable the funds to move to a card so they can go transact. We've solved that. But think about how this could potentially play out over time. I don't think it's unforeseeable that we could end up in a scenario where those crypto exchanges or people in the crypto space want to provide more and more banking-like services. I think for us, we're going to probably be on that journey with them to help them kind of figure it out.
From a technical standpoint, we'll be able to say, "Hey, we can help you with this and this and this." The question is: Is the industry ready? Does the industry know how to play together? We're just figuring out how to move currency around. But how do you do all those other aspects if somebody wants to trade money, if they want to save? What do those vehicles look like? Is there FDIC insurance and all those pieces?
We have to really work with our bank partners to get them comfortable with supporting a program like this. The banking industry was like, "Oh wait, you want me to sponsor a program that's in the crypto space?" So it's helping them get comfortable with it and saying like, "Listen, this is how this is done. The risk is managed," and all that stuff was I think the biggest aspect of this.
And are banks becoming more comfortable about becoming part of the crypto world?
The evolution that we've seen for many of our partners started off [with a bank saying]: "OK, I'll let it happen this one time." [Laughs] They've evolved to: "OK, from a risk standpoint I kind of understand my guardrails better. So if it's a crypto program that's gonna work within these guardrails, I'm gonna make it work. I'm much more comfortable." I think that was us really pushing at the forefront saying, "You got to get comfortable with this." We've seen them evolve to that place. I think it's going to open up the ability for like this interoperability on crypto and other payment methods.
What are the things that worry you in terms of regulation, especially with a new SEC head, Gary Gensler, who is a known blockchain and crypto expert?
We're on the bleeding edge here on a new currency, a new way of transacting. The biggest thing about this is, how well do people understand the types of securities that they're now buying and what this could potentially mean for them in terms of how much money they have. I don't have as much of a regulatory concern. I think we're finding our way through it. I have more of a concern about, as this becomes more mainstream, do regular consumers really understand what is this currency, what is it this financial instrument that they're all of a sudden playing with.
Blockchain is the critical technology that is driving the growth of crypto. Are there ways in which it could evolve that would make you worried?
I'm bullish. We're bullish. I think that was a real question maybe three, five years ago. Can this thing only take a left or right turn? You saw large enterprises start investing in blockchain. What's been absolutely clear is that blockchain is a technology. It's here. It's kind of like TCP/IP for the internet. These core technologies, they're here. How they're going to get applied and what they're going to unlock, that's the question.
Coinbase just had a successful direct listing and has strong momentum. What could go wrong?
To be honest, I think if they stay where they are right now and just kind of grow organically, I think it's a missed opportunity if they don't get on the path of what other financial-type services can I provide my customers.
I think they have an immense opportunity over there. The good news is, in the short term, all the signals are that they're exploring, they're thinking about all types of things, like lending and rewards to drive more usage and things of that sort.
What about the other players, including other fintechs, the challenger banks and the traditional banks?
It kind of feels like it's another revolution of money. We're making it much easier to innovate in financial services. Other people like our friends at Plaid, they're doing some really powerful things as well. You put all this together, we're making it so much easier for all these different types of products to get created. I read a statistic a long time ago that less than 10% of financial services is digitized today. If you're a challenger bank, you're attacking that space head on. For large banks, you're seeing this and you're saying, "I gotta move."
We're just in the early innings of all that stuff happening. A lot of us were founded around 2010, post-financial crisis, when a lot of this started really happening. And we're really coming into our own. We're maturing as organizations. We're ready for the next layer to start. That's why I just think innovation is just gonna get faster and faster.