We Finally Built “PayPal” for Pakistan | Moiz Jangda | TBT | 512

सामराह कावधीना अजरात. Welcome back to another episode of Thought Behind Things. As you can see, am slightly in a different setting. I am actually here in Dallas for a conference that I will be attending tomorrow. I will put up a video for that as well. But simultaneously, I actually found a very interesting पाकिस्तानी gentleman who is building a very interesting startup. Now the context for this startup in this conversation is driven by, you know, this conversation I had recently with फ़ैसल अफ़्ताब it's on the channel you can check it out as well where he speaks about this sort of financial reset that's coming where digitization of finance is gonna happen in Pakistan and that's gonna be at the heart and core of all of the growth that Pakistan is going to see again. फ़ैसल is not the only one saying this. Lot of people all over the world are now beginning to talk about a sovereign debt crisis, a change in the financial status quo, the economic center of gravity moving eastwards and as you have heard me say this continuously on the channel, I think there is this economic reset is going to fundamentally change how we understand everything about the economy, about finance, about the way we work over the next five years and therefore I think it's very important to begin to understand what that looks like first of all, why it's happening and how it would potentially happen and this particular gentleman is building the rails for digitization of finance but not just within Pakistan because we've seen we've heard of रास्त we've heard of a lot of other things but also digitization in terms of connecting Pakistan to the world. How do you get dollars in efficiently, transparently and then potentially in the future how do you get those dollars out as well? How do you connect Pakistan to the world? We've heard of the पाकिस्तानी you know regulatory body that they have created for virtual assets. Recently they announced you know state bank regulation for that as well so that is a lot of positive news. State bank also announced recently that for a lot of freelancers as well as IT companies you can now keep 50% of all of your revenue in dollars and you can spend that wherever in the world no questions asked. So now the regulatory side of things are also opening up in terms of being more inclusive of the idea that businesses in Pakistan are inherently global and they need to be globally connected in terms of their their costs, their revenues and everything. With us today is Moise Jangra who is the founder and CEO of Pocket Money which is inherently a startup, a product that is building the rails for or building the product for efficiently getting your dollars into Pakistan, managing them. Again, we've heard of such products before as well with let's say Wise or Pioneer but personally because I interact with a lot of freelancers on this channel and you know I think the one thing that everybody is is upset about is the fact that we as पाकिस्तानीs have absolutely no control over a lot of these banks and you know digital banks and you know these finance or fintech companies and our accounts are banned oftentimes we lose a lot of that money and so obviously there's a requirement for local पाकिस्तानी folks who are building those products, who are available, who can be held accountable as well should things go wrong. Always thank you so much for taking the time out and coming on the show. Yeah. Thanks for having me, man. Just to sort of start this off, tell the viewers a little bit about what you do and what pocket money really is. Yeah. Absolutely. So I guess in the simplest

terms possible, pocket money is effectively what PayPal could be in Pakistan for emerging markets starting with Pakistan. Right? So it should be absolutely dead simple for you to download the app, create an account, and boom, you have access to US dollars, your very own US dollar named account, and the ability to receive, spend cash out to your heart's content.

Interesting. You mentioned PayPal, and I feel like, in Pakistan, PayPal has been such a inherent part of the narrative where, you know, people are like, oh, the IT industry doesn't grow because PayPal doesn't exist. I personally find that very curious because I feel like, ok, PayPal is great for for freelancers. You know, you could do a a small gig here and there and you can use PayPal. But when it comes to really the the the bulk of the industry, let's say when you look at India, they're doing $300,000,000,000 of of of services exports, they're not really doing PayPal. They're not getting $500 into PayPal. They're doing millions of dollars in in in in structured banks and and and structured infrastructure. Unfortunately, in Pakistan, when the scale really begins to happen, things really begin to break. And I I saw this tweet yesterday on on X where someone was mentioning how their money has been lost for the last six months because the bank refuses to even acknowledge that the money has come in. So the client has sent the money, they can't find it and they're completely confused. So so I'm curious. Is this just like a wallet, like a small scale for freelancers, or is this something much more powerful in terms of how you manage, you know, the the the the capital?

Yeah. Great question. So I would say far more the latter. I think that freelancers are a perfect market for us to focus on right now because at least in Pakistan, Payoneer seems to be the largest incumbent. And a quick search through Google or Reddit or anything, You'll quickly begin to realize that the amount of hate for Payoneer is unsurprising, but fortunate because there's a lot of room for there's a lot of opportunity to sort of fill that gap. Right? So starting with a concrete use case, for people that have, dollars coming inward regularly, is our current focus. But the really, the idea is anybody should be able to download Pocket. They can today, open an account, and all of a sudden you have access to US dollars to spend them, etcetera. And sort of where this becomes really helpful, I guess, just thinking back to my own lived experience, is turns out that a lot of people are moving dollars back and forth every day. Right? And that ends up showing up in, like, scenarios where someone's getting married. Like, there's a Shadi happening in Dallas, Austin, wherever. Right? People are buying clothes. Where are those clothes being bought from? They're being bought from Boxthon. How's that money getting to Boxthon? It's, like, typically, like, okay. Some cousin from Houston's gonna drive dollars to my house in Dallas or Austin, and then I'm gonna bring it on a flight to whomever. And then right when I get there, there's all this stress. Did you bring the money? Is the money good? And then, yeah, I find the money in an envelope, and then some driver goes and delivers it to some house in Pakistan. Right? That's just inefficient. There's a lot of stress. I don't really wanna fill out TSA forms to take that money, to Pakistan. And it's not only me that has that problem. Right? Any American that has any attached to Pakistan, I'm sure, has been called by some family member or friend that, has been given the request to bring dollars back home. Right? So that's the primary, broader market that we're looking to solve a problem for. But that's essentially remittance. That's a great question, right? I guess we could dig into that a little bit because it's an interesting topic because if you break remittances down a little bit, like, you could think about it as person A in country A has currency A that wants to send money to person b in country b with currency b. But, like, if you start to, like, remove all of those variables, right, like person a, person b, and it's just funny. Like, when someone says bitcoin to somebody else, is it a remittance? Like, traditionally, we don't think that. And that's sort of that's sort of the goal that I at least have. Money transfer should just be peer to peer. Right? And if you're transferring dollars from person a to person b, does it really matter where it's going if it's the same currency? I guess that's for the regulators to ultimately decide. I can tell you our experience in Pakistan already. Our bank partner, we have the agreement of inward remittances with them. Right? Okay. And it wasn't until after we went live when they were submitting, like, tax withholdings and stuff to the State Bank that they realized that the sender is the recipient. Right? So there was this long conversation with the State Bank, like, wait. The sender is the recipient. Can this be an inward remittance? And the answer is I don't know right now. So they have not submitted the transactions to the state bank, but the state bank is aware because the state bank themselves are deciding, like, well, if the sender is the recipient and they're moving their own money, like, what is it? And I guess to be determined, I suppose. No. But, that makes sense. But in terms of,

again, you you created a scenario where you had to drive cash to another cities and the person traveling back takes the cash. I feel like that was, that may have been true a decade ago but now there are a lot of products because when I think really remittance, I I know for a fact I've worked with a few in for for marketing on my Instagram as well but there are a bunch of these apps which essentially with what they say is, you know, open an app, do Yeah. A few Right? And, and you can literally send, a $100, 200, $500 to your naani back home in a matter of seconds and it's literally seconds, right? So they have like a local PKR account, they give you a rate, they lock you into a rate, you send the money and immediately from a local account they transfer that money to whoever has to receive it. And so I'm curious, what how do you differentiate from just a remittance? Okay, use our use our sort of funnel or rail to move money from your account to a third party account versus where a wallet you can park money in our wallet or let's say a US bank account and as and when you need you can send that money back that could very well be in PKR, but that could very well be in USD being parked in Pakistan as well. So, you know, the landscape is pretty wide. Where do you stand in all of this? Yeah. That's a great question. So and I'll tackle the the first question you asked first,

which is I think Pocket's differentiator from, say, Wise or a Remitly or even a PayNear, I guess, in B2B scenarios is that Wise and Remitly are fantastic at getting people in BoxLond, box rupees. Right? But I have yet to see, I guess, a widespread solution that people trust to access actual dollars. Right? So I suppose if, a wedding wedding outfits are being bought from an auntie in Pakistan, right, quite often she wants dollars, right? If she had the opportunity to, choose, almost nine times out of 10 she would say, yeah, give me the dollars. And what option is there for that auntie to access dollars? Right? So what Pocket allows you to do, forget the exchange rates, right, from the sender side, forgets collecting the recipient's Pakistan bank account, their CNIC, all of that. Right? From the sender side, they're sending dollars to the auntie in Pakistan. Right? And what does the auntie see in Pocket the app? She sees dollars. Now she can cash that out to Pak rupees if she wants to. She has a card she can use to spend those dollars. Right? So it's basically like pocket is your dollar hub. Right? Hold your dollars. You can cash them out. You can spend them. You can send them. Are those being held in a wallet or a bank account? Right. So our dollars are currently being held in bank accounts. Once we get approval from Pavara, we'll actually move our dollar balances to segregated wallets per user. But we've removed, I guess, maybe a cheeky way to say this is the cognitive overhead or the neckbeardary required to understand blockchains and all of that. What you see in pocket is your dollar balance. Right? But those rollers currently

are being held inside of Pakistan or outside of Pakistan? Outside of Pakistan. Once they're in once they're moved to a person in Pakistan Correct. They're still parked at, like, a holding center space. Correct. In in The US. So we are a US domiciled entity.

Your dollars are held in The United States. And eventually once you

create those wallets, will those dollars still be in The United States or will Yes, they will be domiciled in The United States. So how does that, now I'll move to the regulatory side of things, right? What incentive does Pakistan have as a as a or as a regulatory body to allow for, I mean, they can't stop you because you you're you're in a jurisdiction that they have no control over. But what's in it for them though? Because the dollar isn't really coming to Pakistan barring when really people have to spend. So for example if that aunty who sending that dress today that dollar lands into the state bank or to a local bank and she gets the PKR the local commercial bank has like a dollar you know holding that grows and that dollar essentially is sitting in Pakistan. Now what you're saying is the dollar never touches Pakistan. The antique and then obviously and that's gonna be my follow up question of how of of what opportunity does she have with her dollar to be able to spend that globally but tell me about your conversations with the government and how they are viewing a lot of these sort of newer products where their control over that forex is increasingly diminishing.

Question. I will say that banks were thrilled to work with us because they're looking at us as a means to bring dollars in. Right? So, ultimately, if we go back to the example of this auntie, like this auntie lives in where she primarily spending her money? Likely, right? Like, I know there's this, like, typical behavior of, like, oh, I'm holding dollars. I should not spend them. I should wait. Right? But what if you could very easily? Right? So Pocket provides a card. Right? And if you spend that card in Pakistan, you're not gonna get charged an FX fee. Your dollars will go down, as one would expect when you buy something. But what the merchant received was bakh rupees. Right? So why the banks are okay with this is because we've created that partnership between us and the bank, and we know that our users will need bak rupees. Right? So if a user chose to cash out, we do it instantly because we have prefunded liquidity sitting at the bank. So the bank has already gotten the dollars. Right? We sold it to them already. Okay. Right? So it's almost like they're getting the dollars ahead of time, and that's based on the demand of our customers. Right? So we've already sold a significant amount of dollars to the bank.

And yeah, we're ready to cash out to बाक़ rupees whenever whenever you want. And the card like is that is that your card? Is that the local bank's card? It's our card. It's your card. Correct. When the when when I say for example I go out in Pakistan and I spend that, you know, those dollars, what's the rate that I'm

getting on that card spend versus cashing out? Yeah. Great question. It is mid mark or it it's SPP's

daily rate is what you would be getting. Okay. So it's not gonna be, like, there's not gonna be a markup Nope. To that particular Correct. And is that gonna be the same in cash in terms of cashing out? Because, again, for a lot of those remittance apps, the reason why they work well is because they tend to give you a slightly better rate than whatever you're getting from the bank side. Both in terms of one of the reasons why, for example, Payoneer obviously gives you bank rate, because that's the state bank's rate. But for a lot of these remittance apps, remittance apps, they're generally $2.03, 4 rupees better than your state bank rate. And then people are now increasingly moving towards stablecoins which is more technical but there is an entire secondary market out there. Totally. Where they can actually make more money cashing out versus

the state bank's rate for banks. Yeah. So with respect to rates, so what we've seen and what we've heard our users complain about with respect to Payoneer is not only are they padding the exchange rate, so let's say the dollar to BOC rate is $2.79, Payoneer will offer $2.70, say, and then also charge you 3% or 2%. Right? So they're not only juicing or squeezing the FX rate, but they're also charging you a flat fee. One thing to note, and people get very creative with this, remittly, I think of late, they will give you a much better rate. How are they actually getting that rate if the ultimate decider of that rate is, I would say, the State Bank in a way, if that's who you're buying your rupee from, is, the State Bank incentivizes these inward remittance corporate accounts. And what happens is for any transaction above $200, the state bank will give you, say, 20 Saudi real. And that happens that settles up at the end of every month. Now you can get very creative with that. Right? It's like, oh, let's say, like, we could that that effectively means let's keep half for ourselves and give half back to the user, but make it seem as if the exchange rate is better. Right? So there's a lot of room to be creative on that front. What we've decided to do is there's two options. You can go instant or you could do standard. Right? In the standard scenario, we are giving you exactly the state bank rate at parity. Right? And what we're doing is we're, at the end of every day, we'll buy those bac rupees for the user and effectively disperse it when, the money lands. For the instant option, we've prefunded. Right? So we're obviously taking on the risk of holding bac rupees. So we'll charge 1% for the convenience of accessing your BAK rupees instantly. Okay. So that's and that was probably gonna be my next question as well. How do you make money? Like, what's the business model here? Yeah. So we have effectively cash out, right, people who want to access their their funds instantly. Also on the, like, bringing dollars inside. So if you're receiving money via ACH or wire in The US, it's two to three days settlement time. Right? What we offer is instant deposit. So we'll get a signal from the bank that funds are scheduled. Now, look, if you wanna access that money instantly, we'll offer it through you. We'll we'll notify you of it through a push notification. And, if you wanna access your money instantly, you pay a 1% fee, and, you bang. We have your money in your balance immediately. And the cool part about stablecoins, which we're making progress towards with Pavar and their sandbox application, is all customer balances earn yield naturally. Right? So simply by people holding balances, we have yield to be earned on our side. Now we'd love to share that with customers, right? But the interesting part of this is just the general cultural sentiment and outlook on yield, interest, etcetera. So, completely different psychological problem to solve. Makes sense. What about outward

spending? So, your the dollar for for the average for the aunty who is holding her dollars on the Pocket app, let's assume and I think this is a major problem for Pakistan, पाकिस्तानी businesses particularly. If they want to spend on Facebook ads, it's an absolute nightmare. The limits on पाकिस्तानी credit cards. I mean, for a lot of people, particularly for that aunty who's doing a home based business, for example, she probably does not have really great access to to banks anyways. Getting a bank account is a nightmare to prove that she's doing a legitimate business is a nightmare. Getting a credit card is almost an impossibility. And so I'm curious and obviously because she doesn't have that credit card, now she has to go to a third party agency, that agency is gonna charge Arm and a leg. Arm and a leg. There's a 10% I think tax on dollar, you know, dollar spend on cards anyways. So the the net cost of when you really look at in terms of productivity, I'm putting an ad on Facebook, but I'm in PKR. The government is taking tax on that transaction. The banks are taking a ton of money on that transaction. Facebook is then taking money on that transaction. And then, you know, wherever that ad is appearing, that that money gets distributed. So I'm probably paying a lot more than what people across the world are paying, even though I make a lot less. And that's just the the the first problem. For a lot of other people, there are limits. I know for a fact a lot of these, particularly fashion brands, the amount of money that they spend on on on ads is just phenomenal. And their credit cards more often than not are the the spend is too high for that whatever $30,000 limit annual. So they end up going to third party agencies and that's just a nightmare again. That's another layer added to it in terms of costs. Does Pocket right now allow for them to be able to spend money online for example on on these different services, sending that money to let's say a vendor in x y z, let's say The US for or or I don't know. I mean there are freelancers all over the world. Know, people are doing creative work and so on and so forth. If I have to pay them, can I use those dollars to pay through pocket? Absolutely. So you can spend with your card. It's a Visa card, Visa signature card, US dollar denominated.

So when you go online to type your card details in, you are spending in US dollars.

The merchant processor, merchant acquirer are receiving US dollars. It's a debit card? It is a debit card, yes. And so I mean obviously for for let's say Facebook or or or apps it's easy. You put the credit card information or debit card information in. What about transferring to individuals? For example, I'm here in The US. I work with someone in Pakistan. They're doing let's say we do a podcast. They have to pay me a thousand dollars for it. How do they go about it? Do I make a Stripe credit card entry for them? Or because normally it would be a bank transfer and that's just the easiest. But obviously Stripe has its own 3% fees and so on. So do they spend using a card like that or is are there ways to transfer it using bank accounts with no fees attached? Yeah, great question. So,

and the assumption here is is that the other side has dollars to give back to you, right? So we'll get into that much tougher problem in a minute. But let's assume that someone has a dollar balance with Pocket. Right? Let's say you don't even have Pocket. Can you send money to you? Right? So at this very moment, as per what's live today, no. But in our very near near term feature roadmap, you being like, someone in Pakistan being able to send via ACH or wire to your bank account? Absolutely. Right? And, yeah, because we have the ability for an individual with a pocket account and pocket balance to say, hey, Muzambol, give me your bank details, and I'll send you US dollars there. And you would receive it in your bank account just as you would anybody sending you money in The US asking you for your bank details. Right? In addition to that, if you were to be a Pocket user, we have P2P as well. Interestingly enough, and this is barring our sandbox application with Pavara, which would be if you're open and willing to accept stables, simply send over a stablecoin address, and they can instantly send your or their pocket balance as as this as a stable of your choosing.

Interesting. And so you're saying essentially if I if I'm if if that aunty in Pakistan is a pocket user, she has USD balance. Right now she can't send it but you're you're building that

Yes. That capability. Correct. For you, for her to send money to you without you being a Pocket user, correct. Ok.

What about and again now I'll come back to where I started this conversation. Where we're imagining a world where anyone can send many money to anyone and that's I mean that's the that's the normal system all over the world. With Pakistan, with a lot of developing countries but in Pakistan particularly, we have capital controls and the I mean dollar is always such a weird conversation. You know, it's like you feel guilty for holding dollars, for getting dollars, for spending dollars as if you're doing something wrong. I mean, it's technically when you think about it, it's your money and you're a global citizen and you should be able to convert that. You can have, you can argue on the rates. The government can figure that out but I should at least be able to buy dollars, you know, if and when required. And so you've had these conversations with with the regulators as well. You've you've you've you're looking at, you know, पवारा as well. Do you think these capital controls are gonna be there forever and there is absolutely no way? For example, if that aunty today decides she has no USD balance, but she wants to work with me and I'm sitting in The US now. Right now what happens is whenever someone from Pakistan gets in touch with me, I literally and this is this is very interesting for the for the viewers as well. You know, a lot of people think, oh, you know, you're big in Pakistan, you must be making bank. The fact is I'm not because I don't take any business from Pakistan because that money is useless to me if I if I and I don't have any family there as well. So, barring obviously the the the resources that I've hired, So I make some money and and I just park it so that I can pay people their their, you know, tan high end stuff. But barring that, it's it's useless because I can't move that money out where I have to spend. Do you think that would be possible at some point in the future?

I think it honestly has to be Because, especially as the world becomes, like, everywhere in the world is coming up with different technology and paying for that tech, Boxathon is quite hampered at the moment, quite honestly. People struggle to access, various AI tools. They struggle to access things as simple as, like, say, Figma, Notion, even something as easy as, like, paying for a peacock subscription so they can watch Premier League. Right? Simple daily necessities that there should be really no question about. Right? In terms of productivity, would say Pakistan as a nation would naturally hamper itself if it prevented its citizens, Pakistani residents, from leveraging those tools to express their creativity. So I think there will be a natural requirement almost for Pakistan to be to be at the forefront, of creativity, of productivity, of technology, to be able to spend and utilize these tools. And if it just so happens that access to those tools requires access to a different currency, the state bank and the government have a very real decision to make. It's like, do we hold our country back and our people back from innovating because we're worried about capital flight? Or do we let this happen and keep an eye on it? Right? Now, obviously, I'm not, a government member or a member of the State Bank, but naturally, instinctively, I would say our people should not be, like, unable to access these tools, utilities to be productive. And I would be very surprised if the government prevented just the general people of Pakistan from from participating in the global economy. I'll

flip the switch now, playing the devil's advocate. For the government, their perspective is, and this is driven by Pakistan's own history, and I would argue that's still led by the policies of the government but having said that, the moment they allow people to freely be able to get currency, You you see something happen the same as what happened in Turkey for example where your local currency ends up becoming complete trash. People just hold that money in dollars And there is a second order effect where people would spend that money on, I don't know, Netflix or for for for for the government or for a lot of other people, it's not productive spend. It's consumption for useless things. But the second order effect is that your oil is getting expensive and your petrol is getting expensive, diesel is getting expensive and everything in the economy become becomes expensive, right? Because it is dollar packed. And so the absolute concept of free market tends to be the most or tends to hurt the the the poorest segment the most because it's gonna drive up the cost of the dollar because the demand is just so high. And so one thing that you said was very interesting, which is which was either you create this sort of conservative regime where you're like, no dollar movement is allowed, and that what that's going to do is that's always going to prop up a हवाला market. And that's what's happened in Pakistan. It's it's absolutely crazy. I would argue if you truly crack down on the हवाला market, I mean, this was a a statement from the government minister recently where he said over the last three years or two years, a $100,000,000,000 have moved out. $100,000,000,000? That is like, that's three x your annual exports, three x your annual remittances. So clearly, that money is moving out one way or the other and more often than not, that money is being moved out by a very small group of very rich people. But that notwithstanding, if the government can regulate this and provide a structure, how do you see that? What does that look like in your opinion where the downside effects can be controlled but the positive effects can be allowed as well? And what I mean by that is, I mean, the absolute free market would be I could have in Pakistan, I could have, like, a pocket account or a USD account. I could take whatever cash I have and immediately convert that into a a USD, and I could pocket wherever, and I could spend it. I could go to, I mean, I don't know, Dubai or Vegas or whatever and spend it in a night. And a lot of people would do that, right? The alternate would be, ok, you can you can immediately convert your PKR but you can use it for x y z services only. It's more limited, it's more controlled. And because the government is getting all that data, they're able to tax you in the way that they tax anything else, not in any additional way.

Does that make sense? Like, how do you see that sort of panning out? I think what you've just painted a picture of is absolutely the right way to do it, I would say, in order to balance in order to find the right balance to sort of start opening up access to global services. Right? Because to your point, if you just blew it open one day, and if there was a huge scare in Pakistan about the Bakrupi. Right? Like, you could easily see capital flight happening. Bakrupi goes into free fall, and, like, you were we're in another Turkey situation again. Now, I think that doing it incrementally... Or let's take a step back and say, this money is going to move anyway. Right? It's just you have to have possibly... Yeah, you just have to have a certain risk appetite to do halal. Right? But at the end of the day, I think everybody in some form or fashion, has had to resort to that for very genuine reasons, right? Obviously, there's good and bad, but if this money's gonna move anyway regardless, why not start opening up, like, you know, I guess, regulated genuine channels to do so? And in order to prevent that extreme case of a free fall, why not just start opening up, like, use cases incrementally exactly like you've said? It gives the government, the state bank, the ability to, for better or worse, monitor where spend is happening. And it gives people that aren't usually willing to take that Hawala risk, the ability to now access services or whatever goods they wanted to access in a way that doesn't feel guilty because, like, look, let me find a cousin that has somebody in Houston. I'll give you apocropies. You give me dollars. Like, look, dude, I just wanna watch, like, Premier League Yeah. Basically. Like, I think that becomes more possible. And would the government have an issue with somebody just watching Premier League on a Saturday through Peacock or NBC? Like, I would be very surprised if that was the case. That'd be very weird based on historically how Pakistan's government has been. Right? So I guess a very long winded way of saying, I think you've basically come up with the best possible way for the Pakistan government to open up money out effectively, but in a way that prevents, yeah, I I think ultimately what everyone's afraid of, which is,

like, the currency going into FreePoll. Tell me about the stablecoins. You you mentioned that you've you've submitted an application for as well. Yes. What's the thought process behind that? And and and how do you see stablecoins in in in all of this? That's a very good question. There's a a very large likelihood that I may go on for too long about this. So,

yeah, I guess we have submitted a sandbox application for Pavara. And, if you think about pocket as a dollar balance, and if you think about, I guess, means to receive, send, or spend dollars as a spoke to your dollar hub, stablecoins become one of them. Right? So assuming we get sandbox approval, using Pocket, you could receive money, via USDT or USDT across all the nine blockchains that both stablecoins are supported on, and you receive the money as a singular dollar balance. Right? So we're removing all of the cognitive overhead or the neck beard you need to grow in order to understand the complexities of crypto into just a very simple balance that anyone could really understand. Right? What does this unlock for people? It unlocks another spoke to receive spend send money. Right? Without necessarily having to think about it. Right? So what this opens up is, and by the way, PayPal to Pocket works today, but it makes it even faster, right? So today, if a PayPal user in The US wanted to send money to a Pakistani, if the Pakistani has pocket money, the PayPal user can pay Pocket today Because the pocket user has a named virtual account, they give the PayPal user that money sends. But that takes three days, right, because you're going through Tradvi rails. And God knows what PayPal's financial rails look like. There's probably eight correspondent banks and blah blah blah. Right? Really, the benefit of stables at the end of the day is, like, you cut out the noise of correspondent banks and the transfers instant. So stablecoins are, honestly, a very late solution to the problem of correspondent banking or Swift.

Right? So for the average user, there's not gonna be a lot of difference. It's not the reason why I'm asking this is I remember late last year I was doing a project and and, you know, the gentleman said they were in Singapore and they said, okay, we'll we'll we'll send you money through USD C or T or something like that. That's my first experience, to be honest. I mean, I've studied a lot of this, but I've never really gotten into it. I never really got into cryptos. And so I went to my brother, I was like, okay, there's a wallet, and then there is this huge string. And then it's weird. And I could very easily see a vast majority of your regular users cannot go through the user experience of transferring USDC, USDT of, you know, keeping that infrastructure of those wallets. And so is, is the, is the whole backbone of USDT or USDC or stablecoins going to be in the background, making the transfers more efficient and more transparent while the front just looks like the way that I'm used to. Yeah. Money in, money out. Or is it going to be like, oh, now you have a USDT wallet with, like, a weird address, then yeah.

Yeah. Great question. And to your point, man, I don't think really anybody cares which one of nine blockchains my USDX is on. Right? Look. Just want my money so I can spend it on whatever I wanna spend it on. And that is absolutely the use like, the user experience that Pocket has strived to achieve. And we're not really that's that's what we've built thus far to date. You should not have to care about, like, look, USDC on Solana versus Ethereum versus, I don't know, pick your blockchain of choice. Because in order to, I guess, convince my mom or my family at home to use Pocket, the moment I say USDC, blockchain, whatever, I've already lost their attention. Whose responsibility does that then become mine? Right? And did I really solve the problem I set out to solve ten years ago? Absolutely not, because I'm now the person again who's like, hey, Mo, like, come. I need help sending money to Pakistan. It's like, okay. Well, I guess I failed at my mission, I guess. So, absolutely. Long winded answer to your question is stablecoins

are effectively dollars, and that's how they will be in pocket. That's how they are in pocket today. No. That makes sense. We do have a very limited time in the studio, so I'm gonna sort of wrap this up. But I'm curious though, what's the vision here for? And are you guys exclusively right now just focusing on Pakistan? Or are you looking at other sort of developing nations as well or the Global South per se? And what's the vision here with

what you're building longer term? Great question. So at the moment, we're primarily focused on Bokksthan. I feel like of all of the competitors that could and have tried to enter the Bokksthan market, I think generally those competitors have made the mistake of attempting to tackle too many countries at once, and as a result, they don't pay as much the amount of attention you would need to really grasp the culture and trust needed to to have an app that people download and use every day. On the flip side, we are launching Pocket in Canada, in The US, in Australia over the next two or three weeks because it just so happens that Pakistanis are everywhere, right? So Pakistan will be our focus in terms of an emerging market for the foreseeable future.

Makes sense. What's the upside here, though? I mean, I know that you guys are funded, and so you must have had a, you know, there's a TAM Sam startup deck that everybody makes. But what's your vision? What what do you see happening over the next, let's say, decade or so? Like, do you think the पाकिस्तानी market is big enough? Because this is I mean and the reason why I'm saying this is because Pakistan is always going through a नाज़ुक मोड़. There is always you know even today I was reading the the real exchange rate is is again at one zero five and so we're looking at a potential devaluation. There's a lot of turbulence in the world and one of the reasons why companies tend to ignore Pakistan is because when it comes to forex, it's such a nightmare because sometimes the prices go up and down, the state bank rates and otherwise and you do end up suffering a loss in that, you know, during that turbulence. And so when you guys have made your projections and you guys have made a sense of what this market really looks like, is it more of a, okay, there's a turbulent time, but we'd also then do see an overall sort of J curve maybe. And then again, what's what's the overall scale over the next ten years that you're looking at in terms of Pakistan? Yeah. That's a great question. So I think the ultimate overall vision is that

sending, receiving, spending money should be the most boring thing you do every day. It should just be an extension of who you are. Right? Like, I need to send you money. I don't really care where you live or what currency you use. Right? I need to send you money. I should be able to do that in ten seconds. Give me your phone number. Done. Right? I think ultimately, globally, that's the goal. Now, that is an incredibly lofty goal. We have to start somewhere. So we've chosen to start in Pakistan. Will we continue to solely focus on Bokkston over a ten year period? That's likely not the case, right? But to crack Bokkston correctly will absolutely take time, and that's something we're willing to spend the time on. With respect to doing the Tam Sam Som Dance, I can tell you that raising money to build a fintech app for Boksan is not easy. Right? But the numbers are there. Right? And we've seen it even having launched for a week. The potential is there. If the only incumbent is Payoneer, I think we'll be just fine, hopefully, so long as we don't spawn into the same traps as pain here. I'll give you a quick example as to why Buxton is a hard market to crack. IDV platforms for KYC are typically US oriented or Western oriented. I have spent the last probably ninety six hours fighting like the systemic discrimination of the most common name in the world, Muhammad and Abdul-Rahman. Right? Any Muhammad or Abdul-Rahman that has attempted to onboard 2Pocket was immediately getting put into manual review, and the same six 63 AML hits were coming up for all of them. And it's like, why? You telling me that all 16 Mohammeds are the same terrorist? It's like, absolutely not. And when you go and dig into these cases to disposition them, because we have at the ultimately at the end of the day, we have AML reporting regulations. So we have to at least show that we've done our due diligence. You'll go and look at, like, why the IDB platform thought that this Mohammed is a terrorist. Right? You click on the page, summer.gov.pk, can't even access them, not even through VPN. Right? So we've got employees in Pakistan opening these pages for us and checking for us. But the most egregious case was that, like, this AI agent, OFAC analyst of this IDV platform we use said there's a high likelihood that Mohammed bin something was a terrorist. Therefore, like, you know, sanctions hit, like, crime hit, terrorism hit. And when you visited the website, it was a website to download a video game on Android. So it's like, wait a minute. Are you serious right now? This is, like, a world, like, world established IDV platform. Can't onboard a Mohammed.

Right? And this is a global, like this is a global platform or Because is this I'm curious, पाकिस्तानी names are not like, how are Saudis accessing global finance so easily? How are people in the Mid like all across West Asia? Dubai is the haven for people to open bank accounts, move money, whatever. Is it that मुहम्मद from Pakistan gets that issue? Or is it मुहम्मद Yeah.

So that's a great question. Question. There are a lot of signals that go into assessing the risk of onboarding a customer. Where is your ID from? Are you using a VPN or not? What is your country of origin? Where is your ID from? So the moment you get to, like, Pakistan origin using a VPN, CNIC name is Mohammed, the likelihood that that Mohammed will get flagged as, like, a a terrorist or somebody on a on a sanctions list is, like as of up until yesterday in our experience 100%.

Is there a is there a fix to that? Because I feel like I mean over the last five years as I've spoken to a lot of fintech people particularly focused on Pakistan I I see a lot of enthusiasm. We're going to come in, we're going to solve this, you know? And nobody else could, we're going to solve this. And I feel like that's the roadblock that they hit where they did not have the the scale or the access to be able to. They could even move around the state bank. They could even move around the regulations in Pakistan. But when it came to really the global side of things, they hit roadblocks. So I'm curious. Just two quick questions before we wrap up. Do you see a pathway to solve this? Or do you think you're just going to build efficiency within your systems to get whatever speed you can get? And then follow-up to that is, even if you do get that acceptance right now, things change and that's one of the reasons why YZapioneer and a lot of these other platforms end up, you know, banning people mid journey and then those same people are unable to access their funds. And so, what's the, how do you, how do you solve the trust problem in terms of when people do end up opening an account with you and they do end up getting their KYC done and they're they're they now have access to be able to get those funds. How do you ensure that their their accounts won't be blocked in the future? And if they are blocked in the future, how do you ensure that there is a, you know, resolution mechanism that actually works and you don't ghost people, midway?

That is a fantastic question to ask. And the answer is, unfortunately, tech can't solve this problem. I will just come back to concrete examples. Firstly, we've gotten explicit approval from our US bank partner to provide named accounts for our customers. Right? And coming into this partnership, both parties knew well and good that, there was gonna be a risk adjustment that was required. Right? Because this bank banks US individuals. Have they ever onboarded a Abdul-Rahman like a Mohammed Saqib? Absolutely not. So firstly, you have to have a contracted willingness to adjust your risk appetite. So that's done. Right? At least it's papered. Right? So that, we can't just get rugged by our bank partner, and therefore, all of our customers' balances suddenly disappear. Right? But secondarily, like, every regulated fintech is using an IDB platform. So we onboard an Abdul-Rahman, and after spending time dispositioning 63 false positives, we then pass it along to our bank partner. They're going to hit the same exact AML hits, and they're gonna be like, man, 63? I don't know about this guy. We're gonna reject them. Right? So you have to have that communications channel open for working very closely with your partner bank that is ultimately providing you with a bank account at the end of the day. And without that, it's not a solvable problem. But if you are willing and if all parties are aware and it's inked so that nobody can just bail because they decided, well, this is too much for us. I think I mean, that's how we are solving the problem today. When Abdullahoma opens a Pocket account, does he

infrastructurally have a dedicated

US bank account? They have a named virtual US account. So the slight difference there is that we're not providing FDIC insured depository accounts, right? For those in The U. S, you must have a Social Security number or you must be able to prove residency

in The United States. No, that makes sense. But my question is, what I'm curious about is, if you have a named US account, do you think in the short or medium term, you will eventually or whether that's through you or that's otherwise, we might begin to see a wider range of banking products emerge because and the reason why I ask this is, पाकिस्तानी banks are generally inherently risk averse because the entire model is you just get those deposits, park them in the government bonds and you know, the money is great. Yeah. And so nobody's really serviced the private sector and I think that's such a huge missed opportunity. That to solve that problem for PKR, if the if the government bonds are always going to be more profitable, everybody's going to do that and so I understand I don't even expect local banks to do that unless the government policy changes. But in terms of, let's say, the US dollars, and there are tons of people who are now doing remote jobs, freelancing this and that, their profiles are being made. I'm curious whether three years later they might be able to get a credit card on top of their, you know, pocket account because of them having received, let's say, thousand dollars consistently first of the month, last three years. Can they access dollarized mortgages? Can they access a lot of you know banking products that have existed over the last hundred years? They just haven't been able to provide the same to पाकिस्तानीs and again because your local banking infrastructure has never really built those products and those don't even I would argue have the mechanisms to even do that risk assessment required for the private sector. And so do you think you'd ever be able to go there with the infrastructure that you have in place right now? Absolutely. And that is the concrete goal for Pocket.

So and to your point, all we need is data, right, in order to how does somebody risk underwrite a mortgage or a loan for dollars? It's like, well, it turns out we just need some transaction history, right? And once you have that, there are well established algorithms to risk underwrite depending on your risk appetite. We are setting up for that effectively. And on top of that, like, the ability for Pakistanis to invest in The US stock market, right, or to take it a step further with stablecoins, crypto, blockchain, etcetera, to invest in any kind of financial vehicle that you would choose to do so. Because it's your money at the end of the day, you should be able to do what you want with it. For us to be able to provide that to customers, all we need is probably six months of transaction history, not even for that customer, but a broad range. Right? So we can begin to understand the heuristics. We have a risk engine behind the scenes, to start underwriting and taking these risks alongside customers. So another long winded answer to say absolutely that is the plan. 100%.

मोह, thank you so much for taking the time out and sharing all that insight. Right now, if people have questions, do you guys have a mechanism to answer those? Because again, finance requires a lot of trust. And so I'm curious how it's one thing to say all the things that you've said. I've been able to meet you. I have the privilege. For a lot of the viewers, you know, they're skeptical for all the right reasons. And so how do, how are they able to get a better understanding? Because this is money. This is a hard earned money of freelancers, of people who, you know, do remote jobs at a fraction of the cost of what's happening in The US, you know. So what what does that look like in terms of trust and

customer service? We absolutely understand that trust is the number one number one thing we need to gain from our customers and we're a small team it's six of us right? We have a WhatsApp customer support number, and all six of us are on WhatsApp all day long answering inquiries. We have just an overwhelming amount of inbound that we're primarily taking all of our time to answer questions in right now. I'll also be in Bhakhstan starting in ten days for about a month. So, yeah, looking to meet as many customers as we can. We've got a launch event coming up in Boxthon. So And where is that happening?

At Nastup. Yeah. In Karachi. In Karachi. Yep. I see. Yeah. Okay. Sounds good. So I'm gonna wrap this up. Thank you so much for taking the time out and sharing all that experience. This has been awesome. And for all of you guys, let me know in the comment section below, have you heard about Pocket? Are you, do you intend to use it? What services are you using already? And based on this conversation, you know, what is the upside or downside that you find in this particular product? I would personally urge for for you to go and create an account just for the heck so heck of it. I don't think there's any cost to do that. And then if you hit a roadblock, if you find an inefficiency, I would love it if you can send their customer support that insight because I think on the stage that they're in right now, whatever you tell them is going to be extremely extremely valuable. But I do believe that we should be supporting, you know, Pakistan led, fintech rails. The more people join, the more data there is, the better solutions they can provide for people. A lot of times, there is this sort of a tug of war between the customers and the service providers, where the customers are like the service provider providers are terrible. They don't do really anything. But in my opinion, I think banking is a problem where particularly for Pakistan. I think data is huge huge problem. People need to use it more and more and more. And as you're able to get that data, you can then begin to iron out a lot of the issues that you guys face as well. So create an account, see where it goes and share feedback with them as well in the comments section. I'd love to know your insight on the product and overall particularly the future of finance for Pakistan and what we spoke about in terms of the accessibility and the opportunity to have dollars to move your capital easily. What do you think about that? But nonetheless, it was same as a lesson, Zedhi. You are watching ThoughtBand things. Thank you so much for watching and I'll see you in the next one.