Unlocking Opportunity Through Dollar Access with Alvaro Correa* of DolarApp

Alvaro:

We believe that people being born in one place or the other should have the same opportunities as those who are born in one place or other with much better offerings.

Jeremy:

Hello, I'm Jeremy Allaire, and this is The Money Movement. I'm very excited to have as a guest today, Alvaro Correa, who is the co-founder and COO of DolarApp, an emerging company in Latin America, and maybe eventually the whole world, that is trying to bring digital dollars to as many people as possible to make it simple, convenient, safe, and easy to use over the internet. And it's a fascinating company, a wonderful story, and I think really ties together a lot of the things that we've been focused on here at Circle. It's really, really a pleasure to have you on the show, Alvaro.

Alvaro:

Thank you, Jeremy, for the invite. It's really a pleasure to be here with you.

Jeremy:

So maybe we can start with a little bit about your own story. And where did you grow up? And of course, what did you experience in the economy and the financial system as part of your growing up?

Alvaro:

I'm Spanish, as you can feel in my accent. And that's already near, but I started my career in Boston Consulting Group as a management consultant. And there I spent a lot of time supporting financial institutions in Latin America. So that was the first time I spent my time with people in Latin America, learning about the culture, how they live, how they do their financial life. I spent time there when I found out about this first problem, the problem that we're trying to solve. Then I moved to London to work in Revolut. I started as an executive associate for the B of Growth. I spent like six, seven months doing a lot of things in growth, especially in the referral channel, which was one of the largest channels of acquisition for Revolut. Then when COVID came, we moved to work with VP of Revenue, Alan Chang. There we were mainly working on making the company profitable. So, you know, like COVID came, payment was like, you never know where they are going. Travel like disappeared, Revolut being like a travel car. So we had to reroute the company to improve all financials. And we managed to make the company like break even by six, seven months after we started working on that. Wow. A large part of that was driven by Crypto, that there was a big boom. Revolut was involved in this business. We were also lucky to have that trend. And after we achieved that goal, I moved to the subscription slash premium department, where I was managing the whole department. And after that, when I started my adventure here in DolarApp , I started with my two co-founders, Fernando and Zach. Both of them are also from Revolut. And with Fernando, I was working also on BCG. It's a long story since we have been together. The three of us. Experienced the problem in Latin America. And then in Revolut, we were able to get close to the Crypto, to the world, to the new capabilities that were being brought to the industry by the blockchain. And from there, we got the idea to be there.

Jeremy:

I want to get into the DolarApp , of course. I think it's interesting the time you spent at Revolut. I think Revolut is obviously well known as an app. As a cross-border app. As an app that made it simple and convenient to move between currencies, to get online very easily. And as you said, you worked in the growth department, one of your roles, and really leveraging the users to drive referrals and drive growth. It's certainly a great case study in the fintech 2.0 era of mobile apps and of digital money. So that's obviously a very fascinating background. And I think when we met first time, I don't know if it was. I think it was you who said it or I who said it. It was sort of like, it feels like you're building like a Revolut for Latin America. But you're building it on a completely new architecture, which is stable coins and the internet financial system, not the legacy financial system. And sort of you're looking forward to a better financial system. And I think a lot of fintech 2.0 products, the magic that they did, like instant conversion between one currency and another currency or immediate availability. Of funds that made it appear like settlement was instant, was sort of behind the scenes, actually still piecing together a lot of the legacy system, underwriting risk and things like that. And as you know, I had some experience with CirclePay, which was a similar product to Revolut as well. But that kind of building on the legacy infrastructure versus building on this new internet financial system and what that represents. And when did you know, like in your heart or in your mind? When did you know that the technology was there to be able to build like a next generation model for this?

Alvaro:

Yeah. So on this, and starting first, like, overall in the industry, as you mentioned, like, a long time ago, you have the banks with the brands. That was the distribution, like, the more branches you have in the most remote place, this is how you win, you know, with human relationships one-to-one. And then, like, 2.0, you know, like, all these digital banks, but they realize that you need to have, like, all these branches out there to win consumers. So you have the digital players, like, Revolut and all the other players, and they have really, like, amazed all consumers with very nice UX, amazing experience in terms of, like, fast settlement, how fast, like, the app works, like, how easy it is to manage your financial. That has been a revolution. People are now moving to this kind of bank on this platform, and it has been super good for the industry. Now, like, the problem, I would say, of these institutions, as you mentioned, they are built over incumbents' rails. So you have the bank, the front end is super nice, but the back end, it's kind of built by similar, like, not exactly the same, but similar platform that all banks have been built, you know. That means that all the costs, like, all the inefficiencies that you have, like, like, sweep, you know, like, super, super legal.

Jeremy:

Time delays, fees, risks. Yeah. 

Alvaro:

Exactly.

So now we also see that there is a 3.0 generation of digital banks, which is, okay, now you can have, like, this amazing UX, but you can revamp the whole back end. You can have a back end, which is robust, fast, and cheap. This is, like, the way we see that, you know, like, we see that the industry is moving to, okay, now you have amazing UX, but also amazing, amazing back end, which allows you to be super efficient and allows you to give, like, the best pricing out there to the market, which at the end of the day, if the users see that it's cheaper and you have the same experience, they are going to choose you, you know. Then, like, more like answering, like, this second question of when I realized, like, this was, like, an opportunity. I think that during our time in public, we were knowing about blockchain, like, blockchain. 

All the good things that they were bringing. But we never take a step forward until we saw that there was an opportunity in the market, you know, like, you can have an amazing back end, you can have efficient, you know, and you can reduce costs. But if you're not solving problems for consumers, then you will just have, like, something that works very well, but not what you use. When we were combining knowing about this new technology with our experience in Latin America and the problems that they have in that region, you know, that not only, like, problems to like access to better financial life, but also, like, how, like, all these banks were not, like, really been progressing in the 2.0. No, it was kind of, they were kind of struggling, you know. So we kind of combined that, this opportunity of solving a problem and the new technology. And for us., it was very clear. I remember with my co-founder in London, I was living with him. So we were working together and we were in the same flat in London. And we were, like, more keen, like, bringing a lot of ideas to the table. We had, like, entrepreneurs in, like, mind. And when he came up with this idea, it was, like, like, this is very clear. Like, it's a massive problem. It is a clear solution, which is coming now to the industry. There is no better moment to do this. And then we decided to do that.

Jeremy:

I want to get into more of where the product is. But I think, obviously, as the issuer and operator of USDC, where our stated goal is to ensure that every person in the world with a mobile device can have a digital dollar account on their phone, it makes us very excited when we hear DolarApp . And so the name of the app, it references the dollar. It is very clearly, like, digital dollars. And within your target market, Latin America, there's this sort of shadow economy for dollars. Some countries are officially dollarized. Some are unofficially dollarized. But there's this role of the dollar. And now that we have this new invention, which is internet-based digital dollars, it's this leapfrogging. Like you said, this third generation, it's like this leapfrogging into, like, a new financial system. How do you think about the positioning of the product? How do you think about the positioning of the product as a DolarApp ? Literally, the name of the company, the name of the as a DolarApp app. And then who today, who's the target customer for the product? Because there could be many different types of people who might want a DolarApp . From our earlier conversations, I know you have the initial target market is very specific. But maybe also, as you think about this on a grander scale, on a long-term scale, who do you think eventually could use DolarApp ?

Alvaro:

So starting first, it's very clear we were kind of like digital DolarApp, dollar. When we were starting with this, I called and we discovered the problem. So Fernando is also working in BCG and myself working in Latin America. We have a couple of stories that were leading us. To think that, okay, dollars are important in Latin America, but they seem not to have kind of access or seem that something is broken. So people have the need, but not the solution. Like when I was building from my side, I was working for banking in Panama where the majority of clients were not from Panama. They were from Colombia and Venezuela. So people were coming from Colombia and Venezuela to bring their dollars so they could be banked in dollars. And that was the only solution that we had. There was no solution in Venezuela, not in Colombia. So they had to go to Panama to have a normal standard dollar and financial life. That's one. And then the second is Michael Fonder Fernando. He also liked working in, actually in Colombia. He was working also with BCG and one of his, made of the project was one day going to Miami with a suitcase full of dollars. And Fernando was like always telling him like, hold on, like your suitcase, you go to Miami, you crazy? Like, what are you doing? Someone can take your suite, no? Like you go to the border, they want to see you. What are you doing? No, no. Because I know you need to bring like less than 10K so you can pass. So it was like a lot of mess just to be banked in dollars. So we know about the problem. But then when we were doing our research, it was like, there are data points that tell us. That something is happening. We did a very simple analysis, which is, okay, now there is a boom about Bitcoin. I mean, that time. Yeah. They're not moving to Bitcoin. 

Everyone is talking about Bitcoin, but let's compare in Google search what people look for. Do people look for Bitcoin or do people look for dollars? And to our surprise and kind of confirming our hypothesis, like dollar was like 10 times more search than Bitcoin. So it's like, okay, Bitcoin could be a solution, but people want dollars. So we're moving to something we are like people don't understand or people are not like looking for and not just go to digital dollars. So that's why we say, okay, this is very simple. We just need to offer what people are looking for. And we have the way, which is via digital dollars. And from there, all the branding, the name, the name itself is like, we are just giving what people want. This answers the first question. And the second question is, who are we targeting? So all these people that I was talking about, they are suffering from this problem. So you have people in Mexico, Colombia, Argentina, that they want to have like a digital dollar asset. So we provide that solution. There are people traveling from Mexico to the U.S., around 20 million every year traveling there. And they have a Mexican car. So when they go to the U.S., even though they don't have transparency on paying in dollars, you can imagine all the fees they're being charged. And also like when they're moving funds from the U.S. To Latin America, you can hold any digital, any dollar asset, like whoever is doing the conversion, they're going to do whatever they want. So people are skewed on when they're doing this transaction, which is something which happened a lot. But people don't have like an efficient solution. So we are targeting those people. People who have a massive problem that we can bring a hundred X experience and cost, they will be advocating for DolarApp. When you show such a big problem to a person, that person is going to talk to his friend, use this because this really serves a problem. So we are targeting those. People who travel, who send from the U.S. And who wants to hold a digital or a dollar-denominated asset.

Jeremy:

We have this focus at Circle on really seeing growth in digital dollars as a store of value, cross-border transaction experiences and remittances or moving value. Sounds like you check all of those boxes as well. Why USDC? When you think about digital dollars, what is it about USDC that is important for you guys?

Alvaro:

So when we started, we were agnostic. There were a lot of options on the stablecoins. So we did our work. We normally, internally in Norella, we say that we need to do the work for the client. So we need to do the best for our customers. And of course, we have to choose the best currency, the asset, the best one for our user. And the most important thing here was security. We started with different stablecoins that were out there. And probably USDC was the most transparent. And also the approach that the user was having on like, okay, you have either Treasury bills or treasury bills, and you have gas. It's like, okay, this makes sense. If we were building a stablecoin, we will be building with gas and maybe some treasury from the U.S. Government. But we believe this is the safest. If we believe that these audits that are coming and taking them out there are true, which of course we have to do the work to confirm that was correct. Then it's like, for us., it's what makes the most sense. So that's the reason why we chose USDC.

Jeremy:

As you think about the future and given your background with Revolut as well, there's a lot of innovation that's happening on blockchain networks. There's building blocks. People are building for on-chain currency exchange and on-chain borrowing and lending and all kinds of other applications. And today you have this cross-border travel store value, but it is part of your decision to build on blockchain infrastructure and integrating the internet, financial system and its part of that also focused on what might be the future of the way financial products are made available to people.

Alvaro:

The solution that we're going to be using for bringing more products and solutions to our customers doesn't need to be blockchain. We don't love blockchain just for being blockchain. If blockchain brings something that is useful and better for our customers, we'll be using it. If we don't find that, we're going to find it in some other place. Actually, we're building products which are not blockchain-based. We're building products which are traditional. But there are things that just by solving how fast you move the money, all the fees that you are reducing, you can bring a traditional financial product. At the lowest level, you have the blockchain making the movement. But at the end of the day, if you want to buy a stock in the U.S., you have to buy the stock. That's fine. It doesn't need to be a blockchain. Sure, sure. You are serving that. It's true that we leverage on the technology to make movements. But the end product, the end thing. The end thing that we're going to be using for further products, we won't be looking for blockchain innovation and put them out there. If we see that blockchain has something like what we are seeing now with moving USDC everywhere in the world, we're going to be using it.

Jeremy:

Right. I mean, I think our short-term vision is that more and more new kinds of digital banks and neobanks and digital wallets can connect and exchange value with each other using USDC as a common settlement. And so we're seeing lots of different digital wallets supported around the world. And that creates a kind of interoperability and movement, which is really important. I'm interested to hear a little bit about the growth story. You're still young as a company, but you're growing fast. So maybe you could talk a little bit about your growth. You don't have to share information that's confidential, of course, but I know you're growing fast. And that's really exciting to hear.

Alvaro:

Yeah, like it's a year and a couple of months since we launched the first country in Mexico. So that was August last year in 2022. Then we launched Argentina in February this year in 2023. And then we have recently launched in Colombia in July. So we're moving super fast. And that's a learning that we got from Revolut, that you need to expand your time in the early days, which is when you are more flexible, when you can do more things in a fast way. So we're aiming for that. We keep opening new markets and we will continue. And the three markets where we are operating, the reality is that we have found different use cases in each of them, but all of them has kind of worked pretty well. And the reason why we are growing and why people are using that is because we bring up a better product. It's a better product, which is cheaper. So people that are using that and people tell their friends, you need to use that. If you don't use that, you're not making the clever decision is using DolarApp . It's not using other products. So that's the way. That's the way we're framing a growth. We also have an acquisition channel beyond organic. People sharing and telling about DolarApp is a big thing. And the reason is because we have a much better product.

Jeremy:

That's awesome and exciting. And I know you've raised from venture capital, and I know some of the people who've invested as well, and their thesis about stable coins and dollarization and next generation of banking and stuff has been playing out. What's next that you can talk about on the product front?

Alvaro:

Hard to say, but you can say. We want to be in more places, and we want to be solving more problems that people have in this country, where I mentioned. I think everything related to payments, investing, and saving, you can imagine all these different products that we're going to be building. We come from Revolut, three founders. So the school where we have grown, we need to win by having the best product with the best offering. So we're not stopping in building. We're going to continue, and we'll have a full financial app that will go from the most common transactions to the ones that some people use, but are not the classic ones. We're going to have a full spectrum of financial offerings on our platform. We go one by one. We find this the most relevant. But I think summarizing is, we have big ambitions. We want to aim for everything. You have seen in Europe Revolut, so you can imagine a similar, but with a lot of learnings.

Jeremy:

And a new architecture. One of the things that we care a lot about is the way in which this technology can provide greater participation in the global economy through access to better currencies, better financial rails, and expand the franchise of people participating in the financial system, but in the digital economy as well. I would be interested to hear about, from a mission perspective, other than growing a lot of users, as a business, how do you see what you're doing as impacting people's lives and livelihood?

Alvaro:

We believe that people, just for the fact of being born in one place or the other, should have the same opportunities as those who are born in one place or other with much better offerings. So we're working for that. We work for those people that just for the fact of being born in a region, in a specific country, have problems like having a normal financial life. We're building for that. This is what we build and this is what we believe that we are doing to the world and society. We're not building in countries where there are no fees. Or you can exchange freely. We're building in a region where banks are returning. Like, ROI is the highest. Banks are excluding their customers. We're building for that.

Jeremy:

It's a great mission and it's been fun to see your early success. And we're really appreciative of the work that you do with us as well. But it's been a great pleasure having you on, Avaro, and many years of success ahead.

Alvaro:

Thank you, Jeremy. It's a pleasure.