Photo: Co-Founders and fellow UC Berkeley alumni: Aaron Bai (CEO) & Sahil Phadnis (CTO)
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For the longest time, banks have been in charge of helping people save, spend, and transfer money without competition, allowing them to set their own rules at the cost of consumer trust. While open/digital banking and similar approaches have made banking more transparent and accessible, 65% of bank users have “some” or “very little” confidence in them according to Gallup. Now, a new crypto startup is looking to change this and start what it calls “The Money Revolution”: meet Pebble.
Pebble is a financial product promising its users a new means to save, spend, and transact with their money while receiving better benefits than those offered by traditional banks. Powered by blockchain technology, the platform only uses USDC, a stablecoin with reserves managed by BlackRock (NYSE:BLK), to support all of the incentives it provides. USDC has remained securely pegged due to Circle and Coinbase’s (creators of USDC) strict requirements to maintain a one dollar equivalent in the reserve for every USDC in existence. Additionally, USDC’s historical reliability can be attributed to passing every one of Grant Thronton’s monthly audits of their reserves.
By bringing the best of traditional finance and cryptocurrencies, Pebble aims to create a truly innovative financial product.
Having raised over $6.2 million from some of the biggest VC names, the startup has now announced the launch of its platform. By using the platform, users can expect to earn 5% APY rewards and 5% cash back when interacting with more than 56 partnered merchants. The list includes Uber (NYSE:UBER), Amazon (NASDAQ:AMZN), Chipotle, Airbnb, Adidas (ETR:ADSGN), and many more, with the rewards being deposited directly in the user's account in the form of US dollars.
While interacting with Pebble, users only see and deal with US dollars. This is the part of the company’s plan to bring a new wave of non-crypto natives into the blockchain space. Unlike competitors, Pebble never puts users' funds into DeFi — which remains a relatively new technology and not ripe to build trust with non-crypto users. Instead, behind the scenes, Pebble works with regulated institutions to receive payments on all USDC deposited into accounts by lending them at a 150% collateral. These gains are then used to provide users with APY rewards on all deposits and rewards generated by using the platform.
With crypto becoming increasingly popular despite the bear market, Pebble is also looking into capitalizing on merchant interest. To achieve this, Pebble provides an easier way of accepting payments to merchants instead of taking a cut when accepting card swipes. By taking the middlemen out, merchants are able to generate more profits while reaching more consumers, who also benefit from the rewards.
The result of this approach is a complete jump over legacy banking structure, creating an ecosystem in which cryptocurrencies can have a role in everyday life. This is important for mass adoption as crypto has been mainly seen as an investment tool instead of a financial tool with everyday applications.
Mastercard (NYSE:MA) has also collaborated with Pebble to provide its users with debit cards they can use on a daily basis. When combined with features to control spending and budgeting, as well as with payroll connections, Pebble becomes a tool that can be used to control all financial needs.
When taking all these factors into consideration, it is easy to see why investors like Y Combinator, Lightshed Ventures, Soma Capital, LD Capital, Cadenza Capital, East Ventures, Eniac Ventures, Global Founders Capital, Odell Beckham Jr., and Matthew Bellamy chose to fund the company. While cryptocurrency-based financial platforms have existed for a while, Pebble’s approach seems to differ both in range, security, and quality.
Cryptocurrency showed the world that people are ready to take control of their finances without relying on an outdated financial system. Now, it is up to platforms like Pebble to make this vision a reality by empowering crypto users, non-crypto users, and merchants alike.
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