Launch HN: Karsa (YC W25) – Buy and save stablecoins internationally
Over a billion people live in countries with severe inflation and are unable to protect their wealth due to strict capital controls. The banking systems in most of these countries are designed to prevent access to assets like dollars—good luck getting a foreign currency account.
Working in the crypto industry, we spent a lot of time thinking about how it can solve problems for people in the real world. Eventually, we saw a real, grassroots use-case emerge—one outside of the US entirely: people in developing countries started to use crypto exchanges like Binance to hold dollar-denominated stablecoins, which preserved their wealth from inflation. However, these exchanges primarily cater to traders and are still too complex (and crypto-focused) for average users, hindering mass-market adoption.
We knew this was a problem we wanted to work on after speaking to our family and friends: when Shahryar tried explaining crypto to his uncle in Pakistan, it was all jargon until he explained stablecoins, which immediately clicked. For someone who is (1) earning in a currency thatʼs inflating 20-30% year-over-year, (2) whoʼs structurally limited from dollar access, and (3) makes payments abroad regularly, this makes a massive difference.
Karsa looks and feels like a bank/currency exchange to an average user—they choose an amount and buy dollar-denominated stablecoins at a market price. But under the hood, we route our supply from a network of verified peer-to-peer stablecoin traders, whom buyers are making their deposit payments to.
(1) A seller sets their price and deposits money in an escrow smart contract (programmable rules-based code, can only return or release funds between seller and buyer).
(2) A buyer gets matched with that order upon setting their criteria, and has to send a fiat payment (e.g., bank transfer, payment app, etc.) to the sellerʼs local account + upload a photo for verification.
(3) We verify the fiat payment with the seller directly, handle any disputes, etc., and then release the escrowed stablecoins to a digital wallet weʼve created for the buyer.
How is this different? Structuring it as peer-to-peer allows us to actually be global from day one and circumvent government interference—in most of these markets, centralized products (i.e., requiring a bank account in the relevant country) often get shut down. This means that in many of the regions we operate in, weʼre the only way anyone can reasonably get access to stablecoins.
However, weʼve abstracted away the ‘P2P partʼ. In other exchanges, buyers and sellers engage in chats for each transaction (to confirm details, etc.). This is onerous for sellers and off-putting for new buyers. Instead, we sit in the middle, matching price orders and managing verification, appeals, etc. with sellers directly—much less work for sellers, and a simple process for buyers.
Weʼve also abstracted away as much about crypto as possible—no crypto knowledge, wallet / key management, etc. is needed. User funds are held in self-custody crypto wallets, meaning your money is always yours—unlike a centralized exchange (e.g., FTX) thereʼs no way for us to access, freeze, or lose your funds.
We currently take a 1% transaction fee, though we eventually intend to adjust it proportionally to regional FX rates. Over time, we want to support more of the average personʼs financial stack, and are exploring highly-requested features including freelancer payouts, spending via a card, US treasury yield, etc.
You can check us out at https://gok...
247 comments
[ 2.8 ms ] story [ 257 ms ] threadCongrats on the launch. I wanted to note that I'm using mobile safari on an iPhone Pro 15 and the header text collides with the tagline to the point that it's illegible.
https://www.nsave.com/
(no affiliation, no crypto)
My question is that how will you deal with future government regulations. In developing world, the government does not like crypto and may impose laws like upfront taxation to discourage people from investing.
While we want to have constructive conversations with some of these governments (I actually believe it's possible), ultimately we can't stop hostility / regulations against crypto. What we can do is offer our service and be transparent about what it is — and then users in those countries can make decisions for themselves about whether they can/should engage.
I'm hopeful, however, seeing countries like Turkey and a couple in LatAm that have significant crypto adoption without overt government hostility — when adoption reaches a critical mass, I expect to see more governments relax restrictions.
- Users in these countries already use exchanges like Binance almost like a dollar checking account — this, as you probably know, is far more risky (past AML violations, entirely centralized point of failure, etc.). There's no better or safer alternative at the moment, and these people aren't typically huge fans of the current banks they're using, nor the regulation that they have to deal with.
- We don't have any intention to hide how the product works, or claim that it's a real bank.'Abstraction' in this case means minimizing wallet, key, and asset management during the user flow.
- The stablecoins we're offering (USDC & USDT) are more widely used and known in these countries than in the US. I actually don't even have to explain it to half the folks because they already understand the value prop and are comfortable with them (FWIW, USDC is a fully audited and soon-to-be-public US company).
But yeah USDC is as good as it gets.
It is very much illegal though, I'll give you that one.
I would seriously reconsider this part of your value add.
https://en.wikipedia.org/wiki/Scrip
Precious metals like gold are also a terrible investment, but do offer liquidity when currencies fail. For a single person, no more than 1.7% of your portfolio should contain such leaky holdings.
In terms of investment, wait till the market crashes and buy freehold residential real-estate in larger growth cities with cash. This is the safest investment for amateurs. =3
Both gold and silver have appreciated more in value than the S&P 500 since the start of this millennium.
Keep in mind I heavily invested in ubiquiti at $12/share after their early legal trouble, so am probably not the type of investor you'd want to study. lol =)
I would lol... but some people lost everything, and that's never funny =3
Personally not bullish on bullion, but good luck =3
i.e. people can jack your phone/sms line for around $23, or access any email server on US soil for free.
https://www.youtube.com/watch?v=wVyu7NB7W6Y
This is why 2FA is actually more dangerous in some situations.
i.e. people may feel safe in the complexity, but are open to the same shenanigans of any unregulated exchange.
Children in Japan figured out magazine faces worked on cigarette machines too.
Have a nice day =)
The alternative is just trusting someone in the space. With that you have stuff like FTX, MtGox, and even ones that haven’t failed where there are plenty of stories of KYC trouble on Reddit.
> people who may not have access to reliable devices
A very good point but that’s where education comes in. I’m glad Karsa seems to be teaching people to fish rather than just giving people fish.
And yet, billions of people do this everyday with (non-crypto) wallets holding banknotes in their pants pockets. And for the most part, it's fine. A crypto wallet on your phone in your other pants pockets is similar. It's actually superior because at least you can make a backup to protect from loss/destruction.
Self-custody wallets are fine.
It is quite neat... But since you don't handle the cash, how will you deal with fraud? Or even normal bad luck? Bank transfers do get lost and require chasing banks, and you will be out of the loop here.
Also, I guess bank transfers between poorly banked countries are probably a constraint? If I live in a country with hyperinflation, am I definitely able to send fiat to a seller?
AML would seem basically impossible, but I guess that's no different to Binance...
The best risk mitigation here is having trusted, verified sellers that we've met + a robust support functionality that allows users to indicate any issues. To be honest though, in some of these countries, the domestic payment systems (e.g., UPI in India) are quite reliable.
Re AML -- we do KYC, and we discourage / don't present cash as an option. That way the payments happen through more transparent channels.
And what then, is stopping governments from simply demanding you hand over a list of your customers? They will seek to enforce those currency controls you are subverting.
Your entire sales pitch here is based on a lack of transparency to "evil oppressive governments", whereas the US government (at least, once it gets it's shit together again in a few years), will just delete your company for helping the North Koreans evade sanctions if you don't have quite robust AML.
User A sends local currency to User B's fiat account.
User B sends stablecoins (earned via salary, trading, mining, etc.) to User A's digital wallet (that we've created for them).
Definitely a few places that we'd probably avoid. But also plenty of others (e.g., Kenya, LatAm, Turkey, etc.) that have been quite friendly and would be fine to visit.
Do you check the laws for this in each country you are available in?
Do you notify user B of this fact and the potential legal risks?
Do you verify if they have the license?
It's MUCH more complicated than that in several countries, particularly the US.
Because if you are involved in washing illegally earned money in many places that's a criminal act.
What, other than money laundering, would motivate a person who had a supply of such stablecoins to want to supply them to into a market with currency controls? Is the concept there “I make my expat wages in dollars, I want to turn them back into $CURRENCY at the black market rate”?
(Plus a whole bunch of pretty words to make it sound like they're saving the world.)
It's so funny to read Americans who constantly downplay the problems that people in developing countries have
What I probably should have said was that the platform should be offering a USD (or Euro, or whatever) denominated account, much easier for trading.
And then trigger an Interpol Red Notice for the founders.
1. a means of bypassing US sanctions
2. a means of bypassing the US dollar / Western order during international trade
3. a means of transacting without Visa, Mastercard, Chase; cutting out banks and fintechs and their margins.
Stablecoins are pitched to investors as #3, but are more frequently used as #1 and #2.
If stablecoins catch on and can build a large network, it poses a real threat to American hegemony. You wouldn't need the dollar for international trade or settlement. You could trade, move large balances, etc. in stablecoins and never need to hold dollar reserves.
It's wild to see the US funding and developing this tech.
These stablecoin issuers are enormous buyers of US treasuries: "Tether Holdings owned $97.6 billion worth of US Treasuries in June 2024, a new high. Hence, Tether now owns more US Treasuries than the governments of Germany, the United Arab Emirates (UAE), and Australia. Hence, Tether is now the 18th largest holder of US Treasury bonds" (https://medium.com/coinmonks/tether-usdt-is-the-third-larges...)
Dollars are also more dominant as a reserve currency in stablecoins (~97%) than they are in real-world trade (https://digitalchamber.org/stablecoinreport/).
I.e., we see stablecoins as extending dollar dominance, not reducing it.
They have a shady past but quickly realized they had lucked into a WILDLY profitable business. That first 10% of their existence is debated constantly and is what you see referenced constantly online when Tether is labelled as shady.
They make a disgusting amount of money and it keeps snowballing. This annoys people who want them to implode for earlier crimes.
For context they are more profitable than Blackrock.
or similar. They have $100bn dollars and their only job is not to lose any of it.
If you think 1% is a reasonable number, that’s 1BN per year at current market cap. Tethers been around for 10 years. Dead funds also compound.
Let’s say Tether was grossly insolvent (ie only had 50% of reserves) for the first 10BN in market cap (in other words, for the first 5 years of their existence). In addition to the 6BN+ of interest income they earn every year, there’s 1BN of reserves that will never get redeemed added every year
If Tether was insolvent before, they just need time to change that
This is very roughly similar to banking. It’s an unregulated bank, but it’s not inevitable that they’ll implode.
And this company is US-based
And you use it to avoid US-sanctions
I'm really not sure that it works like that
The biggest usage of stablecoins would be as a hedge on crypto itself. Don’t like where the current market, park it without needing to off-ramp and then on-ramp again when the conditions change.
And now that you’re in crypto-land 24/7, no need to skip weekend movements because offices are closed or accounts don’t get updated until Monday morning.
Plus what the post says about restrictions on foreign currencies for a lot of people in developing nations.
I have a Capital One credit card that was advertised as "no foreign exchange fees", and its exchange fee is 1%. I wish it would stop lying about the absence of fees, but I can live with the 1% fee.
And I don't think I would characterize this as a high-risk currency; it's essentially a digital receipt for a dollar, backed by US treasuries (https://www.circle.com/transparency).
if you trust your banking system to be a better custodian of your money than Circle, you're one of the lucky ones. billions of people in the world don't have that kind of luxury (see: https://www.bbc.com/news/world-asia-68778636), hence a part of the reason why stablecoins have grown to a little under a quarter trillion
If I have a wad of tea shillings, how do I use this app to hold stablecoins ?
(even if you can set up dollar-denominated accounts at a domestic bank, that doesn't mean your claim will be honored. stablecoins aren't dollars but they might be more stable than your average dollar-denominated bank account in some countries)
Even I as an American has known so many people from countries like Argentina where just maintaining your bank balance is basically impossible due to inflation and currency controls.
Believing that this is easy or solved is a very Americentric viewpoint.
Unfortunately with money there will always be good and bad guys with it. We all need it. Have to do the best we can with not assuming everyone is a criminal re money laundering.
So obviously yes.
Currently, we have restrictions, as there’s a limit of 50 USD on USD transactions per week for each bank. There is a constant growing interest in USDT and crypto here, especially since the middle class is quite aware of it due to the limited availability of USD in the country! It would be nice to explore this further, but it's a bit disappointing that it's not an option right now :/
Kudos for getting this out, serves a real need for a huge amount of people.
We use privy, one of the best-in-class wallet providers that basically creates a self-custody wallet, but uses email/phone/social auth (and encrypts/shards the actual keys). So you wouldn't be at risk of losing them like you would with a vanilla wallet (you can of course export the keys if you're more crypto-savvy)
We're doing a pretty slow and steady rollout to catch where users are running into issues, but it's a pretty controlled environment re: messing up. You could accidentally send money to the wrong address if you wanted to transfer to another wallet, but that's not a core functionality (located on a side page) and certainly not one that the average person is using. Outside of that, there isn't really anything else you could severely mess up.
In this case, YC is probably getting scammed and possibly the founders of this startup. But I’m sure if you dig deeper there is plenty of other shady crap too.
I can totally understand being interested in crypto in 2010. It was a genuinely novel use of technology, which seemingly had a lot of potential. But it's 2025 now, and the primary use has turned out to be crime. I mined some Bitcoin back then, and even sold it on Mt. Gox. But these days? Wouldn't touch it with a ten foot pole.
Think of it this way - 500 years from now, will societies still be using paper/polymer notes along with silver/tin/brass alloys for coins, or will they be 100% by then? If digital, would you want sovereign control over your assets via open source solutions, or would you be happy that the government with its closed source systems, made by backchannel private no-contest contracts, controls your ability to pay and get paid?
Because I fail to see how countries e.g. Venezuela are going to allow some US startup to undermine their currency and distort their financial system.
It's amazing to me that people think they can disrupt a government without them retaliating.
How is it undermining a currency and distorting a financial system to allow people to exchange their OWN hard-earned money for another currency?
None of which is to say that capital controls are a good thing, but you can understand how a government might want them, and might view circumventions as 'distortions'
https://catalogue.nla.gov.au/catalog/3070732 - The Malaysian currency crisis : how and why it happened / Mahathir Mohamad
edit: Sorry that first link is for a book
This might be better https://www.investopedia.com/articles/economics/08/currency-...
second edit - I'll add the relevant paragraph
> Anatomy of a Currency Crisis
> Investors often attempt to withdraw their money en masse if there is an overall erosion in confidence in an economy's stability. This is referred to as capital flight. Once investors sell their domestic currency-denominated investments, they convert those investments into foreign currency.
> This causes the exchange rate to get even worse, resulting in a run on the currency, which can then make it nearly impossible for the country to finance its capital spending.
In practice, it's because the government of that country says that it is.
In venezuela right now, there's a YC startup (2023), "Kontigo" [1], who's part of it, they went all in with this "stablecoin" bullsh*t and manage to get a license to operate in US (stripe) and with Venezuelans users with absolutely NO KYC, fully connected and "licensed" by the venezuelan "National Superintendence of Cryptoassets and Related Activities" a.k.a SUNACRIP
Take note that this SUNACRIP had closed operations since 2020 when a huge corruption scandal hit the govt, they used crypto to run corruption operations and money laundering [2][3][4] and somehow SUNACRIP, an organization that is not even working or functioning, this january licensed "Kontigo" to operated in the country, the founders themselves made a bragging video on instagram about "noone expecting it", wich is hillarious, you can find the video at https://www.instagram.com/p/DFd8ouoNKuI/
Anyways, the corrupted govt, approved a YC startup to exchange instantly USDC to VEF using venezuelans banks APIs and USA banking system (plaid, stripe, etc), without any KYC, without any sanctions screening, nothing, the reason for this approval is pretty simple, they doing the money laundering process super easy for them lol, they helping venezuelan corrupts officials bypass sanctions and easy money laundering.
I'm absolutely baffled at the situation and wondering how the fuck this happened, I myself know lower/mid size venezuelan corrupt officials using Kontigo to instantly wash money into USDC, and all of this is backed by YC itself.
And inbefore any user comes here telling me that "venezuela is sanctioned" and whatever other random thing, this company absolutely doesnt help venezuelans, it only helps corruption and launder money from corruption and drugs
[1] https://www.ycombinator.com/companies/kontigo [2] https://es.wikipedia.org/wiki/Caso_PDVSA-Cripto [3] https://news.bitcoin.com/how-crypto-ended-up-at-the-center-o... [4] https://www.criptonoticias.com/judicial/fiscal-venezuela-con...
If the government makes it illegal for the financial system let people store their wealth in dollars, how would they - a part of the financial system - be able to let people store their wealth in dollars?
Team America, world police, crypto version.
Or is the business plan to make it easier to do crimes?
That sort of nonchalant attitude will serve you well in the future I am sure.
I suppose it fits the zeitgeist.
--- There are banking laws all over the world that need to be considered and followed, the US in particular has a set of banking laws that differ in each state unless you are an actual bank that follows federal regulations.
Ignoring or being purposefully ignorant of the laws is a bad path.
Now, when it comes to facilitating money transfers, or facilitating forex. Yeah, this they’d need to look into. But the idea seems to be that they’re a P2P marketplace bringing individual sellers and buyers together, but not really touching any of that money themselves.
Sort of like, is Uber a taxi firm? Different jurisdictions see this differently.
If you are facilitating the movement of money you are still governed by financial regulations.
Regulators aren't stupid. Trying to be clever will not get you anywhere.
In a very simplified example, accountants have to follow the same tax laws for their clients. Some firms cost _significantly_ more than others because they have an army of lawyers who find legal loopholes that can reduce the tax bill.
Karsa will likely use their YC cash to fund these lawyers in different countries when issues arise. They might decide to stop fighting and close business in that country.
I know Stellar used to/is quite active in this space, though probably without a lot of the abstractions still. Are you implementing an entirely new smart contract or protocol for the order matching or relying on existing systems in this space?
Frankly, the order matching will be pretty simple at the beginning: Match buyer/seller payment methods, make sure buyer order ≥ seller's available amount, then pick lowest price option. We just have to query the escrow contract on chain to make sure the seller amount is available.