The $100 Billion Bet on Stablecoin Banking: Raagulan Pathy’s Vision for KAST

In this episode of When Shift Happens, I sit down with Raagulan Pathy, founder and CEO of KAST, to discuss the crypto opportunity he left Circle to pursue, why building a stablecoin neobank is far harder than launching a card, and why KAST replaced its planned token with tokenized equity. We also confront a question every fintech customer should ask: what happens to your money if the company holding it collapses?

The Opportunity Beyond Crypto Speculation

Raags’s thesis begins with an uncomfortable view of the industry. Crypto has built powerful technology, but the infrastructure has not really delivered enough practical value to ordinary people. He became convinced that the largest opportunity was not another token or stablecoin, but a financial platform built on stablecoin rails. Stablecoins can function like digital versions of familiar currencies while moving across the internet more easily than money trapped inside traditional banking systems.

That is particularly helpful to remote workers, migrants, entrepreneurs, and people in countries where receiving dollars or making international payments remains difficult. KAST aims to connect crypto rails with everyday finance, allowing customers to hold, spend, save, and transfer money. Raags describes this as potentially “the greatest TAM opportunity of our lifetime.”

This also explains why KAST kept growing while crypto markets declined. Raags says more than half of its customers are not native crypto users, but regular people who use stablecoins because they solve a real financial problem.

Why KAST Is Not a Card Company

A growing number of wallets and exchanges now offer payment cards, but Raags argues that a card is only the visible surface of a complicated business. Behind a simple payment are banks, custodians, compliance systems, licences, technical providers, and country-specific rules. Sometimes KAST works with a provider that works with another provider that finally connects to a bank. The customer should not have to understand that chain, but KAST must still take responsibility when something fails.

Cards helped KAST find early product-market fit, but Raags sees the larger opportunity as building a financial ecosystem around international payments, savings, business accounts, credit, money movement, and wealth. Raags believes KAST’s advantage will come from infrastructure that is expensive and painful to replicate. Once that infrastructure is built, competitors will need years to catch up. His internal philosophy captures the urgency behind this strategy in three words: “Shut up and ship.”

The Discipline Behind Rapid Growth

“If you don’t like chaos, don’t come to a startup”.

Instead of relying only on quarterly planning meetings, Raags regularly pulls teams into temporary “war rooms” to settle important decisions quickly. His first startup taught him a difficult lesson about personnel. A person may be intelligent, hardworking, and well-intentioned, but still be wrong for the stage a company has reached. In a fast-moving industry, months spent avoiding a difficult decision can become the period in which a competitor pulls ahead.

KAST has attracted more than one million users and is on track for $100 million in annualised revenue. It has also raised $80 million to fund acquisitions, licensing, infrastructure, and new products. Yet Raags remains highly cautious about spending. When he discovered that the company used around 80 software tools, he instructed the team to eliminate 20. Each expense appeared minor in isolation, but together they represented significant waste. More capital, in his view, should expand a company’s ambition without weakening the discipline that allowed it to survive in the first place.

Who Owns the Money Inside KAST?

The conversation becomes especially important when it turns to custody. 

With a custodial platform, customers transfer assets to the company and receive a claim against it. This usually creates a smoother experience, but it also means trusting the company, its custodians, and its legal protections. Raags says KAST keeps much of its customer money with licensed custodians and has been clarifying its bankruptcy-remote structures. 

Self-custody offers greater control, but it may also require users to manage networks, gas fees, bridging, wallets, and security themselves. A custodial experience is easier, but places more responsibility and trust in the platform. Parts of KAST Earn already use non-custodial wallets, while the company has been working to expand non-custodial and self-custodial options. Raags believes customers should be able to choose between convenience and control, but more importantly, users should understand a platform’s custody model before treating it like a traditional bank account.

Why KAST Scrapped Its Token

KAST’s most controversial decision was abandoning its planned token. Early customers earned points through spending and expected those rewards to become liquid tokens. KAST instead decided to pursue tokenized equity linked to the value of the company.

Raags accepts that some users feel disappointed. However, he argues that many crypto tokens lose most of their value and have little connection to the business that created them. Plus, founders and investors often retain valuable equity while communities receive a separate asset with weaker economics. Tokenized equity is intended to create stronger alignment. If KAST becomes more valuable, the community’s reward should reflect that growth rather than depend on the market for a standalone token.

The drawback is that private equity is less liquid, and the final legal and operational structure is still being developed. KAST is also considering periodic buybacks and other ways for customers to realise some value from their holdings. It is a harder decision to sell in the short term, but Raags believes it creates stronger long-term alignment among founders, investors, employees, and users.

The Personal Cost of Conviction

Raags’s confidence is shaped by failure as much as success. Before starting KAST, a start-up he founded had already fallen through, and he had to return to corporate roles. This time, he says he invested more than $5 million of his own money to buy out early shareholders and has not sold any shares.

He describes running KAST as a responsibility that follows him from the moment he wakes until he goes to sleep. Raags believes KAST can eventually become a $100 billion company and that stablecoin neobanks will grow into financial institutions comparable with major fintechs and crypto exchanges. He is equally clear that people should remain sceptical and judge that ambition by what the company actually delivers.

Crypto’s next era will likely be driven by products that go beyond crypto natives and make money work better for regular people. KAST is Raags’s plan to build that future.

👉If you enjoyed reading the summary, head over to When Shift Happens on YouTube or your favorite podcast platform to access the full convo. 

https://youtu.be/5UBRqq1hOWA?si=nolhJUwGys6Wm679