In this episode of the Fintech Blueprint, host Lex is joined by Cactus Razi, CEO Americas at B2C2 — one of the original and largest institutional market makers in digital assets and crypto, owned by Japanese public company SBI.

Cactus traces his career from a cold-call connection that landed him a role at Goldman Sachs in 1998, through fixed income sales, credit derivatives, and structured products, to building an algorithmic bond market-making firm and ultimately leading B2C2's Americas operations.

The conversation covers how institutional market making works in both traditional and crypto markets, the mechanics of liquidity provision across 40+ exchanges, the role of market makers in newly issued token launches, and the structural differences between custodians, exchanges, and broker-dealers.

A significant portion of the discussion focuses on stablecoins — their function as transfer-of-value instruments, the coming proliferation of issuer-specific stablecoins from firms like Stripe, Revolut, and Western Union, and B2C2's Penny product designed to enable instant, fee-free stablecoin swaps.

From Goldman Cold Call to Wall Street Career

Cactus landed at Goldman Sachs in 1998 through a serendipitous cold call: a friend phoning the magazine he worked at for advertising information revealed he was at Goldman, prompting Cactus to pursue a relationship that eventually led to his Wall Street entry.

After roughly 30 rejections from other firms, he joined Goldman in money market origination — overseeing commercial paper issuance — describing it as 'not exactly the sexiest place to start, but my foot in the door.'

His career accelerated by gravitating toward complexity: credit derivatives in the early 2000s, structured credit, and mortgage derivatives, all sold primarily to hedge fund clients who were open to a wide range of products and strategies.

In a Goldman interview, legend Phil Daravoff asked what he'd do if he didn't get the job; Cactus answered he'd sell the most complex product he could think of — jet engines — a philosophy that became his career through line.

Selling to Hedge Funds: Asymmetry and Capital Efficiency

Hedge funds seek the most capital-efficient and risk-efficient way to express a directional view — buying call options rather than stock, for example, to capture asymmetric upside with less capital deployed.

'This idea of picking up asymmetrical exposure in a capital-efficient manner is really at the heart of a lot, not all, but a lot of hedge fund activity in general.' — Cactus

Unlike traditional asset managers who are range-bound by mandate, hedge fund clients were open to derivative products, structured credit, and eventually frontier market instruments, giving Cactus broad cross-asset exposure.

Navigating Market Crises: LTCM to Archegos

Cactus started at Goldman just months before the Long-Term Capital Management implosion in 1998 — a firm staffed with the world's brightest people that 'managed to blow up in spectacular fashion,' requiring Fed-convened bank CEO intervention.

He draws a line from LTCM through the 2008 financial crisis to the Archegos prime brokerage debacle, which effectively took down Credit Suisse: 'Wall Street tends to have a hard time learning its lessons.'

His approach to market cycles is adaptive rather than static: the best investors adjust exposures based on opportunity conditions, letting cash positions fluctuate and sitting on the sidelines when opportunity is absent.

'I have never considered a market opportunity that even comes close to what we're currently living through' — citing the scale of frontier technology opportunity, the speed of change, and the high-dimensionality of second and third-order effects. — Cactus

Building an Algorithmic Bond Market Maker — and Why It Failed

Around 2015–2018, Cactus and a team built an algorithmic market maker for small 'odd lot' fixed income trades — positions too small for human traders to bother pricing but large enough to matter for asset managers rebalancing portfolios.

The technology stack of 2015–2018 was insufficient for the ambition, but the bigger oversight was capital structure: market-making firms are capital-intensive, and the risk equity they need is fundamentally incompatible with venture or growth equity investor expectations.

'There is very little capital for risk equity — this notion that if your machines do something wrong, you're going to lose all your money. That's not consistent with what a venture investor would be looking for.' — Cactus

Market Structure 101: Custodians, Exchanges, and Market Makers

Custodians provide safekeeping for assets when not trading — Bank of New York is the world's largest custodial bank with roughly $36 trillion of assets under custody.

Exchanges exist for price determination: buyers and sellers form a stack of bids and offers, and the intersection creates trades. Over-the-counter markets like fixed income use broker-dealers and market makers instead of centralized exchanges.

The used car dealership analogy: 'You can show up and buy anything on their lot, and you can show up with your car and they will show you a price. If you don't like the pricing, go to a different used car dealership. That's more or less the market structure of fixed income.' — Cactus

Electronic fixed income execution venues include Tradeweb and Market Access for bilateral electronic trades, alongside direct OTC transactions with large banks, smaller institutions, and pure agency broker-dealers.

How B2C2 Operates as an Institutional Crypto Market Maker

B2C2 is a global market maker and liquidity provider posting prices on over 40 exchanges worldwide, including Binance, Coinbase, and Kraken, as well as running a large OTC business serving approximately 1,500 institutional clients.

B2C2 is 100% institutional — it does not serve individuals directly, but rather platforms that then serve individuals.

Market makers span a spectrum from riskless principal (aggregating exchange prices with minimal balance sheet risk) to heavily proprietary (using alpha signal frameworks to predict price direction over seconds to minutes and quote accordingly).

B2C2 sits in the middle: it has a built-out alpha framework but maintains a constrained risk appetite, influenced by its parent company SBI, a Japanese public company.

Proprietary-heavy market makers may quote poor prices when their signals predict an asset will rise, creating inconsistent client experience.

B2C2's moderate approach aims for more consistent pricing regardless of short-term directional signals.

The core risk management challenge is adverse selection: 'Every time we buy something, its price goes down. Every time we sell something, its price goes up. Trying to avoid those types of outcomes is the art of being a market maker.' — Cactus

Market Makers and Token Launches: Liquidity as a Virtuous Circle

For newly issued or low-visibility tokens, market makers prime the liquidity pump: the perception of sufficient liquidity attracts investors, which generates real transactional activity, which in turn creates genuine liquidity — a virtuous circle.

The analogy to securities markets is the IPO underwriter's stabilization role: 'Their job is to provide some level of support and stability for the newly issued stock for a moderate period of time.' — Cactus

Crypto's market-making landscape includes both legitimate enterprises seeking financing and highly speculative assets with questionable fundamental value — a dynamic Cactus compares to the wave of poorly performing SPACs in traditional markets.

Stablecoins: Transfer of Value, Programmability, and B2C2's Penny Product

B2C2 transacts approximately $1 billion per day in stablecoins, driven by their role as the native funding instrument in digital asset markets and the historical difficulty crypto firms have faced accessing traditional banking.

Stablecoins' primary advantage is transfer of value: faster and cheaper than ACH or SWIFT, operating 24/7. Some jurisdictions like Brazil's PIX system have leapfrogged even stablecoin capabilities with instant, free domestic payments.

The second wave of stablecoin value is programmability: 'A piece of software has the ability to run additional software on it — not that different from a SaaS platform opening up an app store.' — Cactus

B2C2 made two bets ~18 months ago: first, that many more institutions would issue their own stablecoins (beyond the Circle vs. Tether duopoly debate); second, that programmability would become increasingly critical over 3–5 years.

Stripe's announcement of a merchant stablecoin network — and its acquisition of Bridge — exemplifies the trend, alongside public announcements from Western Union and Revolut of their own stablecoin plans.

B2C2's Penny product enables instant, zero-fee, zero-counterparty-risk swaps between stablecoins — designed for a future where dozens of issuer-specific stablecoins coexist and interoperability becomes critical infrastructure.

Resources Mentioned

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or money market funds and so forth

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