Visa Embraces Crypto: Supporting Stablecoins Across Four Blockchains

In a groundbreaking announcement, Visa, the global payments giant, revealed its support expansion for four stablecoins across four distinct blockchains. This strategic move is not merely a technical enhancement but a signal of traditional finance’s deeper integration with blockchain infrastructure, marking a pivotal moment in financial innovation.

Visa’s Strategic Expansion

During the fourth-quarter financial results meeting, Visa CEO Ryan McInerney disclosed the addition of four stablecoins and two fiat currencies to the company’s network, enabling conversions into over 25 fiat currencies. This incorporation signifies the stablecoins’ gradual embedding into the global clearing system, beyond their traditional use as alternative payment methods.

Visa has witnessed a significant surge in demand for cryptocurrency payments. In the last quarter alone, the amounts spent via Visa cards on stablecoins have quadrupled compared to the previous year. Since 2020, Visa has processed more than $140 billion in crypto and stablecoin transactions, underscoring a rising trend in cryptocurrency usage.

Moreover, Visa’s network currently spans over 130 stablecoin-linked card issuance programs across 40 countries, emphasizing the widespread adoption of this digital innovation. Notably, Visa is empowering banks to mint and burn stablecoins, facilitating direct settlement within its network.

The Real Power of Stablecoins

Toly, the founder of Solana, offers an insightful perspective on this trend, suggesting that stablecoins could revolutionize the payment industry’s profit structure by drastically reducing operational costs for banks and financial services. Traditional entities like Western Union, reliant on expensive banking operations for global transactions, face disruption as stablecoins offer nearly cost-free cross-border transfers.

This highlights a fundamental issue: while Visa’s profit per transaction is only around 0.1%, consumers and merchants face exorbitant fees due to high banking and settlement costs.

The User Interface Dilemma

Despite their efficiency, stablecoins have not yet replaced companies like Visa or Stripe outright. Toly emphasizes that the user experience and interface are crucial for widespread adoption. Established payment processors retain an edge due to their brand trust, customer support, and well-designed user interactions.

However, as banking costs decrease, entities with robust customer relationships and trust are likely to lead the transition to stablecoin settlements, allowing them to serve more customers more affordably. Consequently, consumers will benefit from lower fees and faster cross-border transactions.

The Future Landscape

Following the United States’ clarification of regulatory frameworks for dollar-backed stablecoins, payment leaders such as Visa, PayPal, and Western Union have rapidly adopted stablecoins as core components of their infrastructure. Visa’s cross-chain settlement capability signifies an evolution towards the tokenization of fiat currencies on a global scale.

As stablecoins transition from being a part of cryptocurrency into a pivotal component of the financial system’s settlement units, they are poised to reshape traditional banking and payment industries, heralding a new era of financial sovereignty and opportunity.