Visa bends down to get involved in stablecoins: it doesn’t want to eliminate stablecoins, but to “collect rent” from them

Author: Blue Fox Notes

Visa personally moves in to build stablecoin infrastructure: it launched a stablecoin platform. The goal is to make it easier for banks, financial institutions, and fintech companies to issue and manage stablecoins, with seamless integration into Visa’s existing payments ecosystem.

Specifically, the features of Visa’s stablecoin platform include:

• stablecoin minting, movement, and management;

• helping banks and financial companies integrate stablecoins into existing payment, settlement, and funds transfer systems.

The coverage targets more than 200 million merchants and 15k financial institutions.

Visa is a traditional payments giant. This time, it personally enters the stablecoin infrastructure build-out. Its strategy is to embrace and upgrade stablecoins, not to eliminate them. The larger the stablecoin volume, the more transactions Visa’s network processes (and they’ve already earned real revenue from it).

This is very beneficial for the next stage of stablecoin adoption: it will expand the overall stablecoin market (more use cases). However, market concentration among top issuers may decline, and competition will shift toward distribution capabilities, merchant onboarding, and compliance.

So what impact will this have on Tether/Circle?

For USDC (Circle), the short term is positive: Visa’s platform directly supports USDC settlement and integration, and USDC has a first-mover advantage. Of course, there is fierce competition in the long run, and alliance coins like OUSD plus bank-issued stablecoins may divert some institutional/payment business. Circle’s advantage is compliance and existing integrations; however, the model of “a single issuer earning reserve interest” may face challenges (the alliance model may share收益 with distribution parties).

For USDT (Tether), the impact is relatively greater. USDT is driven by trading volume and emerging markets. Meanwhile, traditional finance like Visa tends to prefer compliant and transparent options (such as USDC/OUSD). USDT remains strong in pure crypto scenarios, but its share in merchant payments and institutional settlement could be eroded.

In summary:

Visa isn’t here to “kill” USDC/USDT. It’s mainly here to “collect rent” and expand the pie. For those holding stablecoin ecosystems long term, this is positive. But for a model that relies purely on issuing to earn interest, there will be challenges ahead.

What impact will this have on Ethereum?

The conclusion is: neutral to slightly positive for ETH. The positive side comes indirectly from faster stablecoin adoption.

Visa is closely partnered with the Ethereum ecosystem. Visa’s stablecoin platform will bring more traditional capital into the ETH network in the form of stablecoins.

In the long run, stablecoins going mainstream will attract more institutions/merchants to put funds on-chain, and demand for ETH as a settlement layer/L1 will increase (especially after L2 expansion, with gas fees and MEV revenue). Visa’s previous data also showed that stablecoin transaction volume is boosting on-chain activity.

Of course, Visa’s stablecoin will definitely support multiple chains, not only Ethereum. But as the most mature and most decentralized chain, Ethereum will be the top choice for institutions when it comes to compliant stablecoins.