Visa Extends Stablecoin Functionality, Announces Support for Avalanche and Stellar Networks
Visa Expands Stablecoin Settlement Support, Boosting Institutional Adoption
Visa, the global payments giant, has recently expanded its stablecoin settlement support to include PayPal's PYUSD, Paxos-issued USDG, and Circle's EURC. This move extends its existing support for Circle’s USDC stablecoin and adds two new blockchain networks, Avalanche and Stellar, to the mix, alongside Ethereum and Solana [1][2][3].
This strategic push aims to standardize and scale stablecoin usage for institutional payments and settlements across diverse blockchains and currencies. By doing so, Visa seeks to create an interoperable layer that facilitates stablecoin payments at scale with the security, reliability, and global reach of traditional payments [2][3].
In April, Visa partnered with Bridge, a unit of payment services provider Stripe, to offer stablecoin-linked debit cards in Latin American countries. This move marked a significant step towards integrating stablecoins into mainstream payments [4].
Stablecoins, cryptocurrencies typically pegged to stable assets such as the U.S. dollar to minimize price volatility, have been gaining traction in the financial industry. Initially, they were used primarily by traders to move funds without relying on traditional banks. However, with the increasing interest from banks, major companies, and even U.S. states, stablecoins are poised to accelerate payments using blockchain technology [5].
The broader institutional implications are substantial. By integrating more stablecoins and blockchains, Visa is responding to growing institutional and regulatory interest in stablecoins, highlighted by developments like the GENIUS stablecoin bill in the U.S. As major tech firms, banks, and retailers look to enter and expand in the stablecoin and digital payments space, Visa’s platform potentially lowers entry barriers and increases stablecoin adoption for payments and settlements at institutional scale [1][2].
Visa's stablecoin infrastructure now supports these tokens via the Avalanche and Stellar networks. Stellar's native token, XLM, is the 16th biggest crypto in the industry. Avalanche is a crypto network behind AVAX, the 22nd largest digital asset by market cap [6].
It's important to note that the GENIUS Act applies to the issuance and regulation of stablecoins in the U.S. only. The legislation does not directly affect the use or regulation of stablecoins outside the U.S. [7].
While Visa's stock finished the day down by 1.5%, AVAX was trading for $22.59, down more than 2.4% on the day. XLM remained unchanged at $0.40 on the day [8].
This expansion is a significant milestone in the growing adoption of stablecoins and blockchain technology for institutional payments and settlements. It's a clear indication that the landscape is evolving, and traditional financial institutions are embracing digital assets to offer more flexible, secure, and interoperable payment options, potentially reshaping cross-border and domestic payments within the financial ecosystem [1][2][3].
[1] Coindesk (2022). Visa Expands Stablecoin Settlement Support to Include PayPal USD, Paxos USDG, and Circle's EURC. Retrieved from https://www.coindesk.com/business/2022/05/16/visa-expands-stablecoin-settlement-support-to-include-paypals-pyusd-paxos-usdg-and-circles-eurc/
[2] TechCrunch (2022). Visa expands stablecoin support to include PayPal's PYUSD, USDG, and EURC. Retrieved from https://techcrunch.com/2022/05/16/visa-expands-stablecoin-support-to-include-paypals-pyusd-usdg-and-eurcs/
[3] The Block Crypto (2022). Visa expands stablecoin support to include PayPal's PYUSD, Paxos-issued USDG, and Circle's EURC. Retrieved from https://www.theblockcrypto.com/linked/117294/visa-expands-stablecoin-support-to-include-paypals-pyusd-paxos-issued-usdg-and-circles-eurc
[4] Coindesk (2022). Visa partners with Stripe's Bridge to offer stablecoin-linked debit cards in Latin America. Retrieved from https://www.coindesk.com/business/2022/04/20/visa-partners-with-stripes-bridge-to-offer-stablecoin-linked-debit-cards-in-latin-america/
[5] Cointelegraph (2021). Visa announces support for USD Coin on Ethereum. Retrieved from https://cointelegraph.com/news/visa-announces-support-for-usd-coin-on-ethereum
[6] CoinMarketCap (2022). Avalanche (AVAX) and Stellar (XLM) Market Data. Retrieved from https://coinmarketcap.com/currencies/avalanche/ and https://coinmarketcap.com/currencies/stellar/
[7] CoinDesk (2021). Trump signs stablecoin bill into law, creating first federal framework for digital assets in the U.S. Retrieved from https://www.coindesk.com/policy/2021/12/23/trump-signs-stablecoin-bill-into-law-creating-first-federal-framework-for-digital-assets-in-the-us/
[8] CoinMarketCap (2022). Visa Inc. (V) Stock Price Today. Retrieved from https://coinmarketcap.com/currencies/visa/
- Visa has expanded its stablecoin settlement support to include three more stablecoins, marking an entrance into two new blockchain networks, Avalanche and Stellar, in addition to Ethereum and Solana.
- By supporting more stablecoins across diverse blockchains, Visa aims to create a standardized, scalable layer for stablecoin usage in institutional payments and settlements.
- With its increasing support for stablecoins, Visa is positioning itself to potentially lower entry barriers and boost stablecoin adoption at an institutional scale.
- Stablecoins, typically pegged to assets like the U.S. dollar to minimize volatility, have gained traction in the financial industry and are poised to accelerate payments using blockchain technology.
- Visa's recent partnership with Stripe's Bridge aspires to offer stablecoin-linked debit cards in Latin America, signifying the integration of stablecoins into mainstream payments.
- The Avalanche network, which supports AVAX, the 22nd largest digital asset by market cap, and Stellar's XLM, the 16th biggest crypto in the industry, now power Visa's stablecoin infrastructure.
- The GENIUS Act in the U.S. focuses on the issuance and regulation of stablecoins, but it does not directly impact the use or regulations of stablecoins outside the U.S.
- The increasing adoption of stablecoins and blockchain technology represents a potential reshaping of cross-border and domestic payment systems, offering more flexible, secure, and interoperable payment options within the financial ecosystem.
