Visa's Insights on the Future Development of Stablecoins

Recently, the U.S. Senate passed the GENIUS Act, marking a further clarification of stablecoin regulation in the United States. Visa's Chief Strategy Officer Jack Forestell published an article outlining Visa's views on the future of stablecoins. As a leader in the traditional payment sector, Visa's perspective is worth noting.

Important Moments in Payment History

Forestell believes that the "GENIUS Act" could become a pivotal moment in the history of payments. While stablecoins represent new opportunities for programmable digital currencies, there is still a long way to go for large-scale adoption. Visa CEO McInerney also stated that Visa has been preparing for the era of stablecoins.

To establish new payment technologies, it is necessary to gain widespread trust, which takes time to accumulate. For stablecoins to become the next generation of digital payment infrastructure, they need to be implemented on three levels:

1. Technical Layer: Requires a strong, scalable, and flexible technological backbone to securely and reliably execute large-scale transactions.

2. Reserve Layer: Establish trust in the value and stability of the exchange medium. Regulated stablecoins provide a solution for this.

3. Interface Layer: Provides a ubiquitous interface that encourages participants to use it. It needs to provide trust, rules, standards, etc. for both parties in the transaction, covering billions of users and offering a convenient value exchange mechanism.

The stablecoin infrastructure itself cannot solve the problem of the last layer. If it cannot be popularized, stablecoins will struggle to become a mainstream payment method.

Visa's Support

Visa has built the world's largest, most secure, and most trusted payment system. Through the "Visa as a Service" stack, it offers a seamless and secure payment experience for billions of buyers and sellers worldwide.

Since 2020, Visa has facilitated nearly $100 billion in cryptocurrency-related transactions. There are 4.8 billion Visa credentials and nearly 14 billion digital tokens globally, making it the most widely accepted payment method.

With the capabilities of Visa, users no longer have to worry about whether merchants accept payments, the need for dedicated wallets, Gas fees, privacy protection, and other issues. The vast majority of consumers and businesses will continue to use fiat currency for payments, and stablecoin solutions will also be connected to the Visa system.

Application Scenarios of Stablecoins

Stablecoins have found product-market fit in the cryptocurrency trading market. For emerging markets, stablecoins still hold significant opportunities:

• Provide users with a dollar alternative in small coins, high inflation, and foreign exchange control countries.
• Cross-border capital flow, such as personal remittances or corporate payments

Visa will work with partners to leverage its strengths to develop these new scenarios.

In developed markets such as the United States, it is still unclear whether stablecoin payments can be widely adopted. The "GENIUS Act" provides clarity on stablecoin regulation, and Visa is also actively developing related solutions.

Stablecoins need time to truly realize their potential, but the process has already begun. The main application scenarios for stablecoins may be in emerging markets outside the United States, significantly improving the financial efficiency in these regions.