Author: Lanhu Notes
Visa personally enters the stablecoin market: It has launched a stablecoin platform. The goal is to make it easier for banks, financial institutions, and fintech companies to issue and manage stablecoins, seamlessly integrating them into Visa's existing payment ecosystem.
Specifically, the functions of Visa's stablecoin platform include:
• Stablecoin minting, movement, and management;
• Helping banks and financial companies integrate stablecoins into existing payment, settlement, and fund transfer systems.
The target is to cover over 200 million merchants and 15,000 financial institutions.
Visa is a traditional payment giant. This time, by personally entering the stablecoin infrastructure construction, it is diving headfirst into the game. Its strategy is to embrace and upgrade stablecoins, not to eliminate them. The larger the stablecoin scale, the more transactions Visa's network processes (they are already earning real revenue from this).
This is very beneficial for the next step of stablecoin adoption, as it will expand the entire stablecoin market (more adoption scenarios). However, the market concentration of top-tier issuers may decline, with competition shifting towards distribution capabilities, merchant access, and compliance.
So, what impact will this have on Tether/Circle?
For USDC (Circle), it is a short-term positive. By directly supporting USDC settlement and integration through the Visa platform, USDC has a first-mover advantage. Of course, in the medium to long term, there will be fierce competition, and alliance coins like OUSD + bank-issued stablecoins may divert some institutional/payment business. Circle's advantages are compliance and existing integrations, but the model of "a single issuer earning reserve interest" will be challenged (alliance models may share revenue with distributors).
For USDT (Tether), the impact is relatively greater. USDT dominates in trading volume and emerging markets. Traditional finance, like Visa, tends to favor compliant and transparent options (such as USDC/OUSD). USDT remains strong in purely crypto scenarios, but its share in merchant payments and institutional settlement may be eroded.
In summary,
Visa is not here to "take down" USDC/USDT; it is mainly here to "collect rent" and expand the pie. It is positive for those who hold a long-term position in the stablecoin ecosystem. However, the model that relies solely on issuing coins for interest will face challenges going forward.
What impact will this have on Ethereum?
The conclusion is that it is neutral to slightly positive for ETH. The positive aspect is that it will indirectly benefit from accelerated stablecoin adoption.
Visa cooperates closely with the Ethereum ecosystem. Visa's stablecoin platform will allow more traditional funds to flow into the ETH network in the form of stablecoins.
In the long run, the mainstreaming of stablecoins will attract more institutions/merchants to go on-chain, increasing the demand for ETH as a settlement layer/L1 (especially after L2 scaling, with gas fees and MEV profits). Visa's previous data also shows that stablecoin transaction volume is driving on-chain activity.
Of course, Visa's stablecoin platform will undoubtedly support multiple chains, not just Ethereum. However, as the most mature and decentralized chain, Ethereum is the preferred choice for institutions in terms of compliant stablecoins.
