Visa and Mastercard report modest stablecoin adoption levels
In the rapidly evolving world of finance, two global payment giants – Visa and Mastercard – are keeping a keen eye on the growth of stablecoins, digital currencies tied to real-world currencies and maintaining a steady value.
Visa has experimented with the stablecoin USDC on the Ethereum network for cross-border payments, while Mastercard has run pilot programs and partnered with crypto platforms. However, both companies are not concerned about stablecoins posing a significant threat to their business at the moment, as the total volume of stablecoin transactions is currently much lower than the amounts processed by Visa and Mastercard.
The potential for stablecoins lies in situations that benefit from faster, cheaper, and borderless payments. In emerging markets and financial inclusion, stablecoins serve as a financial backbone for users seeking stability, access, and ways to earn without losing control. They appeal especially to the unbanked and underbanked populations by providing a more inclusive savings and payment option than traditional banking.
Cross-border and B2B payments are another area where stablecoins shine. They enable near-instant settlement, lower fees, and 24/7 accessibility, significantly improving traditional payments, which are typically slow, expensive, and opaque. This makes them attractive for remittances and international commerce.
Stablecoins also offer benefits for treasury and cash management by enabling tokenized cash payments that transcend traditional banking hours and reduce costs and operational friction. Innovative financial products, like “Stablecoin Earn,” which allow users to lock stablecoins and earn yields while maintaining control over their assets, attract everyday users beyond crypto natives, increasing stablecoin usage in personal finance.
As strategic partnerships and regulatory clarity improve, adoption grows, especially in payments interoperability and connectivity with major blockchain networks like Stellar and Avalanche. Institutional adoption is accelerating alongside on-chain settlement volumes expanding into the trillions, suggesting stablecoins increasingly serve as critical financial infrastructure in modern finance.
However, most people still prefer using traditional payment methods, such as bank cards, especially in countries with well-functioning financial systems. But stablecoin usage might grow in countries where the local currency loses value rapidly, such as Venezuela or Argentina. Mastercard sees potential for growth in these markets.
Both Visa and Mastercard are only open to new ideas if they are safe, trustworthy, and beneficial for their customers. They agree that digital coins could be beneficial in areas where people lack access to banking services. As the stablecoin landscape matures and regulatory frameworks become clearer, we may see these digital currencies becoming a more significant player in the world of payments.
[1] "The Role of Stablecoins in the Global Economy," International Monetary Fund, 2021. [2] "Stablecoins: A New Infrastructure for the Global Financial System," Bank for International Settlements, 2020. [3] "Stablecoins: Opportunities, Challenges, and Regulatory Considerations," Federal Reserve Bank of San Francisco, 2020. [4] "Stablecoins: The New Digital Currency," World Economic Forum, 2021.
- In the realm of technology and finance, both Visa and Mastercard are exploring the use of stablecoins, like USDC on the Ethereum network, for cross-border payments, showcasing their interest in leveraging blockchain technology to enhance traditional payment systems.
- Despite the potential of stablecoins in situations such as borderless, faster, and cheaper payments, particularly in emerging markets, the total volume of stablecoin transactions is currently smaller compared to the amounts processed by Visa and Mastercard, indicating a relatively slower adoption rate.
- Mastercard, with an eye on markets like Venezuela and Argentina where local currencies tend to lose value rapidly, sees growth potential for stablecoins as they provide a more inclusive and secure savings and payment option for the unbanked and underbanked populations.
- As regulatory clarity improves and stablecoins become a more integral part of the global financial infrastructure, Visa and Mastercard may increasingly view these digital currencies as beneficial, safe, and trustworthy alternatives for their customers, potentially leading to increased adoption rates in various business sectors.
