Visa is bringing stablecoins into the mainstream of global payments, launching a program that lets merchants settle international transactions without ever touching a digital asset.
Under the partnership between Visa and stablecoin infrastructure provider BVNK, businesses in certain markets will be able to pre-fund payments using digital assets and send payouts directly to recipients’ digital wallets. The payouts will run on Visa Direct, Visa’s real-time transfer network, which operates continuously, including on weekends and holidays. BVNK will provide the infrastructure connecting wallets and blockchains, as well as conduct compliance checks.
The new offering builds on a pilot program Visa launched last October, marking the first time a major payment rail—one that already processes the lion’s share of cross-border transactions—has adopted stablecoins.
Getting Ahead of the Fintechs
Other payment services like Stripe and Shopify offer similar stablecoin settlement capabilities. But Visa’s prominence in the global payments industry is likely to make merchants far more comfortable adopting the model at scale.
“The way Visa and BVNK have it set up, their service permits merchants to accept fiat payment just like normal payments, where stablecoins are being used to settle on the other side,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “Essentially, with the indirect method that Visa is leveraging, merchants won’t have to touch stablecoins or cryptocurrencies if they don’t want. This eliminates price volatility, treasury management associated with typical cryptocurrencies, and several other things that retailers don’t want to deal with.”
Aggressive Moves in the Space
The new offering should further strengthen Visa’s foothold in the cross-border payments market. It already processes more than $4.5 billion in annualized stablecoin settlement volume. Still, that’s just a drop in the bucket for Visa Direct, which has handled nearly $1.7 trillion annually in payments.
Visa has made several aggressive moves in the stablecoin market within the past year. Last May, the company invested in BVNK, which processes over $30 billion in stablecoin payments annually, through its venture arm.
Last month, Visa launched a new advisory service to help banks, credit unions, and other enterprises implement their own stablecoin strategies. Offered under the Visa Consulting & Analytics umbrella, the Stablecoin Advisory Practice provides training, market analysis, strategy development, use-case sizing, and technical support for organizations exploring digital assets.
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