Written by: Will Awang
Recently, the US Senate passed the (Guidance and Establishment of National Innovation Act for Stablecoins in the United States) (also known as (GENIUS Act)), which marks another important milestone in the US regulatory trend towards clarity. Visa's Chief Strategy and Product Officer Jack Forestell published an article on June 23 entitled The potential genius of GENIUS, which elaborated on Visa's views on the subsequent stablecoin world. This is consistent with the views of Visa CEO Ryan McInerney in an interview with CNBC.
Visa's point of view is very important, as one of the direct rulers of the traditional fiat currency world's value transfer, they must have seen everything and prepared accordingly. Therefore, we will extract Visa's point of view and combine it with my own thoughts to jointly explore the next stage of stablecoins.
(Visa CEO on GENIUS ACT: We've been embracing stablecoins)
1. A 'Potential' Important Moment in Payment History
Jack Forestell, Visa:
For Visa, (GENIUS Act) should be regarded as a 'potential' important moment in payment history.
The reason for saying 'potential' is that although stablecoins represent an opportunity to usher in the next age of digital programmable money, there is still a lot of work to be done to truly achieve scale.
Visa CEO Ryan McInerney also said: "Our world has not changed much due to the passage of the stablecoin bill. Visa has been preparing for stablecoins for the past few years and welcoming the arrival of the stablecoin world."
Expanding new payment technologies is not easy, it requires building broad trust with buyers, sellers, payers and payees. Building this trust takes time and is rooted in a complex and interconnected set of functions. Through the combined effect of these functions, to achieve security, reliability, security, fraud protection, dispute resolution, ease of use, and continuous innovation.
If stablecoins are to become part of the world's next-generation digital payment infrastructure, they need to be implemented on three levels:
1. The Technology Layer
There must be a robust, scalable, flexible, and open technology backbone that can securely and reliably execute large-scale transactions and operate at high speed, with zero tolerance for failures, leaks, or breaches.
Advances in blockchain technology have provided a promising solution to this problem.
2. The Reserve Layer
There must be trust in the value and stability of the medium of exchange.
Regulated, reserve-backed stablecoins offer a solution to this problem.
3. The Interface Layer
There must be a ubiquitous interface layer that participants actively want to participate in:
This layer must provide trust, rules, standards, security, and value for each transaction participant.
It must scale to cover billions of end participants
It must provide users with a simple and convenient mechanism to convert value tokens into their currency of choice (i.e., users must be able to use the value tokens they receive where they can and want to use them)
Stablecoin Infrastructure cannot solve the last layer on its own. Without a solution, stablecoins cannot achieve the vision of mass adoption and becoming a mainstream means of value exchange.
If they cannot be popularized, then they will definitely be used to solve narrow payment problems, provide closed-loop solutions, and serve as behind-the-scenes infrastructure for wholesale money flow markets and capital markets, but will not scale in mainstream payments.
Web3 Xiao Lv's thoughts here:
We can use the blockchain verified over the past ten years as the settlement layer, and compliant stablecoins as the reserve layer, thereby forming a stablecoin infrastructure. Similarly, the On/Off Ramp networks and financial institutions of fiat currency channels around the world are equally important.
On this basis, we can achieve convenient exchange between fiat currency and stablecoins to support many real-world scenarios of stablecoin payments, solve the "last mile" problem, and make stablecoins ubiquitous.
The several strategic layouts seen here can be simply summarized as:
Visa strategically invests in stablecoin infrastructure BVNK; BVNK subsequently connects to online/offline acquiring giants Worldpay, and cross-border SME acquiring solution LianLian Pay and other partners, while combining its own capabilities such as Visa Direct and Account/Card products to achieve the last mile. Reference article: Web3 Payment Research Report: Web3 Transformation of Consumer Cross-border Payments.
Circle self-issues stablecoin USDC, starting with Coinbase, and then builds Circle Payment Network with various global financial institutions - an important network of stablecoin infrastructure to achieve the last mile. Reference article: Circle Releases 'Stablecoin Payment Network' White Paper.
Stripe acquires Bridge and Privy to achieve stablecoin infrastructure capabilities; through Stripe's B2B2C strategy, it empowers B-end companies such as Shopify to achieve the last mile. Reference articles: Stripe Acquires Bridge, Stripe Acquires Privy.
Ripple from XRP blockchain to RippleNet financial institution network, and then to RLUSD stablecoin. Reference article: Ripple, XRP, RippleNet.
Paypal uses its own stablecoin PYUSD to link the ecosystem of superapp applications such as PayPal and Venmo, in order to integrate customer groups, serve its 40 million users, and allow everyone to pay as they wish.
Paypal introduced its evolution ideas at the beginning of the issuance of PYUSD:
At the beginning of its establishment, Paypal not only shouldered the responsibility of promoting payment implementation, but also introducing and spreading a new technology - digital payment, which has now been integrated into our lives and is ubiquitous.
Although Paypal's launch of the stablecoin PYUSD is not so eye-catching, Paypal's previous successful experience can provide experience guidance and novel insights for the launch of PYUSD stablecoin payment. Specifically, Paypal divides the evolution of Mass Adoption into three stages:
Cognitive awakening (Awareness), (GENIUS Act) is the best awakening;
Payment utility (Utility), obviously we are currently in this stage;
Ubiquity, needs more scenarios to support stablecoin payments to appear, instead of crowding there to apply for stablecoin licenses.
Similarly, Visa CEO also talked about the capabilities required to truly realize payments in the interview, which complements Paypal's evolution ideas:
Expanding new payment technologies is not easy, we need:
Trust (Support from Visa's tens of thousands of financial institutions)
Ease of Use (Front-end payment products, such as Visa Card, etc.)
Scale (Visa's tens of millions of consumers and merchant networks)
The last stage of adopting any new payment technology is ubiquity, which is characterized by the seamless integration of technology into everyday life. At this stage, people are able to use new payment technologies effortlessly and seamlessly - people are just paying as they want, just like we are connected to the Internet as we want, without caring about the communication format of the telecom operators behind it.
For users, this may be irrelevant to blockchain or stablecoins.
2. Visa will help solve this problem
Jack Forestell, Visa:
Visa has built the world's largest, most secure, most trusted, and most recognized third-tier payment system. Visa has invested billions of dollars in continuous improvement to make it increasingly compatible with underlying transaction media, and to enable all parties to easily and flexibly integrate into the Visa ecosystem.
By integrating Visa's infrastructure, services, and connectivity, Visa provides seamless, secure digital payment experiences to billions of buyers and sellers worldwide, with unparalleled scale, reliability, and security. Visa calls this powerful combination the 'Visa as a Service' stack.
From the smallest sellers to the largest banks and businesses, when the world needs to expand payment solutions, they choose the Visa stack. Cryptocurrency native partners are no exception. For many years, Visa has been working with leading cryptocurrency and stablecoin participants and platforms to provide access to the Visa stack and enable the resulting payment hyperscaling.
Since 2020, Visa has facilitated nearly $95 billion in cryptocurrency purchases and over $25 billion in cryptocurrency spending—totaling over $100 billion in fund flows.
Global consumers and businesses regard 4.8 billion Visa credentials and nearly 14 billion Visa digital tokens as the best payment method and the best way for everyone, everywhere to receive payments. Visa's technology stack provides an excellent payment experience and will continue to invest to make it the most advanced, secure, and convenient payment method.
Through Visa's capabilities, users no longer need to ask themselves the following questions before shopping:
Will the merchant accept my payment?
Do I need a dedicated wallet to pay?
Does my wallet have the correct type of currency? Am I on the correct blockchain?
How much Gas Fee will it cost to pay this payment?
Can I keep my privacy? Once I buy something from a merchant, can everyone else see all my transaction records and addresses without my permission?
Can I get rewards?
How do I use my credit line?
Who should I talk to if I have a problem?
Is it safe?
The vast majority of consumers and businesses will continue to pay with fiat currencies and enjoy the convenience of Visa credentials. The same is true for stablecoin-driven solutions connected to the Visa stack.
Web3 Xiao Lv's thoughts here:
The core point that Visa wants to express here is that even if you have the ability of stablecoin infrastructure, having the ability is far from enough, we can also help you achieve scale through the Visa ecosystem network and Visa's capabilities. This is the core.
(Visa CEO on GENIUS ACT: We've been embracing stablecoins)
But like Walmart and Amazon, they are also reportedly considering issuing their own stablecoins. If these companies with huge scenarios can bypass the Visa / Mastercard settlement network, they can save huge payment intermediary fees, which will greatly improve their profitability.
This is a question that Visa cannot avoid.
As written in the previous article (Web3 Payment Research Report: How Stablecoins Will Play Out in 2025):
The transaction fees of the current payment system directly erode the profits of most companies. The reduction of these fees will bring huge profit margins to companies. The first shoe has landed: Stripe announced that they will charge 1.5% for stablecoin payments, which is 30% lower than the credit card payment fees they charge.
For convenience, this assessment assumes that businesses pay a blended payment processing fee/cost of 1.6% and that currency acceptance costs are negligible.
Walmart's annual revenue is $648 billion, and it may pay $10 billion in credit card fees with a profit of $15.5 billion. Let's calculate: Eliminating payment fees and Walmart's profitability, therefore its valuation (not considering other factors) could increase by more than 60% through cheaper payment solutions alone.
Chipotle is a fast-growing fast food restaurant with annual revenue of $9.8 billion. It has an annual profit of $1.2 billion, of which $148 million is paid in credit card fees. By lowering payment fees alone, Chipotle's profitability could increase by 12% - an amazing figure that cannot be obtained elsewhere on its balance sheet.
National grocery store Krogers has the lowest profit margin, so it benefits the most. Surprisingly, Krogers' net income and payment costs may be almost equal. Like many grocery stores, its profit margin is less than 2%, which is lower than the cost of businesses processing credit card payments. With stablecoin payments, Krogers' profits could double.
(How stablecoins will eat payments, and what happens next, a16z)
3. What problems can stablecoins solve?
Jack Forestell is often asked "What problem do stablecoins solve?"
In response, he said: First, stablecoins have perfectly found Product Market Fit in the cryptocurrency trading market, and for some use cases, including emerging markets, stablecoins still represent important opportunities. especially:
Users in small currencies, high inflation, and foreign exchange constrained countries want to hold dollars but cannot easily obtain dollars.
For certain cross-border capital flow use cases, such as C2C personal remittances or B2B corporate payments.
Tether CEO: Less than 40% of Tether's market value is related to the cryptocurrency market. In other words, more than 60% of the market value growth actually comes from the grassroots use of USDT in emerging markets. The next driver of USDT market value growth may come from commodity trading.
Visa views these use cases as new processes that are not fully addressed today, providing avenues for Visa's business growth. To that end, Visa plans to work with stablecoin-native partners, platforms, and our financial institution partners to leverage the power of the Visa stack.
At present, it is unclear whether consumers and businesses in developed markets such as the United States are willing to use stablecoins for payment, because there are currently many competitive options that can be used to pay with 'digital dollars' directly from bank accounts.
(GENIUS Act) brings tangible regulatory clarity to stablecoins, opening a potential path for further applications. Visa has been actively developing various solutions in the stablecoin space, including:
Deploy Visa credentials and Visa digital tokens to connect stablecoins and cryptocurrency platforms and their users to fiat currencies and our global network
Provide local stablecoin settlement
Enable cross-border capital flow solutions through stablecoin infrastructure
Provide customers with programmable currency solutions
And more is under development
Of course, it will take time for stablecoins to truly become genius - and we are just getting started.
Web3 Xiao Lv's thoughts here:
Visa CEO clearly stated that there is a misunderstanding among the public about stablecoins: because they are currently all dollar stablecoins, it is taken for granted that the United States is the main landing area for stablecoin applications. However, the real use case Product Market Fit of stablecoins is actually in areas outside the United States, which is what we call the Global South in Asia and Africa. There are about 30-50 countries here, and the access of stablecoins can greatly improve financial efficiency.
Tether CEO also confirmed this in a previous interview with Bankless:
The United States is one of the most efficient markets for global capital flows, with financial channels that are 90% efficient. The introduction of stablecoins could increase efficiency from 90% to 95%, with very limited premium space. In contrast, in other parts of the world, the introduction of stablecoins could provide a 30%-40% increase in financial efficiency. Therefore, stablecoins are more meaningful for these countries.
Therefore, even for Visa, it is difficult to reach these markets. In our previous article (Web3 Payment Research Report: Web3 Transformation of Consumer Cross-border Payments), we can see that the choice of payment methods varies from country to country. Everyone is welcome to take a closer look.
Germany: Consumers are least willing to use credit cards or debit cards (only 32%), but prefer digital APP payment services (49%) and bank transfers or wire transfers (35%). This may be because consumers value the security and ease of use of payments, as highlighted in the (2022 Western European Online Payment Methods) report.
Philippines: Consumers prefer digital APP payment methods (49%), which may be related to the fact that 48.2% of local consumers cannot access traditional banking systems.
Similarly, we can see in Worldpay's 2025 report that the penetration rate of Visa / Mastercard in Nigeria, the main economy in Africa, is very low. Cash is still king offline.
(GPR 2025: the past, present and future of payments, WorldPay)
This is the power of Tether. When the global north is engaged in an arms race, Tether has already penetrated the Global South.
If there are still 3 billion people in the world who do not have bank accounts, and Tether currently covers 450 million users, the opportunity here is huge. It is crucial to distinguish between different stablecoin products and application scenarios.
Deepening into Asia, Africa, and Latin America and investing in infrastructure, this innovative distribution channel and deep penetration into emerging markets are the keys to Tether's leading position in the stablecoin field. Tether is not only technically leading, but also has established an unprecedented dollar distribution network globally, which is one of Tether's most unknown advantages.
If Circle goes public, it will turn around and find that all its competitors come from traditional finance and industry giants.
Then Tether's competitor comes from the "Belt and Road Initiative" in East Asia :)
(Tether CEO's understanding of the next stage of stablecoins)
