Visa is not concerned that stablecoins will undermine the traditional payment system but sees this as an opportunity for growth. Stablecoins primarily serve large value transactions and are prevalent in emerging markets, where the demand for U.S. dollars is high but supply is limited.
According to Cuy Sheffield, Director of the cryptocurrency business at Visa, stablecoins have not addressed many issues in retail payments. Data indicates that most stablecoin transactions are large value transfers rather than daily small transactions.
MAIN CONTENT
Stablecoins do not threaten traditional payment companies but are seen as a collaboration opportunity.
The majority of stablecoin transactions are large money transfers, not retail payments.
Stablecoins have strong growth potential in emerging markets that need access to U.S. dollars.
How does Visa assess the impact of stablecoins on the traditional payment system?
Cuy Sheffield, head of the cryptocurrency department at Visa, asserts that stablecoins do not pose a danger to traditional payment companies but rather represent a new opportunity. He believes that the development of stablecoins opens up additional payment methods for consumers, not just limited to credit cards.
He also pointed out that the retail payment market has not yet been dominated by stablecoins because most transactions involve large amounts, being transfer-related rather than small retail payments. This indicates that the role of stablecoins is not widespread in the common consumer payment sector.
Stablecoins are not a threat but a new addition that helps expand the scope of digital payments.
Cuy Sheffield, Director of Cryptocurrency Business at Visa, July 27, 2024
Why are stablecoins primarily used for large-value transactions rather than retail payments?
Data shows that a large portion of stablecoin transaction volume comes from high-value transfers. This reflects the concentration of stablecoins in transactions that are not everyday retail payment transactions.
Stablecoins are designed for easy cross-border transfers and maintaining stable value, suitable for large transactions, helping to reduce the risk of price volatility compared to other tokens. This is also why stablecoins have not replaced traditional payment methods in retail transactions.
Which markets have growth potential for stablecoins and why?
Visa reveals that the market segment with the greatest opportunity for stablecoin development is emerging economies outside the United States, where there is high demand for U.S. dollars but limited access.
In these areas, people and businesses often struggle to access U.S. dollars due to limitations in financial infrastructure or capital control regulations. Stablecoins provide a more convenient solution, enabling currency conversion and maintaining stable value, supporting effective international business and transactions.
Stablecoins are an important digital financial solution for developing economies that need flexible access to U.S. dollars.
Cuy Sheffield, Director of the Cryptocurrency Department at Visa, July 27, 2024
Frequently Asked Questions
Do stablecoins threaten the traditional payment industry?
According to Visa experts, stablecoins currently represent an additional development opportunity, not a replacement or threat to traditional payment companies.
Why are stablecoins less used for small payments?
The majority of stablecoin transactions are large value transfers, unsuitable for retail payments due to technical characteristics and intended use.
Which markets have the highest demand for stablecoins?
Emerging markets outside the United States, where users need U.S. dollars but have restricted access to traditional currency channels, have great potential for stablecoin use.
What issues can stablecoins improve in cross-border payments?
Stablecoins help mitigate price volatility and high transaction fees, speeding up cross-border transfers more effectively.
What plans does Visa have for stablecoins in the future?
Visa sees stablecoins as an opportunity to expand digital payment services and will develop additional integrated solutions within the digital financial ecosystem.
Source: https://tintucbitcoin.com/giam-doc-visa-stablecoin-khong-nguy-hiem/
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