A duck knows when the river water warms in spring. Visa’s understanding of the next stage of stablecoins

Recently, the U.S. Senate passed the Guidance and Establishment of a United States Stablecoin National Innovation Act (also known as the GENIUS Act), which marks another important milestone in the clarification of U.S. regulation. Jack Forestell, Chief Strategy and Product Officer of Visa, published an article titled The potential genius of GENIUS on June 23, 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 views are very important. As one of the direct rulers of value transfer in the traditional fiat currency world, they must have seen through everything and made corresponding preparations. Therefore, we excerpt Visa's views and combined them with some of my own thoughts to jointly explore the next stage of stablecoins.

 (Visa CEO on GENIUS ACT: We've been embracing stablecoins)

1. Potentially important moments in payment history

Jack Forestell, Visa:

For Visa, the GENIUS Act should be viewed as a potentially important moment in payments history.

The reason why I say “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 because of the passage of the stablecoin bill. Visa has been preparing for stablecoins in recent years and is welcoming the arrival of the stablecoin world."

Scaling 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 intertwined set of features that work together to achieve safety, reliability, security, fraud protection, dispute resolution, ease of use, and continuous innovation.

For stablecoins to become part of the world’s next-generation digital payment infrastructure, they need to be implemented at three levels:

1. The Technology Layer

There must be a powerful, scalable, flexible and open technology backbone that can execute large-scale transactions securely and reliably and operate at high speeds, with zero tolerance for failures, leaks or violations.

Advances in blockchain technology have provided a promising solution to this problem.

2. The Reserve Layer

Trust must be established 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 has to be a ubiquitous interface layer where participants actively want to participate:

• This layer must provide trust, rules, standards, security, and value to participants on both sides of every transaction.
• It must scale to cover billions of end participants
• It must provide users with an easy and convenient mechanism to convert Value tokens into the fiat currency of their choice (i.e., users must be able to use the Value tokens they receive wherever they can and want to use them)

Stablecoin Infrastructure itself cannot solve the problem of the last layer. Without a solution, stablecoins will not be able to achieve large-scale popularization and become the mainstream means of value exchange.

If they are not ubiquitous, they will certainly be used to solve narrow payment problems, provide closed-loop solutions, and serve as the behind-the-scenes infrastructure for wholesale money flow markets and capital markets, but will not scale in mainstream payments.

Web3 Xiaolu’s thoughts here:

We can use the blockchain that has been verified for more than a decade as the settlement layer and the compliant stablecoin as the reserve layer, thus forming a stablecoin infrastructure. Similarly, the On/Off Ramp network and financial institutions of the legal currency channel around the world are equally important.

On this basis, we can realize the convenient exchange of fiat currency and stablecoins to support many real-world scenarios of stablecoin payments, solve the "last mile" problem, and make stablecoins ubiquitous.

Here are some strategic layouts to summarize:

• Visa strategically invests in stablecoin infrastructure BVNK; BVNK subsequently connects with online/offline acquiring giant Worldpay, as well as 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 10,000-word research report: Web3 transformation of consumer cross-border payments.
• Circle issued its own stablecoin USDC, started with Coinbase, and then built the Circle Payment Network with various financial institutions around the world - an important network of stablecoin infrastructure to achieve the last mile. Reference article: Circle released the "Stablecoin Payment Network" white paper.
• Stripe acquired Bridge and Privy to realize stablecoin infrastructure capabilities; through Stripe B2B2C strategy, it empowered B-side companies such as Shopify to achieve the last mile. Reference articles: Stripe acquires Bridge, Stripe acquires Privy.
• Ripple has evolved from the XRP blockchain to the RippleNet financial institution network to the RLUSD stablecoin. Reference articles: Ripple, XRP, RippleNet.
• Paypal uses its own stablecoin PYUSD to link up with superapp applications such as PayPal and Venmo to integrate its customer base and serve its 40 million users, allowing everyone to pay as they wish.

When Paypal first issued PYUSD, it introduced its evolution ideas:

When Paypal was first established, its responsibility was not only to promote the implementation of payments, but also to introduce and spread a new technology - digital payment. This digital payment method has now been integrated into our lives and is everywhere.

Although the stablecoin PYUSD launched by Paypal 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:

• Awareness. The GENIUS Act is the best form of awareness.
• Payment Utility, we are clearly at this stage now;
• Ubiquity requires more scenarios that support stablecoin payments, rather than a large number of applications for stablecoin licenses.

Similarly, Visa CEO also talked about the ability to truly realize payment needs in the interview, which complements Paypal's evolutionary thinking:

Scaling new payment technologies is not easy, we need to:

• Trust (Visa is supported by tens of thousands of financial institutions)
• Ease of use (front-end payment products, such as Visa Card, etc.)
• Scale (Visa’s network of tens of millions of consumers and merchants)

The final stage of adoption of any new payment technology is ubiquity, which is characterized by the seamless integration of the technology into daily life. At this stage, people are able to use the new payment technology effortlessly and without any awareness - people just pay as they please, just like we connect to the Internet as we please, without caring about the communication format of the telecom operator behind us.

For users, this may not have anything to do with 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-layer payment system. Visa has invested billions of dollars to continuously improve it, making it increasingly compatible with the underlying transaction medium and enabling all parties to easily and flexibly integrate into the Visa ecosystem.

By integrating Visa's infrastructure, services and connectivity, Visa provides billions of buyers and sellers around the world with seamless and secure digital payment experiences, with unmatched scale, reliability and security. Visa calls this powerful combination the "Visa as a Service" stack.

From the smallest sellers to the largest banks and enterprises, when the world needs to scale payment solutions, they choose the Visa stack. Crypto-native partners are no exception. For years, Visa has been working with leading cryptocurrency and stablecoin players and platforms to provide access to the Visa stack and enable the payments hyperscale that comes with it.

Since 2020, Visa has facilitated nearly $95 billion in cryptocurrency purchases and over $25 billion in cryptocurrency spending — a total of over $100 billion in funds moved.

Consumers and businesses around the world trust 4.8 billion Visa credentials and nearly 14 billion Visa digital tokens as the best way to pay and receive money for everyone, everywhere. Visa’s technology stack delivers a superior payment experience and is continually investing to make it the most advanced, secure and convenient way to pay.

With Visa’s capabilities, users no longer have to ask themselves these questions before making a purchase:

• Will the merchant accept my payment?
• Do I need a dedicated wallet to make payments?
• Do I have the right type of currency in my wallet? Am I on the right blockchain?
• What is the Gas Fee for paying this amount?

Can I keep my privacy? Once I purchase something from a merchant, can anyone else see all my transaction records and addresses without my permission?

• Can I get a reward?
• How do I use my credit line?
• If I have a problem, who do I talk to?
• Is it safe?

The vast majority of consumers and businesses will continue to pay with fiat currency and enjoy the convenience of Visa credentials. The same is true for stablecoin-powered solutions connected to the Visa stack.

Web3 Xiaolu’s thoughts here:

The core point that Visa wants to express here is: Even if you have the ability to build a stablecoin infrastructure, it is far from enough. We can also help you achieve scale through the Visa ecological network and Visa's capabilities. This is the core.

 (Visa CEO on GENIUS ACT: We've been embracing stablecoins)

But like Walmart, Amazon reportedly also considered issuing their own stablecoins. If these companies with huge scenarios can bypass the Visa/Mastercard settlement network and save a huge amount of payment intermediary fees, this will greatly improve their profitability.

This is an issue that Visa cannot avoid.

As written in the previous article "Web3 Payment 10,000 Words Research Report: How Stablecoins Will Perform in 2025":

The transaction fees of the current payment system directly erode the profits of most companies, and the reduction of these fees will bring huge profit margins to companies. The first shoe has already dropped: Stripe announced that they will charge a 1.5% fee for stablecoin payments, which is 30% lower than the fees they charge for credit card payments.

For simplicity, this assessment assumes that the business pays a 1.6% hybrid payment processing fee/cost and that currency acceptance costs are minimal.

• Walmart, with $648 billion in annual revenue, could pay $10 billion in credit card fees and make $15.5 billion in profit. Do the math: Eliminate payment fees and Walmart’s profitability, and therefore its valuation (if nothing else), could increase by more than 60% simply through a cheaper payment solution.
• Chipotle is a fast-growing fast-food restaurant with $9.8 billion in annual revenue. It makes $1.2 billion in profits each year, of which it pays $148 million in credit card fees. Just by reducing payment fees, Chipotle could increase profitability by 12%—an astonishing number not available elsewhere on its balance sheet.
• National grocer Krogers has the lowest margins and therefore stands to profit the most. Surprisingly, Krogers’ net revenue and payment costs may be almost equal. Like many grocery stores, its profit margin is less than 2%, which is less than the fees that businesses pay to process 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 this regard, 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. In particular:

• Users in small currencies, high inflation, and exchange rate-strapped countries who want to hold US dollars but cannot easily obtain them.
• For certain cross-border funds flow use cases, such as C2C person-to-person remittances or B2B enterprise-to-enterprise 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 driving force for USDT's market value growth may come from the trade of commodities.

Visa sees these use cases as new processes that are not yet fully addressed and provide a path for Visa’s business to grow. To this end, Visa plans to work with stablecoin native partners, platforms, and our financial institution partners to fully 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 payments, as there are already many competing options for making payments using "digital dollars" directly from bank accounts.

The GENIUS Act brings actionable regulatory clarity to stablecoins, opening up a potential path for further adoption. Visa is already actively working on a variety of solutions in the stablecoin space, including:

• Deploy Visa credentials and Visa digital tokens to connect stablecoin and cryptocurrency platforms and their users to fiat currencies and our global network
• Provide local stable currency settlement
• Achieving cross-border capital flow solutions through stablecoin infrastructure
• Providing programmable currency solutions to customers
• And more are in development

Of course, it will take time for stablecoins to become truly genius — and we’re just getting started.

Web3 Xiaolu’s thoughts here:

Visa CEO clearly stated that the public has a misunderstanding about stablecoins: because they are all US dollar stablecoins, everyone naturally thinks that the United States is the main landing area for stablecoin applications. However, the real use scenario of stablecoins, Product Market Fit, is actually outside the United States, which is what we call Asia, Africa and Latin America - Global South. There are about 30-50 countries here, and the access to stablecoins can greatly improve financial efficiency.

Tether CEO also confirmed this in an interview with Bankless:

The United States is one of the markets with the highest capital flow efficiency in the world, with an efficiency of up to 90% in its financial channels. The introduction of stablecoins can increase efficiency from 90% to 95%, with very limited room for premium. In contrast, in other parts of the world, the introduction of stablecoins can increase financial efficiency by 30%-40%. Therefore, stablecoins are more significant for these countries.

Therefore, in these markets, even Visa is hard to reach. In our previous article (Web3 Payment Research Report: Web3 Transformation of Consumer Cross-Border Payment), we can see that the choice of payment methods is different in different countries. If you are interested, you can take a closer look.

• Germany: Consumers are least willing to use credit or debit cards (only 32%), preferring digital app payment services (49%) and bank transfers or wire transfers (35%). This may be because consumers place greater emphasis on payment security and ease of use, as highlighted in the report "Online Payment Methods in Western Europe 2022".
• Philippines: Consumers prefer digital APP payment methods (49%), which may be related to the fact that 48.2% of local consumers cannot access the traditional banking system.

Similarly, we can see in Worldpay's 2025 report that Visa/Mastercard has a very low penetration rate in Nigeria, a major African economy. Cash is still king offline.

 (GPR 2025: the past, present and future of payments, WorldPay)

This is the power of Tether. While the Global North is engaged in an arms race, Tether has already penetrated the Global South.

• For example, there are still 3 billion people in the world who do not have bank accounts, and Tether currently covers 450 million users. The opportunities here are huge, and it is crucial to distinguish between different stablecoin products and application scenarios.
• Going deep into Asia, Africa and Latin America, investing in infrastructure, this innovative distribution channel and deep penetration into emerging markets are the key to Tether's leading position in the stablecoin field. Tether is not only technologically advanced, but also has established an unprecedented dollar distribution network around the world, which is one of Tether's least known advantages.

If we say that after Circle went public, it would be surrounded by competitors from traditional finance and industry giants.

Then Tether’s competitor is the “One Belt, One Road” initiative from Dongda University :)

 (Tether CEO’s understanding of the next stage of stablecoins)