While stablecoin ventures race to roll out digital currencies to consumers and businesses, Visa and Mastercard are adding up opportunities to collaborate.
The ascent of digital currencies, particularly the steadier stablecoin variety, has raised concerns among some backers of the traditional card networks that their businesses were threatened by the new age alternatives. But that’s not how it’s playing out, at least at the moment.
Visa, the largest U.S. card network, and its smaller rival Mastercard have become eager to join in the evolving stablecoin enterprises.
On Wednesday, the companies said in a joint release with cryptocurrency company Circle that they would support its new blockchain effort, Arc, aimed at creating a stablecoin system for financial markets, real-time payments and agentic commerce.
For Mastercard, the move showed how its strategy revolves around taking advantage of multiple emerging stablecoin prospects.
“The future of money movement will not be defined by a single rail, network or form of value,” Mastercard Chief Product Officer Jorn Lambert said in the release. “As stablecoins and other digital assets move into real-world payments, settlement, and treasury flows, Mastercard is focused on helping customers operate across an increasingly diverse payments ecosystem.”
Visa CEO Ryan McInerney said something similar about stablecoin strategy last week when he was asked about who was winning the stablecoin race, as a barrage of companies announce stablecoin launches.
“Visa, going forward, will remain multi-coin, multi-chain,” McInerney told analysts on the company’s July 28 earnings webcast. “Our role is not to pick winners. Our role is to help clients connect to the stablecoin ecosystem securely and at scale, regardless of which stablecoin, which network, which infrastructure ultimately gain adoption.”
Passage of the Genius Act last year was the first move by the U.S. government to create an infrastructure for use of stablecoins, which are cryptocurrencies designed to be more stable than others, like bitcoin, by being tied to a more stable asset, like the U.S. dollar. The new law, for which regulations are still being implemented, unleashed a wave of activity in the sector and egged on the arrival of more stablecoins.
Circle already operates one of the world’s largest stablecoin networks, with the digital asset called USDC, but the new Arc offering appears to target other uses, specifically the advancing world of agentic commerce where bots will shop and pay on behalf of consumers.
The stablecoin company described Arc in the release as “an enterprise-grade blockchain designed to become the Economic (operating system) for the internet.”
Also taking part in the Arc project are other payments companies, including digital payments services provider Global Payments and cross-border money transfer company MoneyGram, according to the release.
Visa and Mastercard teamed up with a pack of other companies in a separate stablecoin venture in June, locking arms with payments upstart Stripe, Circle crypto exchange partner Coinbase and other big-name financial companies, including BlackRock, to create Open USD.
The backers billed that new stablecoin as “open, low-cost, high-throughput, broadly accessible, and aligned to [partners’] interests,” with it being run by the company Open Standard, and governed by a board made up of Open USD partners. The Coinbase collective jolted Circle’s stock at the time because of the competitive threat to its stablecoin network.
That was another development that suggests the card networks are carving out a spot for themselves that sits above the stablecoin fray, or maybe more specifically between the stablecoin networks.
A financial analyst who follows Visa recently described the San Francisco-based company’s position this way: “We view Visa as the ‘stablecoin of stablecoins,’ being at the center of the global stablecoin ecosystem,” Mizuho Securities analyst Dan Dolev said in a report to clients last October. “Visa’s stablecoin strategy reinforces its goal of becoming an integral infrastructure player for blockchain-based payments.”
Dolev said “Visa could be one of the biggest stablecoin winners” for two key reasons, including its cross-border network Visa Direct’s ability to carry stablecoins internationally and the card network’s central position amid a proliferating number of stablecoins.
The latest announcement describing Visa and Mastercard’s ties to Circle would seem to be evidence that the card networks are becoming an integral part of the stablecoin community.
