Visa’s annualized stablecoin settlement volume has surpassed $25 billion, ten times its level a year earlier. This expansion puts stablecoins in competition with traditional transfer and settlement services, while integrating them allows Visa to participate in payment flows that could develop outside its network. The network’s value therefore also depends on the services surrounding the transfer itself, including access to merchants and coordination among the participants.
From payment to settlement
Visa operates the network connecting card issuers with acquirers, the providers handling payments for merchants; both roles are performed by banks and other intermediaries. When a terminal confirms a purchase, the customer sees that the transaction has been authorized, while the parties involved must subsequently settle the amounts owed, which may reflect the aggregation of multiple payments. Visa allows eligible partners to use stablecoins at this stage, changing how funds move between participants without requiring each purchase to generate a blockchain transaction.
For an operator already holding liquidity in USDC, using it to settle obligations to Visa can reduce the need to convert it into fiat currency and route it through additional banking arrangements. Merchants can continue receiving fiat currency and consumers can keep using their cards. This separation between the payment experience and the settlement infrastructure explains why adoption can progress without an explicit request from end users. Intermediaries make the decision by comparing the available options for funding and settling the flows they already handle.
The economic value of liquidity
The potential benefit emerges when infrastructure operating hours force an operator to position funds before they are actually needed. A company active across several markets may have to prefund payments over a weekend, maintaining precautionary balances in multiple accounts. The ability to transfer stablecoins around the clock can allow liquidity to be managed more closely in line with requirements: this is the rationale behind the Visa Direct capability that enables cross-border payment balances to be funded in USDC.
Greater flexibility can reduce the time liquidity is tied up, but operators still need their own funds or credit when payments to the network fall due before funds are collected from users, even if settlement takes place on a blockchain. Credit facilities linked to Visa’s settlement data show how disbursements can be aligned more closely with amounts due, coordinating the movement of funds with the financing needed to support it.
Cost-effectiveness must nevertheless be assessed across the entire process, including conversions, availability of the required currency and the cost of the services involved. A Bank of Italy study based on transfers of 200 USDC across ten international corridors found no systematic cost advantage over traditional channels. The main frictions arose when moving into and out of stablecoins, while the blockchain transfer itself accounted for only a small share of the cost. Although the study concerned retail remittances, its findings illustrate a principle relevant to institutional use: reducing the cost of one component creates value when it improves the economics of the service as a whole.
Why Visa is integrating stablecoins
The value of a network such as Visa comes from providing access to merchants, supporting transaction authorization and coordinating participants that use different systems. By integrating stablecoins into settlement and linking them to cards, Visa can participate in new flows while retaining a role in the payment process. The spread of an alternative technology can therefore also increase demand for the services of providers able to incorporate it. The existing acceptance network reduces the need for new providers to persuade merchants individually to adopt a different payment instrument.
Support for five stablecoins across ten blockchains highlights the value of connecting these systems. The ability to transfer a token on a network does not ensure that every counterparty can use it to meet its obligations or convert it into the required currency. Acceptance of the instrument, access to liquidity and integration with operational processes all matter, and Visa seeks to coordinate these elements within its network. The competitive implication is that more open infrastructure can coexist with the concentration of services among providers able to bring together networks, currencies and commercial relationships.
This choice can also be interpreted as a response to the risk that other providers build payment services around direct stablecoin transfers. If more merchants were able to receive and manage them, some purchases could take place without a card. In that scenario, payment networks’ position would depend more heavily on the quality of their additional services and overall cost-effectiveness for payers and payees. The commercial value of integration will therefore depend on the services users and operators are willing to pay for.
From digital wallets to everyday spending
Visa has more than 225 stablecoin-linked card programs, covering around five million cards in more than 50 countries, with transaction volumes increasing by over 150% year on year. These cards allow holders to spend digital wallet balances at merchants on the network, while the program manager checks that funds are available and arranges any necessary conversion. Merchants can continue receiving fiat currency without having to handle tokens, while users can spend their digital balances through a familiar payment instrument.
Stablecoin-linked cards and stablecoin settlement therefore represent two distinct dimensions of adoption. The former change how cardholders fund their spending, with balances potentially converted into fiat currency before settlement; the latter change the instrument intermediaries use to settle obligations to the network, even for payments denominated in fiat currency. The distinction helps interpret growth figures correctly and assess where benefits arise: in enabling everyday spending, in managing flows between participants, or in combining the two functions.
Conclusions
Visa’s approach illustrates how stablecoin adoption involves both the management of financial flows and access to the services businesses and consumers use to make payments. Integration can make settlement more flexible, while merchant acceptance and coordination among participants remain part of the service provided by the network. Visa’s competitive position will depend on its ability to combine these elements into an offering that compares favorably with alternatives, including those built directly on blockchain. The economic case needs to be assessed across the entire payment process, taking account of liquidity management, conversion costs and ease of use.
