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Visa has rolled out its stablecoin settlement service in the United States. This allows financial institutions to process settlements using Circle’s USDC stablecoin on the Solana blockchain. It is a major milestone for Visa as it develops its crypto-linked services, which have experienced a rise in demand across fintech and crypto firms.
Cross River Bank and Lead Bank are the first financial institutions in the United States to use the service, and it is expected to be widely available by 2026.
The launch follows the Trump administration's decision to introduce clearer guidelines for the use of fiat-pegged cryptocurrencies in 2023. The clear regulations have paved the way for the adoption of stablecoins in the financial systems of the United States.
Visa’s entry into this market is not just the provision of settlement facilities; Visa has also set up a global stablecoin advisory practice that helps banks, fintechs, and merchants integrate stablecoin technology into their operations.
According to the promises made by Visa, the new stablecoin settlement service will enable near-instant payment settlements, even on weekends and holidays, compared to the current payment system that takes up to three business days. This service is expected to enable banks to enhance their liquidity management.
Financial institutions are choosing digital currencies and utilizing them to improve their payment systems. The use of stablecoins such as USDC is also rising as they provide stability and are pegged one-to-one with assets like US Treasury bonds.
The increasing adoption of stablecoins can create a transformation in the payment sector. Experts predict that stablecoins may handle more than $50 trillion in payments annually by 2030.
As Visa continues to expand stablecoin settlements, the company is seeking not only to facilitate transaction settlements but also to position itself as an essential component of the crypto infrastructure industry.
Furthermore, Visa has partnered with Circle to support its Arc blockchain, an infrastructure that aims to allow financial institutions to create their own fiat-backed digital assets. Visa has also pledged to operate a validator node on the Arc network after launch.
Although Visa’s stablecoin settlement platform remains relatively small compared to its overall $17 trillion payment network, with an annualized volume of $3.5 billion as of November 2023, it is a rapidly expanding business.
Moreover, the stablecoin industry is likely to see further growth and it is a positive start for Visa to position itself early to become a key partner for banks and fintech companies seeking fast and efficient financial payments using stablecoins.
Additionally, Visa’s move into the stablecoin market aligns with other payment giants, such as Mastercard’s similar forays into the market. The competition is rising as more platforms incorporate stablecoin payment solutions.
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