The digital payment field is witnessing an intense territorial battle, with payment giants Visa and Mastercard, who once dominated the market, now facing a direct impact from the emerging stablecoin wave. This is not just a technological innovation, but a strategic battle for the future of payments.
Stablecoins: Threat to Emerging Payment Methods
For a long time, Visa and Mastercard have held an undisputed position in the digital payment realm through their extensive network and powerful brands. However, the rise of a new type of digital currency - stablecoins - is challenging their traditional business model with unprecedented advantages.
The core threats include:
Cost Advantage: Stablecoins allow consumers to pay merchants directly from crypto wallets, bypassing traditional bank and card network routing. This means significantly reducing or even eliminating the massive "card fees" that businesses pay to card networks annually (around $187 billion in the US last year).
Efficiency Improvement: Stablecoins promise faster settlement, especially for cross-border payments, with their immediacy and low-cost advantages being particularly prominent, which is one of the most popular use cases for stablecoins.
Bypassing Giants: Stablecoins provide a way to complete transactions without relying on the Visa and Mastercard networks, potentially fundamentally undermining these giants' core position in the payment ecosystem.
The explosive growth of the stablecoin market has further intensified this threat. Currently, the stablecoin market cap has reached $253 billion, and according to U.S. Treasury Secretary Scott Bessent, it is expected to grow to over $3 trillion in the coming years.
This massive market potential has attracted tech companies, crypto startups, and even large retailers (such as Walmart considering a stablecoin pilot) to enter the field, collectively driving the development of the stablecoin payment ecosystem.
Within the crypto industry, stablecoins have evolved from mere crypto asset anchors to the underlying infrastructure of the digital economy, with increasingly mature application scenarios and ecosystem development, further accelerating the impact on traditional payment systems:
Core Pillar of DeFi: Stablecoins are the core of the DeFi ecosystem, playing an indispensable role in lending, collateralization, liquidity mining, and decentralized exchanges (DEX). The massive stablecoin funds flowing through DeFi protocols demonstrate their efficiency and widespread acceptance as digital dollars.
Enhanced Cross-Chain Interoperability: With advances in cross-chain technology (like LayerZero), mainstream stablecoins such as USDT and USDC have been deployed across multiple chains and can seamlessly transfer between different blockchains through bridging technology. For example, Bitfinex's Layer 1 blockchain Stable uses Tether's USDT as its native gas token and integrates LayerZero's decentralized USDT0 token, aiming to create a more efficient, low-cost native stablecoin payment network.
Deepening Enterprise and Institutional Applications: More and more crypto institutions and Web3 enterprises are using stablecoins as their internal standard for fund management and payment settlement. Institutional investors are also beginning to use stablecoins for large-scale, fast over-the-counter (OTC) trades and cross-border settlements, significantly reducing fees and time costs of traditional banking channels.
Real World Assets (RWA) Tokenization Wave: Stablecoins serve as a bridge between real-world assets and the blockchain world. As more real-world assets are tokenized and moved on-chain, stablecoins will further expand their use cases to trading and clearing traditional financial assets.
New Payment Infrastructure: Beyond Shopify and Stripe's, Coinbase's collaboration, Coinbase has launched its own payment platform aimed at supporting more e-commerce providers to directly accept stablecoin payments, offering a 1% USDC cashback incentive, directly establishing a new payment link between merchants and consumers, completely bypassing traditional card networks. Additionally, banking technology provider Fiserv has launched its own fiat-supported token to help small financial institutions keep up with payment innovation.
These dense industry actions collectively construct an increasingly mature and powerful stablecoin payment network, directly posing strong competition to the traditional payment routing relied upon by Visa and Mastercard.
Visa and Mastercard's 'Counterattack' and Strategy
Facing the stablecoin impact, Visa and Mastercard are actively adjusting their strategies, attempting to transform from "old-fashioned fee collectors" to "backbones of various digital transactions," even if these transactions were initially designed to bypass them.
The main response strategies include:
Convergence and Coexistence: The two giants no longer view stablecoins as pure competitors, but are trying to "absorb" them into their own networks. They have historical precedents of maintaining pricing power by integrating competitors.
Technical Upgrades and Service Expansion:
Stablecoin Settlement and Crypto Cards: Strongly promoting their capabilities in stablecoin settlement and crypto-related cards.
Cross-border Payments: Emphasizing advantages in cross-border payments, which overlap with popular stablecoin use cases.
Tokenization Technology: Utilizing existing tokenization technologies (such as blurring account information to protect consumers) and extending them to crypto assets. Visa's Chief Product and Strategy Officer Jack Forestell stated that while tokenization is currently mainly based on bank accounts or credit lines, there is "absolutely no reason it cannot be stablecoins or other cryptocurrencies".
Investment and Collaboration: Visa Ventures invested in stablecoin infrastructure provider BVNK. Mastercard joined the Paxos Global Dollar Network, supporting institutional minting and redemption of stablecoins like USDG, and supporting Fiserv's FIUSD, PayPal's PYUSD, and Circle's USDC.
Flexible Payment Routing: Mastercard is exploring more granular payment routing control, such as routing small transactions through checking accounts, large transactions through credit lines, and transactions with specific merchants potentially deducted from crypto wallets - all linked to a single payment identity.
Mastercard's Chief Product Officer Jorn Lambert believes the emergence of stablecoins is more about "new use cases and new opportunities" rather than "replacing existing systems", especially in remittances, payments, and business-to-business payments.
Challenges in Stablecoin Adoption
Despite the broad prospects for stablecoins, completely disrupting traditional card networks, especially in the US, still faces many challenges:
Consumer Habits and Benefits: US consumers are accustomed to credit card rewards, fraud protection, and convenient credit access, advantages that stablecoins currently find difficult to fully replace.
Perception and Trust: For many ordinary consumers, cryptocurrencies remain unfamiliar or even suspicious, and stablecoin balances currently do not enjoy traditional financial protections like FDIC insurance.
Merchant Risks and Compliance: Adopting new payment technologies may bring compliance, tax, and operational risks to merchants, which will require time and education to overcome.
Regulatory Framework Improvement: Although the US Congress is advancing stablecoin regulatory legislation like the GENIUS Act, representing an important step towards regulation, a comprehensive and globally unified regulatory framework is still under construction and improvement, bringing significant uncertainty to large-scale stablecoin adoption.
Lack of Global Consensus: There are huge differences between countries and regions in stablecoin definitions, issuance, reserve requirements, anti-money laundering (AML), and know-your-customer (KYC) standards. For example, the EU's MiCA (Markets in Crypto-Assets) regulation is relatively mature, while the US is still exploring different paths at federal and state levels. This fragmented and uncoordinated status makes it difficult for stablecoin issuers and users to operate seamlessly globally.
Compliance Costs and Risks: For stablecoin issuers operating internationally, simultaneously complying with multiple different and sometimes conflicting regulations will be extremely costly and complex. This uncertainty also increases potential legal and regulatory risks, potentially leading to future fines or business restrictions.
Institutional Concerns: Traditional financial institutions, large enterprises, and broader investors often maintain a wait-and-see attitude in the absence of clear and stable legal and regulatory guidelines. They worry that future policy changes might affect their asset safety or operational legality, thus limiting large-scale integration and application of stablecoins in mainstream financial systems.
Consumer Protection Concerns: Although some bills are dedicated to consumer protection, the consumer protection mechanisms for stablecoins are not yet fully clear and unified compared to federal insurance for traditional bank deposits, which might affect ordinary users' confidence in their safety.
Can Stablecoins Completely Disrupt Traditional Payment Systems?
So, will Visa and Mastercard be disrupted by stablecoins? Currently, it's more likely to be an "evolution" rather than a "complete disruption".
History shows that whether mobile wallets or "buy now, pay later" payment methods, they have all triggered "disruption" warnings but ultimately evolved into adaptations and integrations by existing giants. Visa's Forestell points out that while crypto-native users can send funds back and forth, achieving widespread daily use requires "hyper-scale connectivity", which is precisely the best "entry point" that Visa and Mastercard can provide.
Payment giants are leveraging their massive user bases, global merchant networks, strong risk control capabilities, and brand trust to absorb stablecoins into their existing ecosystems, actively investing and adjusting technical architectures. Their goal is to make stablecoins a new "value" form within their existing "channels", rather than a complete replacement.
Therefore, the scenario of stablecoins completely replacing existing card networks "overnight" is unlikely in the short term. However, the pressure from stablecoins will continue to force Visa and Mastercard to make profound strategic adjustments and technological innovations. The future payment landscape will likely be a hybrid ecosystem that integrates traditional infrastructure with blockchain technology, with Visa and Mastercard actively competing to continue playing a core role, but they must adapt and integrate these new "crypto channels" to maintain their leadership in digital payments.
