When buy now, pay later giant Klarna said two weeks ago that it’s testing a stablecoin, the firm joined a growing roster of payments processors, card networks, banks and other financial technology companies embracing such digital assets.
More major payments players are leading their customers to stablecoins as the form of digital currency becomes increasingly popular. That’s partly due to the Genius Act, which called for a regulatory framework for stablecoin use, after President Donald Trump signed the bill into law earlier this year.
Stablecoins are a type of cryptocurrency tied to the value of a fiat currency, such as the dollar or the euro, which theoretically makes their value more stable when compared to volatile cryptocurrencies like Bitcoin.
PayPal Holdings was an early adopter, having introduced a stablecoin in 2023. But this year card networks Visa and Mastercard, along with payment processing juggernaut Stripe and its competitor Fiserv, all announced that they would introduce a stablecoin or partner with a crypto company to let their customers use one.
Meanwhile, the use of stablecoins is on a steady incline. The number of stablecoins in circulation had skyrocketed to about 273 billion as of September, up from 2.6 billion in September 2019, according to statistics from Visa, the biggest U.S. card network.
The digital assets are frequently discussed as a way to simplify the movement of money between two countries and reduce the cost of such transactions, but payment executives say stablecoins also have other practical applications, including facilitating transactions outside of normal banking hours.
Visa
Visa has made multiple moves into the stablecoin space this year. Much of its activity involves international payments and crypto payments in other regions of the world, such as Latin America. The company has an eye toward making those transactions faster and less expensive.
The card network announced in May that it would partner with the Stripe-owned stablecoin infrastructure company Bridge to let card holders spend stablecoins in several Latin American countries where Visa is accepted.
And the card network said last month that it would accelerate a pilot program that allows businesses using the money transfer service Visa Direct to send payments directly to a recipient’s stablecoin wallet.
Under the pilot program, Visa Direct gives financial institutions and remittance providers the option to use pre-funded stablecoins to make cross-border payments.
Fiserv
Fiserv has announced multiple initiatives involving stablecoins this year, and a company executive says those moves involve domestic payments, making the company something of an outlier among its peers.
The firm’s digital assets are intended to be traded between banks.
The Milwaukee-based payment processor revealed in June that it would launch its own stablecoin and add the digital asset to its banking and payments infrastructure by year-end.
Fiserv said in a June 23 news release that the stablecoin, which it calls FIUSD, can be used by its customers at no additional cost, to use stablecoin platforms offered by Paxos Trust and Circle Internet Group. The company announced in October that it would partner with the Bank of North Dakota to the Roughrider stablecoin.
Stablecoins could speed the movement of money between banks by enabling after-hours transactions, Fiserv’s head of embedded finance and digital assets, Sunil Sachdev, said in an October interview.
Mastercard
Mastercard has several partnerships with crypto-focused companies that let some cardholders use stablecoins for purchases. The company said in a June press release that 3.5 million of its cards in circulation can engage with crypto in some form.
The Purchase, New York-based credit card behemoth announcement in June that it would join the Paxos Global Dollar network to allow the use of existing stablecoins across its network.
Two months later, the card network unveiled a similar move that encompassed payments abroad.
The company announced in May that it would work with Circle Internet Group to allow merchant acquirers in Eastern Europe, the Middle East and East Africa to settle transactions with the USDC and EURC stablecoins.
Stripe
Stripe is another payment player looking to the cryptocurrency to save money and expand its customer base, even if it is engaging with crypto in a more limited way compared to some of its competitors.
The payment processing giant said in October that it would begin letting customers pay for subscriptions with stablecoins.
Customers could use crypto wallets to pay monthly subscription bills, although the transactions will ultimately be settled by converting the digital currencies into a fiat currency, the company said in an Oct. 14 news release.
The move will save the company money and attract more tech-forward users, the release said.
Klarna
Like Fiserv, Klarna is getting into the crypto game by introducing a digital asset of its own.
The company announced on Nov. 25 that it was testing a stablecoin, KlarnaUSD, which it plans to launch publicly next year.
London-based Klarna is still in the early stages of exploring use cases for the digital asset, a spokesperson said in an email last week.
One of those use cases is reducing the cost of international payments within Klarna, the spokesperson said.
The move is all the more notable considering that Klarna CEO Sebastian Siemiatkowski expressed concern in 2021 about young people investing in cryptocurrency.
