Visa is answering payments ecosystem demand for stablecoin advice by spooling up advisory services on strategies for use of those digital assets.
The card network behemoth has heard from clients eager for input on how to use the digital assets so it’s begun offering its counsel, even as it foresees fewer consumer use cases for stablecoins in the U.S., Visa CEO Ryan McInerney said during an earnings report webcast Thursday.
A spokesperson for Visa said the company began offering the stablecoin advisory services last month.
“As demand has grown among both stablecoin native, and more traditional clients, we're finding that more and more participants in the payments ecosystem – financial institutions, merchants, acquirers and consumer-facing technology companies – are looking to develop and refine their stablecoin strategy,” McInerney explained.
As part of its fiscal first quarter earnings press release, the San Francisco-based company reported issuing cards that have stablecoin capabilities in nine more countries during the quarter, for a total worldwide of about 50 countries. In addition, Visa stablecoin settlement services offered to corporate clients now has an annualized run rate of about $4.6 billion worldwide, the CEO said.
While that run rate is relatively “small,” the global addressable cross-border market is a giant $20 trillion opportunity for Visa, analysts at the financial firm William Blair said in a note to clients Friday regarding Visa’s earnings.
The company has set its sights on building a “secure and seamless interoperable layer between stablecoins and traditional fiat payments,” the CEO said.
Some industry analysts have pointed to stablecoins as a potential threat to established payments players, such as Visa, especially now that the Genius Act signed into law by President Donald Trump last year will create an infrastructure for such digital assets. They are seen as possible alternatives for consumers less inclined, for a variety of reasons, to participate in the traditional banking realm.
William Blair analysts view Visa’s stablecoin strategy, including providing ways to convert money into and and out of stablecoins, as more “more sophisticated” than that of its smaller competitor Mastercard, which they said has focused on cross-border use cases.
“Visa has a more holistic stablecoin vision, building infrastructure, on-ramps, off-ramps, and settlement,” the William Blair analysts said in their note.
Nonetheless, McInerney doesn’t consider it likely that stablecoins will be much used by consumers in the U.S. for payments despite the new law ushering in more use cases. As he has said before, McInerney expects there to be more opportunity for Visa with respect to stablecoin use in countries with heavy currency volatility or less access to U.S. dollars. He also expects stablecoins could bolster Visa’s cross-border payments services.
“We don't see a lot of product market fit for stablecoin payments and consumer payments in digitally developed markets,” McInerney said, pointing to the U.S., U.K. and Europe. “In the U.S., if a consumer wants to pay for something using a digital dollar, they have ample ways to do that,” he said, noting they can do so through checking and savings accounts.
Nonetheless, McInerney is pushing his company to capitalize on the digital assets in markets around the world. “Stablecoin opportunity remains additive to what Visa is doing today, and we will continue to invest where we see the greatest demand,” the CEO contended.
For the first quarter ended Dec. 31, Visa’s net income rose 14% over the year-earlier period to $5.85 billion as revenue climbed 15% to $10.9 billion.
