Visa adds stablecoin tools for banks and fintechs

Visa is launching a stablecoin platform for banks, fintech companies and payment providers, a sign that dollar-linked crypto tokens are moving deeper into mainstream payments. For retail investors, the takeaway is less about any single coin and more about infrastructure: Visa is giving financial firms a packaged way to use stablecoins inside payment and settlement systems they already rely on.

In a Thursday blog post, Visa said the Visa Stablecoin Platform, or VSP, will let institutions issue, store and transfer stablecoins through its network. Stablecoins are cryptocurrencies designed to keep a steady value, usually by tracking the U.S. dollar.

Visa said the platform combines several functions that would otherwise require separate systems. Those include minting, which means creating new tokens; redemption, which means converting tokens back into regular money; wallet infrastructure for holding tokens; and treasury management, the process companies use to track and move cash and cash-like assets.

The pitch is straightforward: financial firms can add stablecoin operations without building their own blockchain stack from scratch. A blockchain is a shared digital ledger that records transactions across a network of computers. Visa said VSP connects stablecoin activity with existing payment and settlement workflows, where settlement means the final transfer of money between parties.

Jack Forestell, Visa’s chief product and strategy officer, said in the company’s statement that stablecoins are creating a new layer of “programmable money,” while institutions still face practical issues in running that technology. Forestell said Visa is offering clients “a single place to mint, move, and manage stablecoin operations” with the controls, security and network reach they expect from Visa.

What the platform supports

Visa said VSP is entering beta with selected customers before a broader release. The company did not name those initial customers in the announcement.

At launch, the platform supports Open USD, or OUSD, according to Fortune. OUSD was introduced in June by the Open Standard consortium. Fortune also reported that VSP ties into Visa’s existing support for Circle’s USDC and Paxos’ USDG.

The platform lets institutions manage wallets, move funds and connect those wallets to their current treasury and settlement systems, according to Fortune. It also includes transaction approval controls and audit logs, which are records used to track activity for compliance and internal review.

Stablecoins have become one of the biggest practical uses of crypto because they are designed to move like digital tokens while holding a dollar-like value. CoinGecko puts the overall stablecoin market at about $304 billion.

Visa’s bigger stablecoin push

The new platform follows several stablecoin-related moves by Visa. In October, the company published research arguing that stablecoins could bring parts of the $40 trillion global credit market onto blockchain networks. Visa cited more than $670 billion in stablecoin lending over the prior five years.

In March, Visa joined the Canton Network as a Super Validator, a role meant to help banks use stablecoins for payments, settlement and treasury operations on a privacy-focused blockchain network.

In April, Visa expanded its stablecoin settlement program by adding Base, Polygon, Canton, Arc and Tempo. Visa said at the time that the expansion brought its supported blockchain networks to nine. The company also said its annualized stablecoin settlement volume had reached $7 billion and that it supported more than 130 stablecoin-linked card programs in over 50 countries.

Visa’s move does not make stablecoins risk-free, and it does not settle which tokens or networks will win adoption. It does show that one of the world’s largest payments companies sees demand from financial institutions for tools that make stablecoins easier to issue, control and connect to existing money movement systems.

This story draws on original reporting from Decrypt.