Crypto will continue to be based on the USD. The entry of the major players is guaranteeing this.

It is a view I held for a while. There is no demise of the US dollar. In fact, the upcoming crypto expansion is only solidifying it as the global currency (at least in denomination). The network effects will only continue to grow, making it impossible to catch.

Visa is one of the traditional financial institutions. It is a centerpiece of the existing global financial system. Like many other firms, it is making the move into crypto.

While I expect a Visa stablecoin at some point, the most recent announcement could have even broader implications.

It is a move that will advance on-chain financial activity as existing firms transition into the new realm.

Visa Pushing USD Stablecoin On-Chain Adoption

So what is Visa up to? According to a report, it is looking to advise different financial entities in its path into blockchain activity.

Visa launched a global Stablecoins Advisory Practice, a unit that will help banks, merchants and fintechs design, roll out and manage stablecoin products.

Notice the entities it is targeting. These are some of the largest players in the financial sector.

The payments giant said Monday that the new advisory arm will focus on practical questions that traditional players struggle with, and offer stablecoin training and market trends programs, go-to-market planning and technology enablement for stablecoin integration.

Financial institutions are not focused on the likes of Bitcoin. While they will offer likely move into swapping of crypto-assets, the financial system is being redesigned around stablecoins. This is where the major players are gravitating.

The move indicates that onchain dollars are now significant enough to warrant their own dedicated business line within one of the world’s largest payment networks, and it’s not a greenfield bet.

With the Stablecoins Advisory Practice, Visa is wrapping a consultancy around infrastructure it has been building out quietly for several years, including more than 130 stablecoin‑linked card programs across 40‑plus countries and billions of dollars in annualized USDC (USDC) settlement volume on its network.

Basically, the global payment system is enormous. Trillions of dollars in payments are moved across different networks. This is a number that is likely to keep growing, especially as AI becomes a larger part of the economy.

Financial Basics

One thing we can say is the financial system has the basics covered. When it comes to modern banking, everything is provided. While we can question the integrity of bankers, the services provided are clear.

This is not speculation. Naturally, there are many who engage in that but that is a different sector of the financial services package. Market activity is also gigantic. However, it is not the basis of the financial world.

Here we see where something like Bitcoin is not of interest. BTC is not a medium of exchange. There is value in trading which is appealing to many. We also are seeing companies start to believe in the long-term appreciation of the asset.

Again, this is not what companies like Visa deal in.

The timing aligns with a broader shift in how mainstream companies approach cryptocurrency. Stablecoins, rather than volatile assets like Bitcoin (BTC), are becoming the default method for using blockchains for payments.

Source

A stablecoin is necessary for all aspects of finance. If we are going to see transactions moved from private networks to blockchains, payment rails are vital. Even BTC has a link to stablecoins since something is used to purchase the asset. Certainly, one could swap ETH or any other digital assets but my guess is that most purchases are done with either USDT or USDC.

This will only grow as banks enter the arena, probably offering up their own stablecoin.

Then we have lending. Loans are not going to pay out in BTC. This might be the collateral that is used. However, a stablecoin will be what the borrower receives. It is no different than how loans are structured today.

Crypto lending is in its embryotic state. It is something that will grow as infrastructure is laid.

The foundation is being built. As Visa lures more companies in, things will only accelerate. It is a flywheel that cannot help but to grow.

Posted Using INLEO