Visa is not concerned about stablecoin weakening the traditional payment system but sees it as a development opportunity. Stablecoin primarily serves large-value transactions and is prevalent in emerging markets, where the demand for US dollars is highest but the supply is limited.
According to Cuy Sheffield, Visa's cryptocurrency business director, stablecoin has not yet solved many issues in retail payments. Data shows that most stablecoin transactions are large-value transfers rather than small daily transactions.
- Stablecoin does not threaten traditional payment companies but is seen as a cooperation opportunity.
- Most stablecoin transactions are large money transfers, not retail payments.
- Stablecoin has strong development potential in emerging markets needing access to US dollars.
How does Visa assess the impact of stablecoin on the traditional payment system?
Cuy Sheffield, head of Visa's cryptocurrency division, affirms that stablecoin does not pose a danger to traditional payment companies but is a new opportunity. According to him, the development of stablecoin opens up additional payment methods for consumers, not limited to credit cards.
He also points out that the retail payment market has not yet been dominated by stablecoin because most transactions involve large amounts, focusing on transfers rather than small goods and service payments. This indicates that stablecoin's role is not yet widespread in common consumer payments.
Stablecoin is not a threat but a new addition that helps expand the scope of digital payments.
Cuy Sheffield, Visa's Cryptocurrency Business Director, 27/7/2024
Why are stablecoins primarily used for large-value transactions instead of retail payments?
Data shows that most stablecoin trading volume comes from high-value transfer amounts. This reflects stablecoin's focus on transactions that are not daily shopping payments like in retail.
Stablecoin is designed to easily transfer money across borders and maintain price stability, suitable for large transactions, helping to reduce price volatility risks compared to other tokens. This is also why stablecoin has not yet replaced traditional payment forms in small transactions.
In which markets do stablecoins have development potential and why?
Visa reveals that the group of markets with the largest stablecoin development opportunities are emerging economies outside the US, where the demand for US dollars is highest but access channels are limited.
In these places, individuals and businesses often face difficulties accessing US dollars due to financial infrastructure limitations or capital control regulations. Stablecoin provides a more convenient solution, helping to convert and maintain stable currency prices, supporting international business and transactions effectively.
Stablecoin is an important digital financial solution for developing economies needing flexible access to US dollars.
Cuy Sheffield, Visa's Cryptocurrency Division Director, 27/7/2024
Frequently Asked Questions
Does stablecoin threaten the traditional payment industry?
According to Visa's expert, stablecoin is currently a complementary development opportunity, not replacing or threatening traditional payment companies.
Why is stablecoin rarely used for small payments?
Most stablecoin transactions are large-value money transfers, not suitable for retail payments due to technical characteristics and usage purposes.
Which markets have the highest stablecoin usage demand?
Emerging markets outside the US, where users need US dollars but are limited by traditional currency access channels, have great stablecoin usage potential.
What payment issues can stablecoin improve in cross-border transactions?
Stablecoin helps minimize price volatility risks and high transaction fees, accelerating cross-border money transfers more effectively.
What are Visa's plans for stablecoin in the future?
Visa sees stablecoin as an opportunity to expand digital payment services and will develop more integrated solutions in the digital financial ecosystem.
