Jessy, Jinse Finance
Recently, Visa announced an expansion of its stablecoin settlement capabilities, newly supporting Global Dollar (USDG) issued by Paxos, PayPal USD (PYUSD) launched by PayPal, and Euro Coin (EURC) launched by Circle. Meanwhile, Visa has extended the blockchain networks supported for settlement from the original Ethereum and Solana to Stellar and Avalanche, further reinforcing its "multi-chain compatibility" infrastructure.
Visa's move is undoubtedly aimed at consolidating its dominant position in global payment infrastructure while accelerating its transformation to a "chain settlement layer". And it's not just Visa; major payment giants are all accelerating their "chain transformation" along their respective strengths.
Extending the traditional financial clearing network to the chain world
Historically, Visa has been a typical "centralized settlement network" in the traditional financial world, with functions similar to the "decentralized settlement layer" emphasized by blockchain. In the traditional financial world, it is responsible for clearing and settlement between card issuers, acquiring institutions, merchants, and consumers.
In terms of scale, Visa and Mastercard almost dominate the global payment landscape: as of 2024, Visa occupies 39% of the global payment market, while Mastercard accounts for 24%. Their operating profit margins are even more astonishing, reaching 67% and 57% respectively.
As infrastructure in the traditional financial realm, facing the blockchain revolution sweeping through the payment and settlement layer, Visa can only choose to embrace it. After all, blockchain offers faster, disintermediated, and real-time settlement advantages. With the advancement of U.S. stablecoin-related legislation and the gradual expansion of the blockchain world, payment networks are being rebuilt on-chain. If it doesn't embrace this revolution, its future will be marginalized in the on-chain world.
Currently, Visa's expansion of support for various stablecoins and chains is essentially transforming itself from a traditional financial "centralized settlement network" to a multi-chain and multi-method compatible settlement layer. The blockchain world is highly fragmented, with users distributed across different chains like Ethereum, Solana, Stellar, and Avalanche. Mainstream stablecoins also have different ecological positions: USDC is the leader in compliant stablecoins, PYUSD is more PayPal platform-oriented, and EURC is the first compliant euro stablecoin. To become the highway of on-chain payments, Visa must have multi-chain and multi-coin compatibility to cover more transaction scenarios and serve more users and partners.
So what we see now is just the beginning of its gradual expansion of supported chains and stablecoins. In the future, Visa will also connect to more stablecoins and chains.
Payment giants' collective crypto transformation is not limited to issuing stablecoins
Visa is not the only traditional payment giant venturing into the chain world. Mastercard, Stripe, PayPal, and other payment giants are positioning their "on-chain roles" through their respective paths and rhythms. They either choose to become blockchain connectors or directly launch their own stablecoin solutions.
Mastercard was one of the earliest traditional financial institutions to explore crypto infrastructure, and was even more aggressive than Visa at one point. As early as 2021, Mastercard announced plans to support direct settlement of "partial crypto assets" and launched cooperation projects with multiple wallets and exchanges.
In the past two years, Mastercard first launched the "Crypto Credential" system on-chain identity, providing on-chain identity authentication services for wallet addresses, aiming to solve fraud and misdirected transfer issues in on-chain transfers.
Meanwhile, it is also building a multi-chain prototype platform to test the interoperability of various CBDCs, stablecoins, and commercial bank digital currencies, preparing for future large-scale commercial deployment.
Additionally, Mastercard is continuously expanding its crypto ecosystem network, currently collaborating with Fireblocks, Paxos, Circle, and providing infrastructure services in multiple areas such as custody, settlement, and cross-border transfers. It is trying to become the "infrastructure platform" for on-chain settlement and identity authentication.
Payment platform Stripe, similar to providing APIs in the traditional financial world, is doing similar things in the blockchain world, offering a comprehensive service of on-chain payment clearing for merchants and developers. Stripe first announced support for USDC payment in November 2023. Developers can directly receive, convert, and withdraw USDC through Stripe's API, lowering the threshold for Web3 enterprises. Stripe also provides a hosted wallet solution, helping project parties implement on-chain payments and fund management without building their own on-chain infrastructure.
On the other hand, Stripe is further enhancing its conversion capabilities between stablecoins and fiat currencies, trying to become the "crypto payment Stripe" between developers and merchants.
It can be said that Stripe is more like the "merchant backend" in the Web3 world, providing one-stop on-chain payment access, KYC, settlement, and withdrawal services, belonging to the "developer-friendly" on-chain middleware.
Unlike Visa and Mastercard, PayPal chose to issue its own stablecoin. In August 2023, PayPal announced the launch of PYUSD, an Ethereum-based U.S. dollar stablecoin, which is one of the first compliant stablecoins launched by a mainstream payment company, targeting digital payments, transfers, and settlements within the PayPal network. PYUSD can circulate in PayPal and Venmo wallets, and Visa's announcement of supporting PYUSD settlement may mark the coin's transition from an "internal currency" to "widely used on-chain".
Currently, payment giants are entering crypto from their own strengths, some focusing on extending clearing and settlement networks, some concentrating on providing payment access tools for Web3 merchants, and others choosing to issue stablecoins directly. Although their paths differ, their purpose is consistent: to seize the dominant position in on-chain infrastructure.
