Visa and Mastercard align themselves to stablecoin market explosion

As stablecoins edge closer to mainstream adoption, global card giants Mastercard and Visa are striking a careful balance – acknowledging the potential of digital currencies while casting doubt on their imminent threat to traditional payments infrastructure.

Visa and Mastercard align to stablecoin market

The increased likelihood of a US regulatory framework for stablecoins, underpinned by progress in Congress, has triggered a wave of activity across the financial services landscape.

From JP Morgan’s tokenised dollar initiatives to Shopify’s exploration of crypto acceptance, the commercial use case for stablecoins is evolving.

Yet, despite a flurry of institutional interest, stablecoins remain largely confined to crypto trading and investment, rather than day-to-day retail payments.

Hype or Practical Use

Mastercard, in a recent presentation to analysts, was forthright in distinguishing between hype and practical use.

CPO Jorn Lambert noted that 90% of stablecoin transaction volume is linked to crypto trading.

“Stablecoins are not currently a general-purpose payment mechanism,” Lambert said, citing key limitations – such as volatility, liquidity constraints, and the lack of a standardised network – as barriers to their widespread use at the point of sale.

Nevertheless, Mastercard is not standing idle.

The company is actively forging partnerships – such as with crypto exchange OKX, fintech Nuvei, and blockchain firm Paxos – to expand stablecoin functionality in wallets and consumer payments.

Lambert outlined three avenues for Mastercard’s engagement with stablecoins: enabling users to buy and sell them via cards, supporting wallets and banks that facilitate stablecoin usage, and offering business-to-business and cross-border payments solutions.

Mastercard sees its value as a bridge – connecting the emerging stablecoin economy with the fiat-based financial system it already links across 150 currencies.

Raj Seshadri, the company’s Chief Commercial Payments Officer, highlighted the enduring importance of fiat liquidity.

“Businesses gain substantial value from liquidity and working capital,” she said. “Stablecoins currently trap that liquidity, limiting their ability to drive economic growth.”

Infrastructure and Support

Visa is adopting a parallel strategy.

Alongside enabling stablecoin-based purchases and cross-border payments, the firm is providing infrastructure and consulting support to clients exploring digital currency issuance.

These initiatives position both networks as facilitators of innovation, rather than incumbents under threat.

Still, investor sentiment has wavered.

Concerns about regulatory change disrupting card revenues have weighed on share prices.

But analysts remain broadly optimistic.

William Blair argues that entrenched consumer habits, fraud protections, and the absence of a universal stablecoin standard shield the networks from near-term displacement.

Mizuho’s Dan Dolev echoes that view, suggesting any meaningful disruption will be confined to remittances and B2B cross-border flows.

For now, Visa and Mastercard appear less at risk of being disrupted – and more poised to co-opt the crypto evolution for their own strategic gain.