The news: Visa will offer stablecoin settlement in Circle’s USDC for its US network, per a press release.

How we got here: The passage of the GENIUS Act kickstarted payments companies pursuing on-chain solutions for customers. 

Incumbents like Visa and Mastercard are adopting the technology to maintain their relevancy in a potential post-card world as more fintechs hope crypto pushes their operations ahead.

• Mastercard is reportedly closing in on buying Zerohash, a company that provides infrastructure to connect fiat payment systems with crypto.
• And Stripe rolled out Open Issuance, which lets businesses launch their own stablecoins.

Stablecoins can offer near-instant settlements, outstripping traditional rails that can take up to three days to settle (though newer rails like FedNow or RTP are also instant). 

Our take: Visa and Mastercard are investing in crypto to preserve their dominance in the US payment ecosystem. 

Crypto-based payments have been slow to catch on in the US—we forecast just 1.8% of US adults will transact with crypto this year. It’s unclear which components of crypto will enter the mainstream, so a strategy like Visa’s, where it invests in everything from stablecoin-issuing sandboxes and crypto settlement to cards that transact over traditional rails but pay out rewards in crypto, could position it to maintain its edge wherever crypto catches on.