Visa and Stripe are making stable coins, not payments

By Mr. Liu Honglin

 

And communicate with a friend doing cross-border payments。

He's been in the industry for years, and the company's been doing well. When he talked about the stabilization coin, he asked me a very direct question:

“Many lines are already cheap and fast, like air clouds and even these cross-border payment companies. Why do firms need a stable currency? What exactly did the stabilization coin solve?"

This is actually a better problem than many industry meetings。

Because it is not conceptually based, nor monetary narratives, but based on real business needs. Enterprises do not replace their payment systems because a technical term is good. The real concern of the enterprise is whether the money is available, how long it will be available, and how much it will cost. The bank will ask whether the taxes will explain whether the accountancy can be recorded and whether there are regulatory problems。

These issues may be much more important than the concept of “decentreization”。

It's not necessary

If an enterprise makes formal cross-border payments between Singapore, Hong Kong, the United States, the United Kingdom and Australia, has bank accounts on both sides, payment agencies have a local clearing network, foreign exchange costs are low enough and compliance information is complete, then traditional payment options are likely to be sufficient。

This is also why the founders of the Aerial Cloud Pool had previously expressed doubts about the use of stable currencies for cross-border payments in major G-10 currencies: if some mature currency cross-border routes are close to real time, at a cost of 0.01%, stable currencies are not natural and faster, nor natural and cheaper。

This view does not necessarily cover all the scenes, but it is clearly true。

When many talk about the stabilization currency, it is easy to equate the “low-cost chain transfer” directly with the “low-cost cross-border payments by enterprises”. Much less is included in this: the cost of the money, the cost of the money, the cost of foreign exchange, the cost of wallets and hosting, the cost of compliance review, the cost of tax and accounting processing, the stability of bank accounts, and the cost of interpretation once the source of funds is sought。

If the recipient ultimately has to account for the euro, the United States dollar and the Hong Kong currency, and the enterprise ' s finances are ultimately to be accounted for and audited in a bank account, then the stabilization currency is simply a chain transfer of a certain part of the middle and does not automatically mean that the entire path is less costly。

Stabilizing coins are not a hammer, and all cross-border financial problems cannot be seen as nails。

In turn, however, the conclusion that “stabilized currency has no meaning” cannot be drawn because some routes in mature markets are good enough。

The global payment system is not the only mature routes of the United States dollar, the euro, the Hong Kong dollar and the Singapore dollar. We have lived in the interior of China for a long time and can easily create a misunderstanding that the issue of payments has been resolved. Wisdom, payment treasures, money unions, banking applications cover almost all aspects of everyday life. For many Chinese, the flow of money seems natural to be low-cost, immediate and convenient。

But by placing a global perspective, it is only a few market experiences。

According to the World Bank remittance price database, the average global cost of remittances remained 6.36 per cent of the value of remittances as of the third quarter of 2025. This, of course, is an individual small-scale remittance calibre that is not equivalent to cross-border payments by all enterprises, but it is a basic fact that the friction of global financial flows remains enormous today。

Bank accounts in many regions are not universal and United States dollar accounts are more difficult to obtain. Local currency instability, slow and expensive cross-border remittances, and small and medium-sized businesses are faced with restrictions on the number of working days of correspondent banks, intermediary banks, foreign exchange swaps, prepaid pools, compliance reviews and banks for international trade. Too often, a single sum of money is not impossible, but the entire financial chain is too long, too slow and too uncontrolled。

So the easiest thing to ignore when it comes to stabilizing currencies is to mix “payment” with “liquidation”。

The average user understands the payment, which I am making, swipe, transfer and pay. It looks simple at the front end. But the truly complex part of the financial system is often behind. A cross-border payment, from the payer to the payee, may involve issuing bank, receipt bank, payment network, correspondent bank, intermediary bank, local clearing system, foreign exchange exchange, anti-money-laundering review and sanctions screening。

The front-end display of “payment success” does not mean that the back-office funds have been finalized. Slow, expensive and complex, often not a payment move but a liquidation process。

This is a map that can be seen more directly, with at least four layers of cross-border payments。

Where there is value in stabilizing the currency, it is mainly on the second and third floors。

IT'S NOT FOR EVERYONE TO TAKE USDC TO A CONVENIENCE STORE TOMORROW TO BUY COFFEE, OR FOR MERCHANTS TO REPORT TAXES ON USDT IMMEDIATELY. IT CHANGES: CAPITAL FLOWS THAT WOULD OTHERWISE HAVE REQUIRED CROSS-BANKING, CROSS-JURISDICTIONAL, AND CROSS-HOUR COORDINATION HAVE THE OPPORTUNITY TO BE PART OF A 7X24-HOUR CHAIN-BASED ASSET TRANSFER SYSTEM。

It's not sexy, but it's crucial。

Visa, it's not coffee

If the stabilizer is just a self-recreation within the circle, there is no need for Visa to get involved。

Visa is one of the most sophisticated payment networks in the world. It lacks concepts, flows and traditional financial partners. It was willing to enter into its own settlement system, suggesting that it was no longer just a tool for encrypting asset transactions but was beginning to touch the core of traditional payment networks。

In September 2023, Visa announced the expansion of the USDC stabilization currency clearing capacity to support the Solana block chain and to work with large collection agencies such as Worldpay and Nuvei to test stabilization currency settlement. In its bulletin, Visa defined the matter as “modernized cross-border financial flows”。

Attention, Visa didn't do it at the time, "Let consumers buy directly from USDC."。

It's settled。

Visa officially disclosed that, in the pilot, Visa had moved millions of dollars of USDC between partners through Solana and Etheum to settle the authorized monetary payments on VisaNet. In other words, the front end can still be paid for in the ordinary card, and the settlement between certain institutions at the back end can be done with USDC。

By December 2025, Visa had also announced the introduction of USDC settlement capacity in the United States, allowing United States issuers and receiving a unilateral version of USDC with Visa. At that time, Visa disclosed that, as at 30 November 2025, its stable currency settlement monthly scale had exceeded the annualized performance level of $3.5 billion and highlighted a very specific benefit: the clearing window could be expanded from the traditional five working days to seven days。

By April 2026, Visa had continued to expand the pilot, announcing that its Global Stability Currency Clearing Pilot had supported nine block chains, with annualized settlements running on a scale of $7 billion。

$7 billion sounds big, but it's still very small in Visa's entire network. Visa 2025 Total payments and cash transactions disclosed for the fiscal year were $17 trillion in volume。

So it's not about the stabilization currency that has been transformed today。

The point is: why did Visa start putting it in the settlement。

Because Visa's moat is never just "swipe." It is more like a global network of financial collaborations, linking issuers, billboards, merchants, payment service providers and consumers, providing transaction rules, wind control systems, dispute resolution, enabling networks and clearing capacity。

So Visa is not interested in whether users can buy a coffee from USDC in the future。

It was concerned that, if future global liquidity were to be increasingly linked to stable currencies and block chains, would Visa remain in a critical position in the new clearing network。

And that's why Visa does stable currency settlements, not simple encrypted payments。

This distinction is important。

When many people look at "Visa + stabilization coins," what they imagine is that consumers pay directly for USDC, and businesses receive USDC directly。

In reality, the business path is: the user front still uses familiar wallets, bank cards or financial technology applications; the back end of the business still receives the United States dollar, the euro or local French currency; the middle is the completion of the chain transfer, the exchange of French currency, the bookkeeping and compliance review by the payment network, the stabilizer, the cooperative bank, the billing agency, the exchange service provider and the compliance service provider。

FOR EXAMPLE, A EUROPEAN USER HOLDS USDC AND MAKES PAYMENTS TO UNITED STATES MERCHANTS THROUGH A COMPLIANCE WALLET OR A STABLE CURRENCY LINK CARD. THE FRONT-END EXPERIENCE MAY BE SIMILAR TO THE NORMAL BRUSH CARD. NOR DOES THE MERCHANT WISH TO SUDDENLY ADD A LARGE NUMBER OF USDCS TO ITS BALANCE SHEET, AND IT WOULD PREFER TO RECEIVE THE UNITED STATES DOLLAR BECAUSE IT WOULD HAVE TO ACCOUNT FOR IT IN UNITED STATES DOLLARS, PAY TAXES, PAY SALARIES AND PURCHASE IT。

AS A RESULT, USDC COULD BE MOVED TO THE UNITED STATES COOPERATION AGENCY IN THE CHAIN, WHERE THE DOLLAR EXCHANGE WOULD BE COMPLETED BY THE LOCAL COOPERATIVE BANK OR THE LICENSED AGENCY AND THE FINAL SETTLEMENT WOULD BE MADE TO THE BUSINESS。

Businesses still receive United States dollars. However, the cross-border segment was no longer entirely dependent on the transfer of the traditional banking system。

What is changed is the middle level of liquidation。

Why does this change matter

BECAUSE IN THE PAST THE GLOBAL DOLLAR SYSTEM WAS ESSENTIALLY BASED ON THE BANK ACCOUNT SYSTEM. THE CROSS-BORDER MOVEMENT OF THE UNITED STATES DOLLAR IS HIGHLY DEPENDENT ON COMMERCIAL BANK ACCOUNTS, CORRESPONDENT BANK NETWORKS, SWIFT CORRESPONDENCE, CLEARING ACCOUNTS AND BANK HOURS. THE SYSTEM IS VERY POWERFUL AND MATURE, BUT IT IS NOT DESIGNED FOR SMALL, HIGH-FREQUENCY, GLOBAL REAL-TIME FINANCIAL FLOWS IN THE INTERNET AGE。

The change brought about by the currency stabilization is the first time that United States dollar assets can be transferred globally in real time in the form of Internet assets。

The interpretation of this sentence is important。

USDC, USDT are not central bank currency issued by the Fed, nor are they bank deposits. In the case of USDC, for example, it is officially emphasized that USDC is 100 per cent supported by highly liquid cash and cash equivalents and can redeem the dollar at 1:1; most of its reserves are invested in the Circle Reserve Fund, a government money market fund managed by Blackrock and registered with the United States Securities and Exchange Commission。

THEREFORE, USDC IS NOT A “REAL DOLLAR”, BUT RATHER A CERTIFICATE OF A DOLLAR CLAIM IN A CHAIN SUPPORTED BY RESERVE ASSETS AND PROMISED TO BE REDEEMED AT 1:1. HOWEVER, IT IS UNIQUE IN THAT THIS CLAIM DOCUMENT CAN FLOW IN REAL TIME ALONG THE CHAIN。

FROM THIS POINT OF VIEW, SUCH COMPLIANT AND STABLE CURRENCIES ARE, IN ESSENCE, CLOSER TO AN “INTERNETIZED UNITED STATES DOLLAR IMF SHARE”. BEHIND THEM ARE SHORT-TERM UNITED STATES DEBT, CASH, TRUST ACCOUNTS, FORECLOSURE MECHANISMS AND COMPLIANCE DISCLOSURES; THE FRONT END IS A DIGITAL DOLLAR THAT FLOWS ALONG THE BLOCK CHAIN。

And that's the key to the Circle business model。

Circle is not a stable currency giant by “transfer fees”. The Coin Metrics analysis of the Circe listing documents shows that in 2024, Circle earned approximately $1.7 billion, of which 99 per cent came from interest income from the USDC reserve; at the same time, it paid about $101 billion in distribution costs to distribution partners such as Coinbase and Binance。

This is an interesting set of data. It illustrates the nature of Circle, not just a block chain technology company, but a financial infrastructure company that Internetizes, productizes and distributes the dollar assets. The larger the circulation, the higher the reserve assets, the higher the interest income. However, the expansion of USDC is heavily dependent on exchanges, wallets, payment networks, banks, businesses and various eco-partners, so that Circe will have to allocate considerable revenues to distribution channels。

That explains why Circle needs Visa。

Circe has a digital dollar, but no global business acceptance network like Visa. Visa has a global payment network, but no dollar assets in its own mainstream chain. So they are not simply competitive relationships, but complementary。

Circe solves "Where does the dollar come from in the chain." Visa addresses “How the dollar in the chain enters the real world”. One is in charge of assets, one is in charge of networks; one is in charge of distribution and foreclosure, one is in charge of connecting the issuer, single bank and business; one is in charge of placing the dollar in the chain and one is in charge of returning the dollar in the chain to the traditional financial system。

Stripe and PayPal

Stripe's acquisition Bridge is also completing the same puzzle。

Stripe is one of the world's most important Internet payment infrastructure companies. In February 2025, Stripe announced the completion of the acquisition of Bridge, the firm for the stabilization currency infrastructure. Bridge is directly located: it provides an end-to-end platform for enterprises to receive, store, convert, issue and spend stable currency。

Stripe, why did you buy Bridge

Because Internet commerce is becoming more global. The creators, developers, merchants, platforms, AI smarts, cross-border service providers need faster, cheaper and more flexible ways of global financial flows. Stripe can't just stand next to it if it starts to become a new kind of clearing tool。

PayPal launched PYUSD is a similar logic. In August 2023, PayPal introduced the United States dollar stabilization currency PYUSD, making it clear that PYUSD, supported by dollar deposits, short-term United States Treasury bonds and similar cash equivalents, could redeem the dollar at 1:1。

Why are all these companies moving in the direction of stabilization money? It's not because they suddenly believe in money-cycle idealism. Rather, they see a realistic trend: the future of a global payment network may evolve from a “bank card network + bank account network” to a hybrid “traditional account network + stable currency clearing network”。

That is why I believe that the stabilization currency deserves careful study. It is not because it is sexy, but because it cuts into a very specific problem in the global financial system: money flows globally, still too slow, too expensive and too fragmented。

Risk isn't just the chain

Of course, the risk of currency stabilization cannot be ignored. The Bank for International Settlements, in its annual economic report for 2025, has shown restraint in its approach to currency stabilization: It recognized the potential of a stable currency in the direction of monetization, noted that it had been used for encrypted assets and that some emerging market cross-border payment scenarios that lacked access to the dollar, but stressed that, given the unity, flexibility and integrity of the monetary system, it could not be the backbone of the future monetary system。

In 2023, the Financial Stability Council issued recommendations for the regulation of the global currency of stability, which also emphasized the need for consistent and effective regulation, supervision and cross-border coordination of the global currency of stability arrangements to address the risks to financial stability that they may pose。

What does that mean? It states that once a stable currency enters the global clearing infrastructure, it is no longer simply a technical issue, but rather a financial regulation issue, a monetary sovereignty issue, an anti-money-laundering issue, a sanctions compliance issue, a reserve asset management issue and a cross-border collaboration issue。

In the narratives of currency circles, the currency of stability is often referred to as a “bank bypass”. But in the business path of the companies Visa, Stripe, PayPal, the stabilization money is not intended to circumvent regulation, but rather to be entered into regulation. Many Chinese entrepreneurs understand the stabilization currency as “a circumvention of regulation”. But Visa understands the stabilization currency as “upgrading liquidation”。

These two logics are completely different。

This is also where Chinese enterprises need particular attention。

In China's native language, the currency of stability cannot simply be understood as “a better cross-border payment tool”。

In 2021, 10 departments, including the People ' s Bank of China, issued a circular on further protection against and disposal of risks associated with virtual currency transactions. (No. 237), it is clear that virtual currency does not have the same legal status as legal currency, is not legal and should not and cannot be used in the market as money; it is an illegal financial activity to carry out operations such as legal and virtual currency conversion, virtual currency conversion, information intermediation and pricing services for virtual currency transactions。

On 6 February 2026, eight departments, namely, the People ' s Bank of China, the National Development and Reform Commission, the Ministry of Industry, CDU, the Ministry of Public Security, the General Directorate of Market Supervision, the General Directorate of Financial Supervision, the CSR, the Foreign Exchange Authority and others, issued a circular on further prevention and disposal of risks associated with virtual currency. (42) Continue to make it clear that virtual currency-related operations are illegal financial activities and are strictly prohibited in the country; and make more specific regulatory arrangements for the stabilization of the renminbi, the issuance of virtual currency by subjects in the country and its control abroad, and the monetization of real world assets。

So for Chinese companies, Visa, Stripe, PayPal are making stabilization coins, so we simply conclude that we can also collect payments in stable currencies。

I usually suggest that companies ask themselves three questions about the use of a stable currency。

The first question is where the business is。

IF THE MAIN SUBJECTS IN THE INTERIOR OF CHINA ARE IN CHINA, BUSINESS, CLIENTS, EMPLOYEES, SUPPLIERS, REVENUES AND EXPENDITURES, THEN STABLE CURRENCY PAYMENTS ARE UNNECESSARY AND SHOULD NOT BE TOUCHED. THE SO-CALLED USDT RECEIPTS, STABLE CURRENCY PAYMENTS AND CHAIN POOLS CAN POSE HIGH RISKS UNDER THE EXISTING REGULATORY FRAMEWORK。

The second question, where's the trading scene。

If an enterprise already has an offshore entity, an offshore customer, an offshore team, an offshore supplier, and the business takes place in a jurisdiction that permits the use of a stable currency, then the stability currency can be studied as a financial instrument. But this does not mean that companies can collect or exchange their own currency. It still needs to be closed through local holders, bank accounts, tax treatment and accounting systems。

The third question is, what exactly does the stabilization currency solve。

If traditional payment schemes are already cheap, fast and stable enough, there is no need to stabilize currencies in order to stabilize them. But if businesses are faced with global freelance payments, small high-frequency cross-border settlements, chain operations, no bank account users, and hard-to-reach markets for the dollar, then a stable currency can really produce value。

This is a closer judgment to reality。

Encryption is traditional financializing

A stable currency system of value in the future is probably not a “de-banking finance” completely out of the banking system。

Instead, it will increasingly resemble a hybrid structure: front-end users will still use familiar wallets, bank cards, payment tools; back-end traders will still receive French currency; and middle-end cross-border clearance networks will increasingly be carried out by stable currencies, block chains, banks, payment networks。

This is also the most interesting place for Visa and Circle to work together。

It's not telling us that traditional finance is being wiped out by encrypted finance. On the contrary, it tells us that traditional finance is absorbing encrypted finance。

The stabilization currency is being transformed from an internal trading medium into a new liquidation module in the global payment network. This doesn't happen overnight. It will not happen simultaneously in all countries and in all scenarios. But the direction is becoming clearer。

This could be the real meaning of a stable currency。