Source: Sam Broner, a16z crypto partner; Translated by: AIMan@黄金财经
We have previously pointed out that stablecoins will eat up the payment market, and many of the world's largest payment companies have taken notice of this this month.
In the past six weeks alone: USDC issuer Circle has filed to go public on the New York Stock Exchange; Coinbase has entered the agent payment space and developed a stablecoin API payment standard; Visa and Mastercard have enhanced their support for stablecoins; Stripe has announced stablecoin financial account balances, programmable stablecoins, stablecoin-backed bank cards, and more.
The thread through all of these announcements is to meet user needs, which can be thought of as a Skype moment in the payment space. What I mean is: in 2003, Skype launched their first killer feature, the ability to make low-cost calls from a computer to a landline. But as more and more people joined the digital calling network, they were finally able to give up their phone calls and switch to Internet-based WhatsApp calls, which heralded a seamless transition of the underlying technology from landlines to mobile operators to Internet-based voice and data connections.
Similarly, connecting stablecoins to traditional systems will help more people interact with stablecoins directly, even if they need to rely on traditional payment companies to build backward compatibility into existing products. As more people and businesses adopt stablecoins using existing products, there will be more opportunities for stablecoins to be used in new or better blockchain-based products - such as self-custody, shopping, remittances, using DeFi, and more.
Here’s a timeline of our announcements over the past six weeks, how they fit into the bigger picture, and why they matter…
May 7th & 8th:
Stripe announced the launch of Stablecoin Financial Accounts, allowing enterprise users to hold stablecoin account balances in 101 countries. They also announced the launch of USDB - a programmable stablecoin that allows developers to embed digital dollars into their apps (and reward them for building on USDB).
Stripe is building adoption incentives directly into the stablecoin layer to increase adoption and own more of the stack. By launching stablecoin financial accounts, Stripe can skip the slow and expensive correspondent banking maze, cut out payment networks, and compete directly with banks and card networks. Stablecoin financial accounts allow Stripe to support users in 101 countries, up from 46 countries previously. USDB will likely become the default stablecoin for Stripe products, giving them more ways to monetize payments. These launches will allow Stripe to offer cheaper, more customizable, more widely available, and more profitable products using neutral blockchain rails instead of card networks.
May 7: MoneyGram, the world’s leading offline payments network, announces the launch of MoneyGram Ramps, a programmable stablecoin on-ramp that enables cash deposits and withdrawals in over 170 countries.
Why it matters: Stablecoins have found product-market fit in emerging markets, where remittances are a driver of early adoption. Yet it’s surprisingly difficult to convert between stablecoins and physical cash, which remains a widely accepted alternative in most markets. MoneyGram’s global cash network provides another way for stablecoins to interact with everyday purchases and spending.
May 6: Coinbase announces x402, a new standard for internet-native stablecoin payments designed to enable atomic transactions between APIs, applications, and AI agents.
Did you know Visa can’t process payments below a penny? Proxy commerce, where autonomous software agents execute transactions on behalf of users, requires programmable money to allow agents to make purchases and spend on our behalf.
Stripe, Visa, and others are exploring their own proxy commerce layer solutions. Stablecoins are an attractive option because they’re built on a trusted neutral, decentralized platform. And because decentralized protocols don’t charge withdrawal fees, stablecoins are likely to have the lowest fees in the long term. The “x402” standard combines stablecoin settlement, intent-based payments, and compliance into a single specification — laying down tracks that Visa and SWIFT can’t match in terms of speed, composability, or programmability.
May 6: Visa and BVNK announce strategic partnership. Visa’s partnership with BVNK can be interpreted as a bet on stablecoin “plumbing” — giving the card network direct access to payment rails that might otherwise bypass it. By partnering with BVNK, a stablecoin payments infrastructure firm, Visa can hedge against the risk posed by Stripe’s growing stablecoin payments product suite.
Visa is being smart here: anticipate other incumbent payments companies to follow suit, or risk stealing the future from dominant stablecoin payments platforms and startups.
April 28 and 30:Mastercard and Visa announce products that allow consumers to use stablecoin balances for everyday purchases by swiping their cards.
On April 28, Mastercard announced partnerships with Circle, OKX, Paxos, and multiple exchanges and wallets to enable broader stablecoin integration. These updates allow consumers to spend linked stablecoin balances using Mastercard. In addition, merchants can also settle fiat card payments into USDC.
Two days later, Visa and Stripe-backed Bridge announced that fintech developers built on Bridge will be able to issue Visa cards pegged to stablecoins, allowing users to pay with pegged stablecoin balances at fiat points of sale through the Visa network.
Both products can help increase the adoption of stablecoins by integrating with the systems people use every day. Cardholders can save and spend directly with stablecoins without having to worry about whether merchants accept stablecoins; when merchants don’t support stablecoins, they can simply use the attached Visa or Mastercard card.
Stablecoin-pegged cards are backwards compatible with existing infrastructure, but it will be the “strong form” of the technology that will win out. Ultimately, merchants prefer to avoid the 2.5% card swipe fee. But in the future, stablecoin payments may be used directly at the point of sale, helping businesses to make higher profits. In the meantime, entrepreneurs will continue to develop new products to make stablecoins a more desirable option.
Meanwhile, Stripe announced a partnership with financial operations platform Ramp to launch stablecoin-backed cards starting in Latin America to create more ways for users to spend.
April 23: PayPal announced that starting in 2025, U.S. users will earn a 3.7% yield on PYUSD held in their PayPal or Venmo accounts.
PayPal wants users to deposit money—even if they use MetaMask. By offering a 3.7% yield on PYUSD in Venmo or PayPal accounts, PayPal is incentivizing users to buy and hold the stablecoin in-app. But PayPal's yield is higher when PYUSD is held outside the platform - the yield is expected to be the first step to increase PYUSD trading volume and integration.
April 21: Circle announces the launch of the Circle Payment Network in partnership with Deutsche Bank, Societe Generale, Santander, Standard Chartered, and several stablecoin startups to improve international payments.
Circle is competing with SWIFT (the dominant network for international bank transfers) and the correspondent banking network, directly targeting the latter's often criticized SMS service and slow payment speeds. To succeed, they need to build a better business model and product for the Circle Payment Network than the correspondent banking business.
April 1: Circle applies to list on the New York Stock Exchange, making stablecoin payments legal.
Circle’s S-1 preparations for going public kicked off in January, with the filing on April 1, aimed at further legitimizing stablecoin payments, laying the groundwork for broader user adoption and kicking off a month of announcements from some of the world’s most important fintech companies.
So what does all this mean? Traditional payment companies are not only recognizing the value of stablecoins, but they are also building critical infrastructure to enable backward compatibility for stablecoins, accelerating their adoption. While these products may at first glance look very similar to the payment methods we’ve been using for decades, payment companies are actually bootstrapping a new on-chain economy by embracing and building stablecoins.
How do we expect this to develop? We’re seeing people reliably using stablecoins through traditional payment methods today. The infrastructure improvements rolling out this year will lead more people to use stablecoins directly. By making stablecoin integration easier and more intuitive, we’ll also start to see larger network effects: more entrepreneurs building a new generation of products that are only possible with nearly instant, nearly free, programmable money.
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