Visa Launches Stablecoin Platform, Backing Rival to Circle's USDC

On Thursday, July 16th, the payments network announced the launch of the Visa Stablecoin Platform (VSP), which is a service that enables fintechs, banks, and payment companies to issue, store, transfer, and redeem stablecoins on one platform. The goal of Visa is to deliver an integrated solution in a single API thus superseding a variety of isolated blockchain platforms, custodians, and compliance solutions while providing wallet infrastructure, blockchain access, and API for risk and fraud management that can be integrated into bank systems.

It is reported that security mechanisms may have comprised dual-approval operating procedures, a transaction audit trail, passkey logins, and lists that users may set to indicate which trading partners they may or may not trade with, among other security features that large financial institutions generally require before considering the use of crypto.

Rubail Birwadker, who is managing the global lead for growth, confirmed that the initiative intends to allow customers not to notice technical intricacies. In his view, the problem of the banking sector is not related to the understanding of stablecoins, but rather to the identification of the function of such tokens in treasury processes, as well as in settlements and transfers of funds. Jack Forestell, Chief Product and Strategy Officer at Visa, supported this idea, claiming that there are not only theoretical obstacles but also operational difficulties that the organizations need to overcome thanks to the fact that VSP will help them to use Visa’s network and many tools.

VSP will begin to take shape thanks to Open USD, the new stablecoin put forward last month by Open Standard, a consortium supported by more than 140 organizations, with companies like Visa, Mastercard, BlackRock, Coinbase, Stripe, Alphabet, and BNY lending their support. What the coin offers is unique in the industry, whereby Open Standard has excluded issuing any minting fee or redemption fees, thus making sure that most of the interest accrued from holding the reserves will go to the partners of the company involved in the issuance of the coin.

This setup is essentially dissimilar to that of Circle regarding USDC, with most of the reserve earnings being received by Circle itself. By introducing Open USD through the company’s network of around 15,000 banks and 200 million vendors, Visa allows for a distribution method that took traditional players years to create.

However, Visa is continuing with its existing collaborations with stablecoins. The company said in its announcement that it still supports both USDC and Paxos’ USDG and acts as an umbrella for its various stablecoin capabilities, which it has been developing since 2020, when it was the first payment network to transact in USDC, followed by establishing a dedicated stablecoin settlement program in December of the same year. According to information published early this year, the volume of settled transactions had approached the annual rate of about $7 billion.

Investors read the announcement as a warning shot aimed at Circle. Shares of Circle fell by roughly 5–6% on the news, while Coinbase, which also has exposure to the stablecoin trade, dropped around 4–5%. Visa’s own stock ticked up about 2%.

The reaction builds on a rough stretch for Circle’s stock since Open Standard first went public with its plans. Analysts pointed out that the revenue-sharing model of Open USD might possibly eat into the profits of Circle should it manage to successfully move the trading volumes away from USDC. Mizuho, for instance, cut its price target on Circle from $85 to $50 this week, citing the threat that Open USD’s economics pose to Circle’s existing model.

However, momentum is not equivalent to market share. Open USD is an intimate industry entry that still requires establishing the liquidity, regulatory ties, and regular use that USDC has achieved over the years.

Visa is not the only company that views stablecoins as essential infrastructure. Mastercard, the other supporter of Open Standard, acquired a stablecoin infrastructure company, BVNK, for nearly $2 billion earlier this year, and has since joined forces with a partner like MoonPay, as well as partnering with Paxos through its Global Dollar network ventures. American Express has signed onto Open Standard as well, and PayPal continues to expand its own PYUSD token. The latter moves signal the payment giants’ intent to acquire stablecoin infrastructure and not just access its benefits.

The moves also make sense in light of the overall situation: currently, total stablecoin volumes exceed $310 billion, and some projections (such as Morningstar’s) put the total market value of stablecoins in the range of $1.5 trillion by 2035. The enactment of the GENIUS Act in mid-2025 allowed the industry to finally obtain federal regulation in the U.S., thereby eliminating some of the accompanying legal uncertainty that had prevented well-established payment companies from entering the market.

According to Visa, VSP is still in beta testing phase with a group of selected clients and may go for broader rollout in the near future, but Visa has not disclosed the number of institutions that were involved in testing. The logic here is simple: if they manage to make stablecoins work in the same way as another payment system instead of acting as an independent crypto tool connected to an existing payment network, banks and fintechs alike will start using them.

For Circle, currently, the most significant issue is changing the competitive terrain. It’s not only about which stablecoin has stronger name recognition or liquidity. Rather, the issue is whether a network such as Visa’s, along with a fee-free, revenue-sharing token like Open USD, can provide better service than a long-established competitor that has spent years building trust with regulators and institutions. Ultimately, whether this gamble pays off will rely more on the reaction of banks than on the announcement itself.