Visa launches stablecoin platform as Open USD challenges Circle's USDC

Visa's entry into stablecoin infrastructure marks the most significant embrace of blockchain-based payments by a traditional financial network, giving 15,000 banks and 200 million merchants a single system to mint, move and manage digital dollars.

Visa on Thursday launched the Visa Stablecoin Platform, an internal system that lets financial institutions issue, transfer and manage stablecoins within their existing payment and treasury workflows. The platform will initially support Open USD, or OUSD, a stablecoin created by Open Standard — a consortium backed by BlackRock Inc., Alphabet Inc., Coinbase Global Inc. and Visa itself.

"With the Visa Stablecoin Platform, we're giving our clients a single place to mint, move and manage stablecoin operations with the controls, security and network reach they already expect from Visa," Jack Forestell, chief product and strategy officer at Visa, said in a statement.

The platform consolidates Visa's existing stablecoin services under one umbrella. Visa became the first payments network to settle transactions in USDC in March 2020, and rolled out a stablecoin settlement program in December. The company, which processes roughly $15 trillion in payments annually, already handles several billion dollars in stablecoin settlements, according to Rubail Birwadker, Visa's global head of growth.

"We want to bring them along on this journey, and we've been doing that for the better part of half a decade, and this is just the next iteration," Birwadker said.

OUSD differentiates itself from existing stablecoins by eliminating minting and redemption fees while returning nearly all reserve income to distribution partners — a model that could shift value from issuers to distributors. The stablecoin market has swelled to above $310 billion in total value, with Morningstar projecting it could reach $1.45 trillion in circulation by 2035, driven by cross-border payments and remittances.

Shares of Circle Internet Group Inc., issuer of the second-largest stablecoin USDC, fell as much as 6% on the announcement, while Coinbase — which has a partnership with Circle — dropped 4.5%. Visa shares rose nearly 2%. The moves reflect investor concern that Open Standard's consortium model could erode Circle's competitive position by offering banks and fintechs a more favorable economic split.

Visa is not alone in courting the stablecoin market. Mastercard introduced stablecoins as a settlement option for banks and payment firms last month, starting with six regulated dollar-backed assets, and has partnered with MoonPay and Paxos' Global Dollar network. American Express has also joined Open Standard as a partner.

For merchants, stablecoins offer near-instant settlement at minimal cost, with transactions recorded on blockchains that provide tamper-proof audit trails. Visa's platform aims to abstract the technical complexity so clients can focus on the payment experience rather than blockchain infrastructure.

The launch comes as the stablecoin market enters a new phase of institutional competition. With the backing of BlackRock, Alphabet and the world's largest payment networks, Open Standard's OUSD represents a direct challenge to Circle's USDC and Tether's USDT — one that could reshape how the economics of digital dollars are distributed across the financial system.

This article is for informational purposes only and does not constitute investment advice.