Visa introduced its Visa Stablecoin Platform (VSP) on Thursday, enabling banks and fintech companies to issue and manage stablecoins through Visa's extensive payments network.
The platform debuted with Open USD (OUSD), a stablecoin backed by major investors including BlackRock, Alphabet, and Coinbase. OUSD has a zero-fee model for minting and redeeming, allowing businesses to avoid costs and benefit from shared reserve income, differing significantly from existing stablecoin models.
Platform Features and Support
Along with OUSD, Visa continues to support other stablecoins like Circle's USDC and Paxos' USDG. The VSP facilitates the minting, redemption, storage, and transfer of stablecoins, featuring dual-approval workflows, audit logs, and transfer allow lists.
Rubail Birwadker, Visa’s Global Head of Growth, emphasized that the new platform simplifies stablecoin integration within existing banking systems rather than merely providing access. Visa aims to assist institutions with operational challenges related to running stablecoins, highlighting its Wallet-as-a-Service approach.
Market Reactions
The announcement has raised concerns for Circle, the issuer of USDC, as its shares dropped approximately 5% following the news. Investors fear that OUSD's competitive structure could impact USDC’s market share. Currently, Circle stands as the second-largest stablecoin after Tether (USDT).
OUSD is anticipated to fully launch later this year. This move by Visa is seen as a strategic approach to connect modern financial systems with stablecoin capabilities.
This material is for informational purposes only and is not financial advice.
