Payment giants Visa and Mastercard are facing a potential $255 billion threat from the growing popularity of stablecoins. This is according to recent reports and statements from executives at both companies.
Stablecoins: A Threat or Opportunity?
Stablecoins, cryptocurrencies pegged to the value of a stable asset like the US dollar, are significantly cheaper than traditional transaction methods. This poses a potential challenge to Visa and Mastercard’s business models, which rely on transaction fees.
Visa’s chief product and strategy officer, Jack Forestell, acknowledges the potential disruption but highlights Visa’s adaptability. He points out that Visa has successfully navigated past challenges like mobile wallets and buy-now-pay-later apps. Forestell emphasizes Visa’s role in providing the necessary infrastructure for widespread stablecoin adoption.
Mastercard’s chief product officer, Jorn Lambert, takes a more optimistic view, seeing stablecoins as creating new opportunities rather than replacing existing systems. He believes stablecoins will primarily expand into new areas like remittances and business-to-business payments, rather than completely displacing traditional payment methods.
Big Retailers Eyeing Their Own Stablecoins
Adding to the pressure, reports suggest that major retailers like Walmart, Amazon, Expedia, and several airlines are exploring the possibility of issuing their own dollar-pegged cryptocurrencies. The goal is to reduce the billions of dollars they currently spend on transaction fees.
The Bottom Line
While the future impact of stablecoins on Visa and Mastercard remains uncertain, the companies are clearly aware of the potential disruption and are preparing to adapt. Whether stablecoins become a major threat or a source of new revenue streams for these payment giants remains to be seen.