To The Moon

Stablecoins vs. Traditional Payments: The Battle for Financial Dominance

In a week that sent shockwaves through financial markets, retail titans $Amazon.com(AMZN)$   and $Wal-Mart(WMT)$   set off alarm bells by exploring stablecoin launches to dismantle their reliance on traditional payment networks. The bombshell dropped Tuesday when the U.S. Senate greenlit the game-changing GENIUS Act—and the market's response was brutal: $Visa(V)$   plunged 4.9%, $MasterCard(MA)$   tanked 5.4% while $Coinbase Global, Inc.(COIN)$   soared 16.3% by June 18's close. 

The market is now pricing in the potential large-scale adoption of blockchain in payments and credit, posing a threat to incumbents like Visa. Is this the beginning of the end for traditional payment systems? And how will these giants fight to survive the digital revolution?

How Stablecoins Disrupt Traditional Payment Networks

Stablecoins have transitioned from niche crypto tools to mainstream global payment infrastructure. As White House crypto advisor David Sacks told Bloomberg, stablecoin legislation will accelerate their growth and strengthen U.S. dollar demand. CEX.IO data shows stablecoin transaction volumes hit $27.6 trillion in 2024, exceeding Visa and Mastercard's combined totals. With speed and cost advantages in cross-border remittances, DeFi lending, and e-commerce, stablecoins are reshaping global payment systems. 

This cost edge—enabling retailers like Walmart and Amazon to bypass traditional networks, save billions in fees, and settle instantly—disrupts Visa/Mastercard's "four-party model." Direct blockchain payments between wallets skip issuers, acquirers, and clearinghouses, reducing transaction flows on legacy platforms.

Traditional Giants Strike Back: Exploring Roles in On-Chain Payments

"While Visa/MasterCard can definitely lose some market share to the stablecoin ‘rail’ over the longer - term in some use cases, there is also a lot of opportunity for the networks to become important participants in the crypto ecosystem," notes Evercore ISI analyst Adam Frisch.

Facing threats, Visa and Mastercard are proactively adapting: 

– Visa has partnered with Crypto.com and Circle to pilot USDC on-chain clearing across Ethereum and Solana, enabling direct settlements with select merchants. The firm integrated stablecoins into its card infrastructure, launching a co-branded card with Stripe's Bridge platform in May for direct stablecoin-to-local fiat transactions at 1.5M global merchants. It also teamed up with Yellow Card to facilitate stablecoin-based cross-border payments in emerging markets.  

– Mastercard unveiled its Multi-Token Network to test cross-chain payment solutions, partnering with MoonPay to issue cards linked to stablecoin wallets that auto-convert to fiat at checkout, covering 150M merchants worldwide.  

Both giants have obtained crypto asset compliance licenses worldwide, laying a regulatory foundation for their stablecoin strategies. Visa and Mastercard, via partnerships or own entities, have secured Virtual Asset Service Provider (VASP) status in Singapore, the UK, the UAE, the EU, etc. They're developing digital wallets, on - chain clearing, and exchange bridges under local regulations. With frameworks like the EU's MiCA and Hong Kong's VASP licenses, they've built global compliant node networks, acting as trusted bridges in the stablecoin ecosystem and paving the way for cross - border digital currency payments.

Is the Traditional Payment Model on the Brink of Collapse?

1. Moats Are Hard to Breach Short - Term

Global digital payments are network - economy driven. Closed - loop stablecoins lack Visa's global merchant network, brand trust, and standardized compatibility, having clear drawbacks. Also, Visa and Mastercard have built moats with value - added services, enhancing their irreplaceability. They offer not just transaction processing but also account management, fraud prevention, dispute settlement, and consulting — deeply binding merchants and financial institutions. In contrast, stablecoins are still stuck in basic payment functions, lacking systemic synergy with issuers and merchants.

1. Stablecoins' Breakthrough Won't Happen Overnight

Stablecoins still can't replace Visa's core position in payment network integrity and user stickiness. While they attract high - frequency merchants like Walmart and Amazon with cost - efficiency, they lag in convenience, security, dispute handling, and adoption, resulting in a lack of sufficient consumer-side drive. Just as Sanjay Sakhrani said, "Price and settlement time are really good for merchants, but they don’t mean much to consumers."

Stablecoins may gain in markets with high crypto adoption and low credit card penetration, but restructuring Visa's payment networks in core markets will take time and systemic efforts. Legal frameworks provide a compliance base, but stablecoins still face AML(Anti-Money Laundering) and capital control hurdles in cross - border transactions, limiting large - scale rollout.

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