Main Points :
- Visa is piloting a new system enabling international transfers via pre-funded stablecoins (USDC, EURC) through Visa Direct.
- The pilot aims to boost liquidity, reduce capital lock-up, and accelerate transaction speed.
- Upcoming regulatory frameworks, especially the U.S. GENIUS Act, are lowering barriers for stablecoin adoption.
- Global momentum in stablecoin payments is rising—in Asia, Europe, and via legacy payment networks like SWIFT.
- Risks and challenges remain: reserve transparency, regulatory alignment, counterparty risk, and interoperability.
1. Visa Launches Stablecoin-Prefunded International Transfers
On September 30, 2025, Visa announced a pilot program allowing banks, remittance firms, and financial institutions to “prefund” funds in stablecoins—specifically USDC and EURC—within its Visa Direct infrastructure for cross-border payouts.
Under the traditional model, firms wanting to pay across borders must hold fiat in multiple jurisdictions or pre-position balances in foreign accounts, which ties up capital and incurs friction. With Visa’s approach, stablecoins act as a cash equivalent, enabling funds to be held on-chain and released when needed—without requiring an account in every currency region.
Although recipients may still receive funds in their local fiat currency, the underlying settlement and liquidity management layer leverages tokenized assets. Visa frames this as a modernization of treasury operations, improving flexibility, reducing delays, and lowering the cost of cross-border financial flows.
Visa plans to test the model across select partners initially, with the goal of broader rollout in 2026.
2. How the “Prefunding” Model Works & Its Advantages
2.1 Pre-funding vs. Traditional Nostro/Vostro Accounts
In legacy cross-border systems, banks maintain nostro/vostro accounts (internal accounts held abroad) to facilitate foreign payments. That means locking capital in foreign jurisdictions, liquidity bottlenecks, and balance sheet friction. Visa’s pilot inverts that: rather than fiat in accounts, stablecoin tokens serve as the balance that can be drawn on-demand.
2.2 Liquidity Efficiency & Capital Release
Because stablecoins are programmable and blockchain-native, funds don’t need to be idle in foreign bank accounts. Companies can manage liquidity more dynamically, shifting capital where it’s needed without segmentation by geography. This is especially beneficial for corporates with multi-currency operations.
2.3 Speed & Settlement Improvement
Visa claims this structure can reduce settlement times from days to minutes by avoiding multiple intermediaries and manual reconciliation.
2.4 Risk Isolation & Flexibility
Since the token funding model is separated from fiat paths, firms can mitigate some banking counterparty risk and improve modularity. Moreover, institutions can choose whether to accept funds in fiat or stablecoin form, decoupling settlement rails from user experience.
3. Regulatory Tailwinds: The GENIUS Act & Beyond
A major enabler of this pilot is shifting regulatory frameworks—especially in the U.S. In July 2025, Congress passed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), setting guardrails for “payment stablecoins.”
Under GENIUS:
- Issuers must maintain full reserves in high-quality assets (e.g., U.S. Treasuries or cash) and regularly disclose proofs.
- Only qualified entities (such as banks, insured depositories, or approved nonbanks) may issue payment stablecoins.
- Monthly audits and executive attestations on reserve accuracy are required.
These rules reduce regulatory ambiguity and replication risk—making institutions more comfortable participating in stablecoin rails.
In parallel, global regulatory regimes are evolving. The European Union’s MiCAR (Markets in Crypto-Assets) now governs e-money tokens and asset-referenced tokens across the bloc.
4. Global Momentum: Stablecoins Beyond Visa
Visa is not alone in exploring tokenized payments. Multiple trends across regions and platforms are converging to elevate stablecoins as infrastructure—not novelty.
4.1 Asia & Crypto Payments
In Singapore, OKX has enabled USDC and USDT payments for GrabPay merchants. Transactions convert to local fiat (SGD) for merchants, but consumers pay with stablecoins.
In Hong Kong, Standard Chartered, HKT, and Animoca Brands are forming a JV to issue a Hong Kong dollar-backed stablecoin, pending regulatory licensing.
4.2 European Institutional Moves
A consortium of nine European banks—including CaixaBank, ING, and UniCredit—recently announced plans to issue a euro-backed stablecoin, targeting a 2026 launch. This aims to reduce reliance on U.S. dollar–pegged stablecoins within Europe.
4.3 Legacy Networks Adapting
SWIFT, recognizing the threat of tokenized assets, is developing its own blockchain-based ledger to support tokenized payments and stablecoins, in collaboration with major banks and ConsenSys.
Payment giants are also responding. Mastercard is partnering with Fiserv to integrate FIUSD, its stablecoin offering, enabling merchants to settle via stablecoins.
Cloudflare, an infrastructure firm, plans to launch its own U.S. dollar–backed stablecoin (“NET Dollar”) to serve AI-driven microtransaction environments.
Furthermore, Ripple recently acquired the stablecoin infrastructure platform Rail for $200 million—showing strategic consolidation in stablecoin infrastructure.
4.4 Research & Theoretical Advances
Academic proposals—such as JANUS, a so-called “Stablecoin 3.0” model—explore architectures combining multiple collateral types, dual-token designs, and AI-driven peg adjustments to improve stability, capital efficiency, and decentralization.
Other work models hybrid monetary systems where central bank money, CBDCs, and private stablecoins coexist—with interlocking guarantees and liquidity bridges.
5. What This Means for Crypto Investors, Builders, and Enterprises
5.1 New Yield & Arbitrage Paths
As stablecoin rails grow, opportunities may emerge for treasury operations, liquidity providers, or algorithms that arbitrage between fiat funding channels and tokenized rails. Understanding on-chain liquidity dynamics, swap spreads, and reserve yields is becoming critical.
5.2 Infrastructure as a Strategic Play
Projects building settlement layers, interoperability bridges, accounting or compliance middleware, or risk frameworks could become foundational plumbing in token-native payments. The underlying rails often matter more than any single token.
5.3 Token Design & Credibility
Any stablecoin aiming to integrate with global payments must ensure impeccable reserve transparency, audit discipline, and regulatory compliance. Tokens that cut corners on trust will struggle to reach institutional scale.
5.4 Interoperability & Cross-Chain Execution
Because entities may fund in stablecoins on one chain and settle on another, cross-chain bridges and settlement protocols will be essential. Without them, liquidity could be siloed.
5.5 Geographic & Regulatory Diversification
Given geopolitical risk and regulatory fragmentation, multi-jurisdiction stablecoin issuance and cross-border compliance will be key. Europe’s push for a euro stablecoin or Asia’s regional issuance shows the importance of local alternatives.
6. Challenges & Risks to Watch
- Reserve Risk & Transparency: While regulations like GENIUS demand audits and reserve backing, real-world adherence and oversight will matter. If a token de-pegs or faces a run, reputational impact is high.
- Regulatory Fragmentation: Different countries and regions have divergent rules—interoperating stablecoins across jurisdictions could hit compliance friction.
- Counterparty Risk & Custody: Entities need trust in issuers and custodians. Failures or fraud could undercut the entire system.
- Technology Complexity: Cross-chain settlement, latency, transaction costs, and gas volatility remain technical hurdles.
- Competition with CBDCs: If central bank digital currencies (CBDCs) become widespread, private stablecoins may face pressure or displacement in core rails.
7. Case Study: Tether’s Treasury Impact & Market Leverage
A compelling study (The Stablecoin Discount) revealed how Tether (USDT)—the largest stablecoin by capitalization—directly holds tens of billions in U.S. Treasury bills. By controlling ~1.6% of all outstanding U.S. T-bills, it exerts measurable downward pressure on short-term yields. arXiv
This suggests stablecoin issuers are no longer passive actors—they influence macro liquidity, yield curves, and capital markets. For builders and investors, it’s a reminder: large-scale issuance implies large-scale economic impact.
Conclusion & Outlook
Visa’s stablecoin pilot marks a turning point: for the first time, a major payments network is treating stablecoins not as novelty tokens, but as liquidity instruments in cross-border settlement. This approach—prefunded, on-chain, programmable—could reshape how corporations manage capital, how payments networks innovate, and how tokenization diffuses into mainstream finance.
However, the journey is only beginning. The success of this model will hinge on regulatory integrity, technical robustness, industry adoption, and trust in reserve mechanisms. Global movements—from Europe’s euro stablecoin to SWIFT’s blockchain plans—signal that we are entering a phase where tokenized cash is becoming infrastructure, not experiment. For investors, builders, and enterprises tracking the next frontier, the rails may matter more than the coins themselves.
