Stablecoins have played a large and important role in crypto markets for years. Now that we are beginning to see mainstream acceptance of digital assets like Bitcoin, stablecoins are along for the ride. While most stablecoins have benefitted, one in particular just received a significant boost as payment processing giant, Visa, teamed up with USDC.
USDC, which is a stablecoin pegged to the U.S. Dollar, is a joint venture of Coinbase and Circle. Since its launch, USDC has managed to become one of the world’s most popular stablecoins, and has already breached a billion dollar marketcap months ago. As promising as this success has been, the future now looks even brighter, as VISA has begun working to integrate USDC within its own network – a network which boasts roughly 60 million merchants.
This integration, which will see the stablecoin take part in Visa’s ‘Fast Track’ program, looks to eventually provide merchants with the ability to send/receive USDC through use of a traditional credit card.
Cuy Sheffield, Head of Crypto at Visa, commented on this development, stating,
“We continue to think of Visa as a network of networks. Blockchain networks and stablecoins, like USDC, are just additional networks. So we think that there’s a significant value that Visa can provide to our clients, enabling them to access them and enabling them to spend at our merchants.”
Visa appears to be taking advantage of positive market sentiment, choosing now to announce various forays into blockchain. In addition to the integration with USDC, Visa announced earlier this week that it was working with BlockFi to bring a credit card to market which would provide its users with rewards in the form of Bitcoin.
BlockFi notably supports USDC on its own platform, as well, putting the stablecoin in the center of a growing interconnected network of working relationships.
With blockchain only now emerging as a common technology, use cases like stablecoins have remained relatively obscure outside of industry participants. This is quickly changing, though. With developments such as the adoption by Visa, lawmakers around the world are beginning to perk up with regards to these digital assets.
Only days ago, a new bill was put forth in the United States surrounding the governance of stablecoins. The proposal, which is titled the ‘Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act’, was put forth with the goal of ‘protecting consumers from the risks posed by emerging digital payment instruments, such as Facebook’s Libra and other Stablecoins,’
In order to provide consumer protection, those responsible for the act state that this would be achieved through the regulation of stablecoin issuance and commercial activity. Among a series of proposed requirements for potential issuers, would be the procuring of a banking charter.
Despite only being announced days ago, the bill has already proved divisive. Naturally, those directly affected – such as those responsible for USDC – have voiced their disdain for the bill. Circle CEO, Jeremy Allaire, tweeted his thoughts on the bill, stating,
“The STABLE Act would represent a huge step backwards for digital currency innovation in the United States, limiting the accelerating progress of both the blockchain and fintech industry…Forcing crypto, fintech and blockchain companies into the enormous regulatory burdens of Federal Reserve and FDIC regulation and supervision is inconsistent with the goals and supporting innovation in the fair and inclusive delivery of payments that comes from stablecoins.”
Simply put – if passed, this bill would represent a significant burden on stablecoin issuers, delaying the development and growth of the sector as a whole. Opinions will vary as to whether this is a good or bad thing, and whether it is necessary to ensure consumer protection.