Visa Explores Stablecoins for Faster Cross-Border Settlements

Visa Direct is testing a stablecoin prefunding pilot aimed at enabling quicker cross-border payments for businesses. This new initiative is designed to minimize delays and costs associated with international money transfers.

Key Takeaways

Visa Direct has launched a pilot program using stablecoins for international payments.
This approach allows businesses to make instant payouts without relying solely on fiat currency.
The initiative aims to ease the challenges in global money transfers, such as pre-depositing large sums.
Visa Direct plans to expand this initiative if the pilot proves successful by 2026.
The stablecoin sector is gaining traction globally, with regulatory frameworks emerging in various regions.

Visa explores stablecoins for faster cross-border settlement - 1

Innovative Approach to Cross-Border Payments

Visa Direct is taking significant steps toward integrating stablecoins into mainstream finance by introducing a pilot program that facilitates faster cross-border payments. Announced on September 30, this new stablecoin prefunding pilot allows businesses to utilize digital assets for immediate payouts instead of depending exclusively on traditional fiat currency.

This pilot program is designed to address the common issues of delays and high costs that often plague global money transfers, where companies must hold substantial sums in local bank accounts to ensure they can cover payments. By leveraging stablecoins as a settlement mechanism, Visa asserts that financial institutions could achieve quicker access to liquidity and enjoy more flexible treasury management.

According to the announcement, stablecoins deposited with Visa Direct will be treated as readily available cash for payouts, which could diminish the necessity for maintaining pre-deposited balances in numerous currencies. “For decades, the processes involved in transferring money across borders have relied on slow and expensive systems that unnecessarily tie up capital. With this pilot, Visa Direct is exploring stablecoins as a new source of funding. The aim is to reduce friction, provide quicker access to liquidity, and offer financial institutions greater flexibility in managing global payouts,” the company stated.

Currently, this initiative is being tested with select partners, with plans for broader implementation through 2026 pending successful outcomes.

Growth in Stablecoin Adoption

This initiative from Visa comes at a time when the stablecoin industry is witnessing rapid adoption and increasing regulatory attention globally. In the United States, President Donald Trump recently signed the bipartisan GENIUS Act into law, establishing a federal framework for stablecoins along with guidelines for consumer protection and regular audits.

In Europe, several financial institutions are also welcoming stablecoins. A consortium of nine major banks—including ING, Banca Sella, Danske Bank, UniCredit, SEB, and CaixaBank—is collaborating to launch a euro-denominated stablecoin that will comply with the EU's Markets in Crypto-Assets Regulation (MiCAR).

Worldwide, countries such as Singapore, Hong Kong, and Japan are implementing regulations for stablecoins and fostering their use in remittances and cross-border digital payments, reinforcing their role as tools for swift and secure transactions.

As it stands, the total market capitalization of stablecoins is approximately $307.8 billion, based on data from CoinMarketCap. Dominating this market are Tether Tether usdt-0.01% and Circle’s USD Coin USDC usdc0%, which combined represent over 90% of the circulating supply.