By Manya Saini,Niket Nishant
Copyright reuters
Sept 30 (Reuters) – Visa (V.N), opens new tab said on Tuesday it will start testing a new way for businesses to fund international payments by allowing them to use stablecoins instead of pre-depositing cash in local accounts.
The move signals growing acceptance of these digital tokens among major businesses, who have been emboldened by the United States passing the Genius Act, a law that set clear rules for stablecoin issuers.
“The Genius Act changed everything. It made everything so much more legitimate. Before that regulatory clarity, all the big institutions were sort of on the fence,” Mark Nelsen, head of product for Visa’s commercial and money movement solutions, said in an interview with Reuters.
Advertisement · Scroll to continue
The company is working with some unnamed partners and plans to expand the pilot program next year, it said.
The pilot initiative will allow banks, remittance firms and other financial institutions to pre-fund accounts with stablecoins instead of traditional currencies.
Such a move could make cross-border transactions faster and free up cash, as companies often have to lock funds in multiple currencies worldwide to cover local payouts.
Stablecoins are digital tokens designed to keep a constant value. They are often backed by traditional assets such as the U.S. dollar or Treasuries.
Their utility in moving money quickly across borders has fueled concerns that they could erode the market dominance of some payment companies and regional banks.
Advertisement · Scroll to continue
“Stablecoins are moving from crypto gimmick to financial plumbing. It’s one of the reasons we launched an inverse regional bank exchange-traded fund as I think the regionals are in trouble,” said Matthew Tuttle, CEO of Tuttle Capital Management, referring to a fund designed to profit when regional bank stocks decline.
Visa’s pilot program, however, highlights how some incumbents are focusing on collaboration instead of competition, turning stablecoins into a tool to reinforce their own infrastructure.
“The amount of software and technology that’s been deployed globally for payments is hard to recreate. So it seems more likely to just incorporate stablecoin technology into existing flows,” Nelsen said.
Ad Break Coming Up
NEXT StayNext
OffEnglish
180p288p360p480p540p576p720pHD1080pHDAuto (180p)
About ConnatixV2071417568
About ConnatixV2071417568
Continue watchingafter the adVisit Advertiser websiteGO TO PAGE
Reporting by Niket Nishant and Manya Saini in Bengaluru; Editing by Leroy Leo
Purchase Licensing Rights
Niket NishantThomson ReutersNiket Nishant reports on breaking news and the quarterly earnings of Wall Street’s largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry. His writing appears on the finance, business, markets and future of money sections of the website. He did his post-graduation from the Indian Institute of Journalism and New Media (IIJNM) in Bengaluru. EmailXLinkedinManya SainiThomson ReutersManya reports on prominent publicly listed U.S. financial firms, including Wall Street’s biggest banks, card companies, asset managers, and fintechs. She also covers late-stage venture capital funding, initial public offerings on U.S. exchanges, and regulatory developments in the cryptocurrency industry. Her work appears in the finance, markets, business, and future of money sections of the Reuters website.
A passionate reader, she loves books across genres, from classics to contemporary fiction. She holds an undergraduate degree in Political Science from the University of Delhi and a master’s in journalism from the Symbiosis Institute of Media and Communication.EmailXLinkedin
