With the advent of cutting-edge technologies like blockchain, the payments space is rapidly evolving. A conversation between Ran Goldi of Fireblocks and Nikola Plecas of Visa Crypto took listeners on a deep dive into the world of digital assets, blockchain, and the role and potential of stablecoins in global payments.
How Visa and other institutions can overhaul the movement of money with stablecoins
In the conversation, Goldi laid out how stablecoins offer an array of advantages. Programability, auditability, swift settlement times, self-custody options, and interoperability are factors leading to their increasing adoption by payment companies across international borders. Goldi introduced the concept of a “stablecoin sandwich,” a process of exchanging fiat currency to stablecoins and back, making global money transactions faster and more accessible. This innovative approach is changing the way we transfer money, taking minutes rather than days.
Meanwhile, Plecas detailed Visa’s significant role as a commercializer of fiat payments with blockchain technology. Establishing a bridge between new blockchain technologies and its vast existing network of merchants and financial institutions, Visa has been at the digital frontier. Furthermore, through Visa Direct, clients can receive fiat currency payouts to their Visa accounts.
Plecas emphasized the expanding adoption of stablecoins and their potential to overhaul current money movement solutions – from remittance to cross-border payments. He cited a report highlighting substantial usage and positive attitudes toward stablecoins in emerging markets. Even during economic downturns, the steady growth of stablecoin usage signals its invaluable role in preserving individual wealth and savings, especially in high-inflation economies.
Where stablecoins fit in today’s financial stack
Goldi added that blockchain serves as an upgrade to current financial systems, capable of superior value transfer. He noted that the benefits of speed, efficiency, and cost saving offered by stablecoins make them appealing to payments companies. They are also instrumental for cross-border transfers and as a preservation mechanism for wealth during high inflation. Furthermore, blockchain technology plays a part in real-world asset tokenization, providing financial institutions with additional means to serve corporate and institutional customers.
Goldi’s elevator pitch for blockchain-based payments underlined its capability to serve a segment traditional payment companies have usually overlooked. He illustrated this with an example of gig economy employees who can now receive payouts to their crypto wallets, a significant step forward from a former era of high transfer costs. He shared success stories, such as a Latin America-based payment company that utilized stablecoins to expedite payments for importers and exporters, reducing customs holding times and extra costs.
On the topic of revenue expansion, Goldi explained that payment companies could make more money by offering services that traditional banks might not be able to provide – such as issuing cards associated with crypto wallets in regions where establishing bank accounts could be challenging. Partnering up with institutions like Visa can further enhance expansion opportunities.
Expanding on the subject of Real-World Assets (RWAs), Plecas discussed how Visa has worked with over 150 crypto wallets to issue cards and that tokenizing RWAs in the context of blockchain-based payments can provide new revenue models and expand market reach. He further shared Visa’s vision through their new Visa Tokenized Asset Platform (VTAP) to enable clients to operate and experiment on different blockchains.
Stablecoins and the global regulatory climate
Throughout the discussion, they emphasized the significance of keeping pace with financial innovation and how it contributes to enhancing existing services. Regulatory frameworks and regulations were also key talking points, with hopes for similar frameworks like MICA in Europe to be established in the US, encouraging more payment companies to adopt stablecoins and execute a significant upgrade in the financial system.
In summary, if the insights from this conversation are anything to go by, blockchain and stablecoins are not just technological trends but are the future. The combination of these innovative technologies is enhancing the payments ecosystem, and in the process, creating new markets and expanding existing ones. As Goldi shared, “We’re going to see a major shift of payment companies to this space, and the largest financial system upgrade of our generation will finally start.”
Watch the complete discussion here.
