Visa is rapidly becoming the dominant infrastructure for stablecoin payments globally, positioning itself as the critical link between traditional banking and the digital asset economy, according to a new report from Japanese bank Mizuho.
Mizuho analysts characterized Visa as “the network of stablecoins,” highlighting its central role in payments based on blockchain technology. The financial giant currently oversees more than 130 stablecoin-linked programs across over 40 countries.
Spending volume through Visa’s stablecoin programs quadrupled in the past year, underscoring the growing integration of these digital currencies. Analysts Dan Dolev and Alexander Jenkins, authors of the Mizuho report, anticipate Visa will be a major beneficiary of widespread stablecoin adoption.
They maintain an “outperform” rating for Visa shares, setting a price target of $425. At the time of the report’s publication, Visa shares were trading around $343.30.
🚨 Visa consolidates as the “network of stablecoins” according to Mizuho.
More than 130 stablecoin programs in 40 countries.
Stablecoin use grew 4 times in one year.
Visa connects banks and merchants, integrating cryptocurrencies into the financial system.
Mizuho projects a…— Diario฿itcoin (@DiarioBitcoin) June 5, 2024
Stablecoins are digital currencies whose value is pegged to another asset, such as the U.S. dollar, to reduce volatility. They are designed to facilitate transactions within the crypto ecosystem and streamline international money transfers. Tether (USDT) and USD Coin (USDC) are currently the leading stablecoins by market capitalization.
Mizuho noted that Visa’s existing network connects banks, stablecoin issuers, and merchants. This makes it an essential hub for the future of digital money. The company’s Visa Direct program, which enables real-time payments, has grown approximately 50% annually since 2016.
Visa Direct now accounts for 15% to 20% of global debit volume, processing over $1.1 trillion. Mizuho believes this established infrastructure will position Visa strongly as new legislation, such as the GENIUS Act, encourages stablecoin use.
The report also highlighted Visa’s capability to allow banks to create and destroy their own stablecoins using its tokenized asset platform. This functionality suggests a future where different stablecoins, like USDC, PYUSD, or EURC, could become virtually interchangeable within central networks.
Visa already supports four stablecoins on its platform: USDG, PYUSD, EURC, and USDC. Mizuho considers this an initial step in a broader expansion.
The bank stated, “In an environment where stablecoins are becoming a commoditized product, Visa’s role as a ‘network of networks’ or ‘stablecoin of stablecoins’ will be a key long-term growth driver.” This model is expected to help Visa capture more value as blockchain payments become integrated into e-commerce and financial services.
In a contrasting assessment, Mizuho reiterated an “underperform” rating for Circle, the issuer of USDC. The bank set a price target of $84 per share for Circle, whose shares were trading around $131.37 at publication time.