Visa launches stablecoin platform backed by Open USD, pressuring USDC
In brief
- Visa Stablecoin Platform lets institutions issue, manage and settle stablecoins integrated with Visa's payments infrastructure
- Open USD from Open Standard consortium backed by Visa, BlackRock, Alphabet and Coinbase
- Open USD eliminates minting and redemption fees, returns nearly all reserve income to distribution partners
- Circle's USDC stock fell 5% following announcement as second-largest stablecoin faces institutional competition
The Platform's Mechanics
The VSP includes tools for minting and redeeming the token along with wallet infrastructure for managing onchain assets. Visa said the platform provides Wallet-as-a-Service infrastructure, blockchain connectivity and security features such as dual-approval workflows, audit logs and transfer allow lists.
The platform is also integrated with Visa's existing payment network, allowing financial institutions to incorporate stablecoins into treasury management, settlement and payment products without replacing their existing systems. This design lets banks and fintechs adopt digital dollars at their own pace, layering stablecoin capabilities atop legacy infrastructure.
Why Open USD Matters
Open Standard is seeking to attract banks, payment firms and crypto exchanges by eliminating minting and redemption fees while returning nearly all reserve income to distribution partners. That fee structure stands in sharp contrast to existing stablecoins, where issuers typically retain yield on reserves.
Jack Forestell, Visa's Chief Product and Strategy Officer, framed the challenge this way: "Stablecoins are opening up a new layer of programmable money, but for most institutions the hard part isn't the concept, it's the operational reality."
Market Pressure
Circle's USDC is the world's second-largest stablecoin behind Tether's USDT. Circle shares were down about 5% on Thursday following the announcement of the Visa Stablecoin Platform. The move signals that institutional stablecoin adoption is shifting from pure crypto rails to hybrid models that blend blockchain settlement with traditional payment infrastructure.
Visa already supports stablecoin settlement for select partners, offers crypto-linked card programs and has expanded blockchain-based cross-border payment services. The VSP represents a more formal, productized entry into the stablecoin-issuance space.
