1/ Introducing Visa for Stablecoin: The Next Big Move Visa brings & extracts significant value from existing payment system, via its distribution network and superior UX. How does this dynamic translate to crypto? Introducing Visa for Stablecoins (VfS)

2/ Visa is one of the most powerful fintech companies globally, delivering seamless user experience to nearly all fintech applications. However, they charge premium fees: 0.5-3% for every transaction. This represents an important expense for most online businesses.

3/ Visa dominated the market because they: - cooperated instead of fragmenting - built a federated network governed by banks, not a for-profit board - provided an excellent UX - were regulated - established a massive distribution of POS machines for real-world payments

4/ What if someone builds a Visa for Stablecoins? Let's take a look at the current landscape: With US policymakers pushing for stablecoin regulation, now is the right time for a federal stablecoin network. However, not all stablecoin companies ready for this. Let me explain:

5/ Now, we have 3 types of stablecoin providers: a) Classical stablecoins (Circle, Tether) b) Yield-sharing stablecoins (Agora) c) Stablecoin-as-a-service protocols (m0, Stably) To understand them, we need to look at why Visa succeeded in the market with its economic model.

6/ Visa succeeded by leveraging strong network effects: as more banks partnered with them, more cards were issued, encouraging more merchants to accept them. Banks, in turn, could offer more credit to their users, creating a comprehensive flywheel effect. It was a win-win.

7/ Visa started as a federated network where banks collectively governed the system—not the government or a single for-profit company. It was designed to be neutral infrastructure for moving money, owned and managed by its participants. Let's take a look to the current market:

8/ a) Classical stablecoins Tether and Circle issue stablecoins, which users and merchants accept to access dollar liquidity. They earn around 4% yield from short-term T-bills and keep all the yield for themselves.

9/ b) Yield-Sharing Stablecoins I coined this term, so it might sound a bit strange. These stablecoin issuers allow third-party businesses to use their stablecoin, earning a yield from the idle assets on their platform. But protocols can’t own the brand and infra with this.

10/ c) Stablecoin as a Service protocols These protocols enable anyone to issue their own white-labeled stablecoins without worrying about licenses and other complexities. The yield can also be shared among participants. However, this approach has its challenges.

11/ This is where Visa for Stablecoins comes into play. It should provide all the following features: • Issuance, Treasury API • Shared Liquidity Layer • Chain-Abstracted Routing • KYC/AML, Travel-Rule Toolkit • Reg-Stack-as-a-Service • Developer & Merchant SDKs

12/ However, there are still a lot of open questions remaining: - What risks shift to merchants/issuers? - What infrastructure must “Visa for Stablecoins” provide? - Can shared liquidity work without owning infrastructure? - And most importantly, how do you change user habits?