How Visa Is Dominating The Digital Asset Card Market | Joshua Moss

Transcript

Welcome back to Stabled Up episode number 30. Our weekly premiere stable coin show powered by our friends at FRA with their F FRXUSD product. Visit fra.inance guys to learn more. If you've been watching, you've show you've seen this show evolve. Today we have a larger fintech public company in the nest in the tokenization tower. Joshua Moss. Good to have you, man. >> Thank you for having me. >> Welcome to the tower. >> Thank you. We have a great view. >> Not a bad view. I can see I can see the Visa office, your apartment, where you were having drinks on Saturday. >> It's all there.

>> It's all there. >> Josh, what is your role at Visa? Um, and how did you join the company? Welcome to the show. >> Yeah, thank you so much for having me. So, I've been Visa for about 5 years now. Um, and most recently I moved into a role leading our stable coin product strategy and go to market focused on stable coins for commercial and money movement solutions business. >> Okay. So there's a lot to unpack there. Um, and just to explain what we do just generally in the CMS or commercial and money movement solutions business on the commercial side, that's essentially, you know, you go to a coffee shop, use your consumer card, right? Everything outside of that consumer transaction is really

what we focus on in the commercial business. So that coffee shop needs to pay its suppliers, it needs to pay its rent, employees, etc. That's what we focus on in the commercial business. And then on the Visa Direct side, that's our, you know, the core of our money movement business. Um, and that's, you know, where we have, um, over 12 billion endpoints across cards, accounts, and wallets. And what we're doing across both of those business lines are finding ways to embed stable coins and blockchain technology in our solutions. >> Amazing. And this has been a long time coming from the blockchain world like from the sense of like okay we had stable coins as a construct right like so when I joined the space we were

trading against bitcoin that was the only pair stable coins came out that they dominated the trading landscape and for us it was like very obvious that uh these things were far were far more practical and feasible than an a than a wire um but like like all things these kind of industries are are kind of slow to mature through the regulatory process, through the adoption process, but it feels like something happened where like we reached this tipping point. Um there's a there's a very there's a very good book called the tipping point that explains kind of exactly what's happening right now in stable coins. What would you describe as Visa's tipping point, right? Or the kind of way that you guys have approached the payment space as it pertains to to stable coins. What was the the company's large kind of like okay this is it type

of moment? >> Yeah, definitely. So we view stable coins as both a currency uh and a rail. So you know at Visa we've actually been in the space for quite a long time and specifically in Visa direct. So you know for example when you go to Coinbase and you want to you know buy cryptocurrency or stable coins that's using what we call an account funding transaction or aft. And what that is doing is essentially pulling funds from your account to bring you on chain to on-ramp you so that you can then trade, you know, cryptocurrency at an exchange like Coinbase. Now, let's say you've been, you know, hodling for for a while and you've made a bunch of money on Bitcoin

um or another cryptocurrency and you want to offramp. That's where we have what's called OCTS or original credit transactions where we're essentially pushing those funds back to your card. Um, and so that's really how we've, you know, started in the space and then we've just continued to expand from there. >> Yeah. And so this this kind of contract of on-ramping and off-ramping was like the primary like original breakthrough uh thought process. It wasn't like the speed or the or the cost or the 24/7. It was just it was purely the on and the off-ramp side.

>> Well, so that was that was one piece of it and and really what we try to do is provide a bridge between both the Tradfi and DeFi worlds. Yeah. Um, and so, you know, that can show up in the form of, you know, the speed and efficiency of stable coins. Um, and then also really starting with the the DeFi world and trying to bring them into Tradfy and bring our clients um, our Trady clients onchain. And now what we're doing is we're looking at how we can support our Trady clients and bring them on chain um, for, you know, some of these specific use cases.

>> Yeah. Yeah. um you know when we're thinking about just to kind of lay the land of the scale here could you just kind of illuminate the scale that Visa currently operates in because I think a lot of us understand and you know a lot of us think that stable coins are growing right but when you think about it we are just like like 10 15 20 bips of the of the total kind of volume of payments and just of dollars moving around. Could you just give us a sense of like the scale like what what what kind of numbers did you guys do last year? I know you have earnings this week. What what is the scale here that your company occupies?

>> Yeah. So I give you give you two examples. So with Visa Direct and I said it before, so there's 12 billion endpoints that we support today. Um that operates in 195 uh different countries uh and territories and then we support a wide range of of currencies and you know different offerings and use cases there. uh in terms of the scale and where we are today with stable coins and blockchain, it's still very very early. Yeah. So, you know, there's been some, you know, great research out there um done with looking at the onchain data and the majority of it, you know, around 99% of that is for trading um you know, which is great. It's a great use case to support that and really only that 1% is for payments related use cases. Okay. Um

and so that's really what we're trying to grow. Um and then when you look at like where opportunities are right um just focused on B2B which is one of the largest spaces in the payments world the B2B market is about $145 trillion in payment volume let's say >> so where do stable coins find product market fit >> with B2B about 20% of that or so are crossber transactions and then let's take another haircut another 20% are high friction corridors where the currency is volatile. There's, you know, a number of it's very expensive due to correspondent banking. Um, and so that brings us to about $6 trillion just in the B2B space alone. Um, and so those

use cases, you know, those high friction B2B crossber corridors are really what we're focused on. Can you believe that about 90% of our six years in business in terms of our our payments from to and from contractors, clients, any merchant has been in stable coins >> for six years. >> Yeah, that's Yeah. And and that's that's really what it's about too, just you know, we we've been supporting, you know, our merchants, issuers, acquirers with a number of different offerings. Yeah. So just to you know list them out and sort of you know explain our stable coin strategy more broadly and where our clients need our support. Um you know just starting off I mentioned you know the AFTS and OCTS right with Visa Direct that's you know helping people get on

chain and you know off-ramp as well. >> Um then we also have our stable coin link cards we have stable coin settlement um and then we have preunding and payouts using stable coins um as an extension of our Visa direct network. Um, and then lastly, we have our consulting services. So, that's really helping, you know, everyone from, you know, our traditional issuers to our DeFi clients help develop their stable coin strategy. >> Yeah. Yeah. And I mean, this is a left field question, but I'm not sure if you guys have thought about launching a Visa stable coin. Does that make any sense?

Like, maybe talk to us about how you think about the relationship between a payment network and the issuers themselves. like how you see the collaborative and competitive dynamics between you know circle tether insert issuer here for a stablecoin and then payment networks like visa like stripe etc. Yeah, it's a great question and we view our role as you know bridging that gap like I was saying before and so what that looks like is supporting a number of coins and a number of chains um especially where they add value you know for our clients and so you know what we try to do is is basically just extend our network to these new currencies and these new rails to make it more efficient um and then help bridge that

gap because you know for example and just going back to Visa Direct you we have connectivity with, you know, a number of real-time payment networks. Um, which, you know, a lot of our DeFi clients might need that additional connectivity and and also from a Trafi perspective, um, the stable coin link cards, you know, that basically operates as a way for them to be able to spend that stable coin and make it useful. And so whatever that underlying currency is, just the way it operates in the trady world, we're bringing those same principles over to the DeFi world >> and and you must be seeing like margins of opportunity to add. So you you know, you laid out these business lines, right? and kind of how you're think

about stable coin strategy holistically. But you you guys wouldn't be here thinking about this if a you didn't feel like it was extremely disruptive to what you were doing or B or and/or you didn't see opportunity to grow a business line out of it. >> Which one of those is it? Is it a bit of both? Like how do you think about you know I put out this clip that was like Visa's cooked. They're too far behind. They're now scrambling to uh get into the stable coin game. agents are going to use stable coins. They're not going to use cards. Uh people are going to want to use kind of cryptonative uh kind of onchain networks.

>> And I know that you're going to, you know, push back on this, but just talk to me about the the reasoning behind this kind of broad strategy. Is it disruption? Is it monetization? How do you think about that? >> Uh I' I'd really say it's all the above. And so, you know, >> I'll just give you one example. >> Sure. So with uh stable coin settlement, so you know we're at an annualized run rate in the billions at this point >> just on stable coin settlement. >> Just on stable unpack what that is, what is stable coin set? >> Yeah, definitely. So I'll give you an example. So you have a an issuer um RAIN who who you might have heard of. So they have uh stable coin link cards.

>> They're crushing right now. >> They're doing great. And what they do is at the point of sale they will convert that stable coin into fiat and then the merchant just sees fiat. It's a BAU transaction after the conversion. >> With Visa and Visa's card payment business, the authorization and the settlement operate at different times. And so with the settlement, if you have an issuer, um, you know, such as Rain that operates in stable coins, what we're doing is saying you don't have to convert back to fiat just to settle with us. You can just send that stable coin directly to us and we'll count that as, you know, stable coin settlement and

fulfill that obligation. And why that's so important is you have a number of DeFi clients like Rain who, you know, they're incurring a lot of costs where they have to offramp the mint and burn fees just to settle with us, right? So that's that's one just trying to help them reduce their fees and make it easier for them to settle with us um 247 365. And then you also have um these clients that operate in emerging markets and you know it's actually easier for them to acquire a stable coin um USDC for example than it is to acquire USD due to the cost they're incurring and the time it takes due to corresponding

banking and a lot of the frictions there. Right. >> Right. And then the last example is you have some issuers, they need to hold collateral with us. >> Sure. >> Um and so they can actually start to settle with us on chain to help lower those collateral requirements because they can settle 24/7 365. And so we're really just trying to solve problems for those specific clients um and and really help them, you know, improve um their general operations using stable coins. >> Yeah. And so then kind of looping back through this uh stable coin settlement line of business into kind of this mental framework of disruption or um monetization. You can you can kind of

clearly see that there's both happening. Right. Right. Like you know this is going this is going to happen. You know this is something that is a trend that is accelerating in terms of uh the very obvious reasons for demand. Right. For if you're someone in let's say Latin America and you want to get exposure to dollars to hedge your currency, right? you're going to do stable coins because you can't get access to $2. I mean, unless you have somebody coming back from the states bringing you like bags of cash, right? Uh or you have an interactive broker's account and you can kind of figure out a way to get into into that through there. But either way, still very kind of very difficult. So, that's like on the disruption point, it's it's happening. On the monetization point, you you mentioned that you're running a multiple billion ARR business

with the stable coin settlement uh product. Uh in the in the kind of three examples that you laid out, which is the which is the most profitable or or kind of could you explain a bit about how that business actually generates that revenue? >> Yeah, sure. So, so essentially the way it works is, you know, when they settle with us, um, you know, it helps them reduce their costs and then we're charging a small fee >> and they as a business or aumer as an issuer. >> Yeah. Yeah. So, so it's issuers and acquirers and, um, when they're settling with some stable coins, part of that volume we're charging a small fee, but you know, they're really reaping the rewards that they would otherwise have to incur by, you know, converting back to fiat to settle with us, acquire USD

to settle with us. And so like the benefits significantly outweigh the costs in a lot of those. >> And so like cards like Rain, I believe Cast is another one. I don't know if they're a client or a competitor. >> Are they both or are they a client? >> There there are a number of um programs out there. I um in terms of in terms of where they operate, it's you know a very large global operation. Um, and so, you know, we're really just looking to ensure that if there is a stable coin wallet out there, we want them to be able to spend that stable coin. Okay.

And the biggest blocker at the moment, um, and with stable coin link cards, if we I want to talk about that for a second. >> Yeah. Yeah. >> Um, >> it is very hard to spend your stable coin. So, you know, one thing that we're actually hearing a lot of from clients is you're in a um a country where your currency is very volatile, right? So, we're seeing a lot of um clients or end end users basically receive their paycheck and then they'll immediately convert that to USDC on an exchange. >> Now, you know, how are you supposed to spend that stable coin to pay for your groceries or, you know, if you're a business to to pay for advertising for for example, right? And so that's where Visa's network really comes into play

where we support nearly 200 million merchants globally um both, you know, for in-person payments or online. And so that's really, you know, what we're trying to do, ensure that all of these stable coin wallets have cards attached to them to really add significant value for those customers. So Pudgy Penguin just came out with a card actually, which is great. Um, but Etherfy is the main crypto linked card that I use. Like I use it on the subway today, right? And so I have some like some ETH in there. You can actually borrow against your ETH in their structure. You get stables, then you can spend the stables. And so when I go to spend that stable on the subway, there's a settlement that has to happen between the currency, which is

the US dollar that the subway accepts, and the stable coin that I'm spending out of my wallet. And Visa is obviously there. And you guys are processing I mean millions of these transactions a month. Um and on that you're able to just continuously kind of create a business line there. >> Exactly. Yeah. And I think the the thing that's really great is >> the consumer experience does not change at all. >> Not at all. It's actually great. I'm sure you know there's a ton of great rewards and benefits that you're getting on chain. You already, you know, mentioned a couple of them. And then from a merchants's perspective, it's a BAU transaction. So they don't have to add another wallet, right?

>> What does that mean, by the way? BAU, >> business as usual. >> Got um and so they don't have to add another wallet, another checkout button, right? So it's just really simplifying the experience to make stable coins useful in the real world. >> Yeah, definitely. Yeah. And you've mentioned USDC quite a bit. um they found themselves in a bit of a precarious situation as of late due to an exploit which they did not freeze funds. Tether has came out and frozen funds. Uh we had uh Mike Mike Dudos on the show last week. He he he went on a crazy rampage against against Circle.

I'm curious, does Visa have any sort of preference on stable coins? How do you think about like uh Genius compatibility? Yeah. um versus not what what's your kind of dynamic between the two the two uh two leaders now. >> Yeah. So I mean there are a lot of coins a lot of chains and we are not in the business of picking winners. >> You're agnostic completely. >> Yes. And so we will work and and onboard a number of currencies. You know USDC is one of them. Um we can get into preunding a second pyd and and additional chains as well. So, ETH, Salana, you know, all of those and it goes through a very stringent process um to ensure you know those things

genius compatibility and um you know our normal onboarding process but even more um attention you know with everything happening in the the DeFi world. >> Yeah. Okay. So whether it's like a plasma one neo bank an etherf card bank a cast pudgy penguins um there's so many of these now. There's so many of these of these NEO banks now. You guys are agnostic. Whatever drives transactions, whatever can support the ability to get stable coins in the hands of more people, use them for payments, you guys are happy to basically >> kind of, you know, push that forward.

Um, what happens if we get to a world where this specific settlement line and we can kind of move off this, but this specific stable coin settlement line doesn't need to exist anymore such that the >> typical merchant will just accept stable coins direct. How does that affect Visa's kind of strategy? >> Yeah, definitely. Um, so I'll give you that example I I had before, right? Um, so you go to a coffee shop and and let's say or let's say a bodega, right? Um, you know, bodeas love accepting cash, right? Um, and so, you know, let's say, you know, they start accepting stable coins directly. Um, so that business is going to need to pay their employees.

They're going to need to pay for advertising for sure. They're going to need to pay their, you know, other suppliers and vendors. And so, that's where the stable coin link card comes in. Yeah. And then we also have other you know B2B offerings that you know we can support and we're looking to uh support as well just adding additional functionalities that our you know clients are looking for. So you know to your point yes in that you know direct uh stable coin to to stable coin flow there is an on-ramp and an off-ramp and we're playing you know both sides of that.

>> Yeah. Yeah. So, so my my Visa is cooked uh thesis is never going to is never going to happen because there's always going to be something unless we're like entirely on chain and we're just in even still I'm sure you guys are going to come up with something for us. >> Yeah. Yeah. So, yeah, we're we're exploring a number of you really interesting and exciting use cases. >> Yeah. Yeah. Good. What are some of those um like actual um like where has there been a outsized growth percentage-wise? Perhaps not uh perhaps not in terms of pure pure uh pure number growth or nominal growth, but in terms of like percentage growth as a business line of these that you've mentioned, has there been like one or two that have been

particularly growing faster than the others in the last 6 to 12 months? >> Very they're all seeing rapid growth. Yeah, I bet. So, you know, like I said before, um we are very early. >> Yeah, sure. You know, it's not even the first inning yet. Okay. >> Um and the runway is enormous. of these business lines are are growing rapidly. Yeah. One uh one that I'm, you know, really excited about is what we announced for Visa Direct for Stablecoin preunding and payouts. Okay. Um and so, you know, we're launching that pilot. Um we'll be live, you know, hopefully very soon with that. And and what that is is before, you know, I mentioned Visa Direct for cards, accounts, and wallets.

So, on the card side, that's your your normal uh Visaet rails, right? traditional card rails for accounts that's bank accounts and then digital wallets. What we've said is that clients can preund us in stable coins. And so what does that mean? So when you use Visa direct for account and wallet, >> you need to preund Visa so that we can use our network and ensure that those funds are there for a payout. So you know let's say that it's a P2P remittance, right? So that uh remitter that's originating the transaction let's say in the US will provide us money um that we will then pay out to you know

let's say Mexico and so we will use our network and our banking infrastructure to move those funds there so that the recipient of that remittance can receive those funds when they need them. Yeah. Um, so what we're doing is more of our Visa Direct clients are moving onchain and operating their treasury using stable coins. And so now what we're doing is when they preund us, they don't have to convert it back to fiat to preund us. They can send us stable coins directly, >> y >> we will convert that to fiat for them, you know, using orchestration and then move those funds in fiat for that payout. Yeah. So that can support B2B, B

TOC, >> P2P use cases, right? And then on the payout side, >> the client could preund us in fiat. And now, you know, I said before the 12 billion endpoints. We view stable coin wallets as a new endpoint. And so now they can't only reach uh accounts and digital wallets, but also now stable coin wallets. So they'll preund us in fiat. will convert it to stable coins and then push that out to a stable coin wallet. >> Yeah. Yeah. And so that is just going to solve any of the pain points that a more crypto forward business has for paying employees, for paying contractors, for crossber payments, um for for the whole

lot. So, so you guys clearly see you guys clearly see the development of stable coins as a technology as being uh important to facilitate more optionality with your customers and thus giving them a better experience at the end of the day because you're now unlocking let's say a new way to facilitate transactions that you know previously you would have to just do things you know in a very kind of like set way like we have you know we fiat on-ramp into a currency, then we'll swap it for you, then we'll give you the fiat to your bank. You're kind of just opening up optionality now. And then if I'm one of the recipients of this remittance, I can choose to get that in

stable coins from Visa. Um, which solves a lot of this like Western Union payment problem that a lot of people struggle with and fees and and uh delays and Yeah. >> Yeah. Yeah. And I mean we're we're just seeing a ton of demand all over the world for this. Um especially in those crossber instances, but you know a few that we're really excited about are uh creators. Okay. >> Um so you know let's say that you're a creator and and you want to be paid out immediately.

>> Um >> you can get that payout. Let's say you're a creator in a country that doesn't have great banking infrastructure. Yeah. You can now get that payout directly to your stable coin wallet. You don't need a bank account to do that. in these platforms um you know Tik Tok, YouTube, whoever it may be can pay out anywhere. The same thing is true for um gig workers. So you know your ride share drivers, right? They operate all over the world and to get those payouts to them, they want them immediately, right? So how can we do that? We can pay out to their stable coin wallet.

>> Yeah. Wow. Interesting. um when you're thinking about holistically where where you guys are uh you know very much excelling in this stable coin landscape and then where you're seeing a lot of direct competitiveness from other payment networks. What are those direct competitive angles that you're seeing from other other payment networks that are kind of innovation first here? The Mastercards, the Discovers, these types like where are you guys really going head-to-head? Yeah. No, so I think to to explain what it's doing, stable coins and blockchain, it's really just pushing innovation forward. Okay. And our role

as Visa is to support that interoperability between currencies, between chains, bridging the trady and DeFi worlds. And then also that trust layer. So, you know, going back to your stable coin link card example, those come with built-in controls that, you know, are not there yet in in the DeFi world. So, it's that, you know, user experience that everyone knows, loves, and trusts, right? Um, and that's really what we're trying to do. And there's there's so much room for growth that if we can apply those principles that have led us to be very successful in the trady world um you know there's there's an enormous runway out there and it's it's the competition is only really just

pushing that forward and accelerating that growth. >> Let me ask this differently Josh. Um, why is Visa dominating the cryptolink card market rather than any any of the other kind of payment networks and card providers out there? I've really yet to see many proliferation of anything else but Visa across all crypto cards. Anything from Crypto.com to a ether fi. Okay. Actually, Gemini has like a Mastercard credit card I think. Um, but I barely seen any. Why are you guys dominating this market specifically? So, did you guys move first on it? Do you have better tech? Why are you guys winning?

>> Yeah, I think it's it's Visa's reach and network, right? One, um, you know, we're the largest network. Um, and, you know, we want to play a role in the crypto space. So, we moved very early. We've been in the space for quite some time now and really view stable coin link cards as that way to offramp um, and then unlock all sorts of use cases. So, you know, one that we're really excited about and just going back to the B2B example, right? So, if you're a supplier and you know, you want to receive um your payment and operate your treasury in stable coins, um you know, that's a great opportunity for your platform to issue a stablecoin linked commercial

virtual card, right? And you can use that, your employees can use that. And we're just continuing to find new use cases out there from, you know, traditional payments to Agentic even. Another area that, you know, we're really excited about um and diving into. >> Yeah, let's talk about it. People are um people are, you know, conversing about whether agents will use credit cards, cards or >> stable coins. This is why I was saying like, oh yeah, Visa is in trouble because the the idea is the amount of microtransactions and micro payments and just the qu the sheer quantity of transactions conducted by agents at scale in the future uh is only going to

be able to be handled by a network that can support a massive scale. Now I say that from like this ivory tower considering Visa uh processes you know a magnitude an order of magnitude larger of transactions per second than the combination of all the blockchains in existence today. >> Um but the thesis is that you can just keep kind of creating more block space and you can keep kind of you know building more markets for these agents to operate in. But I anticipate you guys are able to just kind of scale your systems and scale your throughput. How why is Visa not going to be overwhelmed by Agentic payments? Why is this not going to swallow Visa's payment payment network up and cause serious issues?

>> Yeah. So, you are all really good examples and I think it's important to note that and I was saying this before with stable coins, you know, agents will definitely operate using stable coins, right? But in order for them to really be useful in, you know, the traditional um merchant landscape, that's where they need a card. >> So, you know, that's really what we're looking to do. These agents, you know, a lot of the activity is for trading, right? Um but if they want to make a payment um at a merchant, that's where this agent will spin up potentially a stable coin link card. Yeah.

>> And spend that at a merchant, you know, like like they would. Um, and we are really setting up a framework to be able to support that with these controls in place, fraud and risk protections that come with the Visa network. Um, and then also looking to support additional use cases. Um, you know, working like I said before with the number of chains, uh, currencies and and so on. So maybe a bit more of a pointed way and I and I really don't mean to be uh pushing pushing your buttons too hard here, but I was on a panel in KN with a Mastercard head of stable coin payments, etc. And he said like pretty much verbatim, there's going

to be a journalist out there that, you know, gets me in trouble for this, but card networks are not built for agents. We have serious work to do to get in front of this trend and um you know prepare ourselves for what agents are going to come for in terms of their needs for payments from the identity perspective, from the account holder perspective, from the sheer amount of transactions perspective. Um just push back here like why is this like is is he right? What are you guys doing to get ahead of this? Oh, agents can't have credit cards or cards because they don't have an identity. they they can only have a crypto wallet. Card networks are in trouble. You know, they won't be able to scale. You know, I'm kind of asking you the same thing here, but he he you

know, he he said that verbatim essentially, and it was like it definitely caught a lot of people off guard considering he was, you know, working at a at a car network. What is your >> what is your response to that? >> Yeah, that's really interesting. Um yeah, so I mean we are taking this space head on. >> Um and the opportunity for Agentic is just starting. Um and so the way that we are looking at it is how can we support our clients, issuers, acquirers, merchants use agentic technology to make these agents useful using a lot of the same controls and trust that Visa provides. Yeah. And so if you're a

business, you're probably not going to just give an agent um you know your your card number, right? No. And so that's really where you know our tokenization technology comes in. Um as well as the additional controls that we're setting in place with Visa intelligent commerce. Um so you know we're really exploring this area and getting ahead and starting to see some traction with a number of our clients. Yeah. And then also that linkage between Agentic and stable coins um is just going to continue to grow. So you know there's a lot more to come.

>> This guy's dialed this guy is dialed in. Um you know there's a there's a there's a school of thought that suggests that um in the future there will be this kind of growing amount of uh new types of chains blockchains by companies like Visa or separately more like large banks you know the JP Morgans the city banks these types and there's this kind of growing construct of thought that are a lot of Ethereum bulls take that is well JP Morgans is not going to want to use city's blockchain and build their technology at top there. And neither of them are going to want to use um you know uh US banks blockchain and then you

throw in Wells Fargo and Bank of America and you kind of just got all these disparit ecosystems where the promise of blockchain has been the composability. You know, that's kind of like the big benefit here. And so the Ethereum bulls will use this as a way to to suggest that rather than fighting over this uh disparit permission corporate block space, what's going to happen is that these companies are just going to use Ethereum or use kind of uh more directionally neutral substrates rather than a you know you know permission set of substrate. Then you've got like a company like Canton who you guys are a super validator of. Visa is whether that's you know in line with what you're working on or not maybe isn't so

relevant but it is a separate kind of construct of an idea that is almost like the epitome of what I was just saying of all these banks of coming on and having their own u they call them like almost like zones it's not a zone they have like a they have an interesting like global synchronizer and all these things and so um there's just like differing views of how large payment and fintech and financial services companies are going to come on chain. >> Y >> I would like to hear your personal view, but I'm sure you you you know you have to stay pretty PR friendly here, but like how is this going to play out? How would a company like Visa be thinking about this? What do you personally

think? Um yeah, just curious like how how you may you and your company may be thinking about this. >> Yeah. Um it's a really really good point and you know definitely something that we're discussing and and looking at and supporting our clients with every day. So to answer your question around how are we going to support all of these chains, every you know client that we work with has a different chain. That's really where Visa comes in. That's the interoperability that we provide today moving between fiat and stable coins and vice versa. Um and then supporting multiple chains all over the world. And so in terms of bringing these clients

onchain, that's something that in the triad fight world, I think, you know, you'll continue to see more and more traditional issuers um you know, really start to move into this space for all sorts of reasons. One, you know, treasury efficiency, you know, moving uh funds uh cross border, right? Um but then also supporting their clients as well. Um, and that's really what we're trying to achieve here. Um, with our multicoin, multi-chain approach and embedding that into our existing stack with Visa Direct, with stable coin link cards, with stable coin settlement. And so, you know, it really creates this

great um framework to move forward and support our traditional issuers, but then also provide the scale and reach to DeFi clients looking to play in the the Trady space. >> Yeah. So, then would you say that Visa launching its own chain or stablecoin would be somewhat prohibitive to the current business goals due to the conflict of interests of sorts? Yeah, I I think the the question is how do we support our clients? Okay. Just broadly and good anchor >> whether that is a specific chain for a specific use case. Yeah, >> that's what we'll you know do um and whether that's supporting multiple

chains for you know some BTOC payout um you know we can also do that. So, you know, really nothing's off limits. Okay. And it really just depends on the client, the use case, and trying to solve actual problems that exist with traditional Rails today. >> Yeah. So, um when it comes to the complete interoperability, there is uh also another school of thought and kind of getting off the Ethereum and the types of chains construct more into the stable coin liquidity and fragmentation school of thought here. There's this there's one school that's like you know what we're just going to use USDC or USDT for most all payments going forward in terms of let's say 10 years from now

merchants will accept these and then there's like there's another school that's like well actually once Genius Act gets through actually implement implemented we get more a bit more regulatory clarity there should be a world where there's going to be an Amazon stable coin and a Starbucks stable coin and a Walmart and a Costco stable coin and um you as a user would be interfacing with those stable coins specifically when using uh when when buying those products, right? And uh the problem there is obviously like well a US dollar is fungeible in the sense that your my one US dollar is the same as your one US dollar and that that means that we can spend any US dollar at any place in the world or you know at least

in the states and that that's not the case for my one Starbucks coin and my one Walmart coin because those are not fungeible in that same regard. Um and so that is like a deprecated UX compared to the current UX. So how how would you think about how that sol would a a solution to that construct come about? Like how would you guys think about that? Are you guys seeing anything like that? Yeah. >> Yeah. I I mean again it's it's just applying the same principles in the trady world to the DeFi world, right? So we have FX solutions supporting >> almost every currency in the world, right? And so when you move onchain, you're going to have, you know, merchant

Acoin, merchant Bcoin, this issuer has a coin, right? It's like the Oprah meme, you know, you get a coin, you get a coin. And >> that's really what we're in the business of is providing the interoperability between coins and chains, embedding them in our existing stack. Um, and then exploring new ways to make blockchain technology adds significant value for our clients. Whether that's um tapping into protocols on chain, whether that's um, you know, working with different partners all over the world. U, you know, that's really what we're doing every single day.

>> Yeah. Yeah. What do you think the advantages of like a Wells Fargo announcing that they're launching a stable coin are for Wells Fargo or like like what what are the advantages do would you see as like a for a bank to launch a stable coin? >> Yeah, I mean I think there's the the question of you know tokenized deposits or stable coins and you know when do you use each one? >> Sure. >> Um and you know that's what we're talking to our clients about every single day and and helping them you know explore that and what makes the most sense for their business. I think the the most obvious one is is really from a treasury management perspective in your internal operations. So a lot of what I think we will see in the future is stable coins operating under the hood.

So you don't actually really even know that a stable coin um is is doing this transaction. Um so you know one example might be the stable coin sandwich right? So, you know, what that means is, you know, you have fiat, you know, the issuer, merchant or whomever it may be is in the US and they want to move um their treasury over to another country. Um, you know, today in certain markets that might take a really long time, right? And it's costly um and you know, you don't have great visibility into that. And so in terms of improving their liquidity management, working capital, whoever the the business may be, that's where the stable coin sandwich comes in where you can have a wallet in country A

and a wallet in country B. Move those funds and then Visa has connectivity to a number of real-time payment networks and domestic schemes to help off-ramp on-ramp and then off-ramp those funds. >> Yeah. So, one thing on that, I'm curious how you're thinking about the reserve management practices that Visa would uh kind of have to, you know, start to think about when it comes to this um this product that you mentioned with with regards to me being able to give, you know, uh preund uh or sorry, give my stable coins to Visa and then you guys have this pre-unding product where you can pay out it. It can be used for P2P uh you know uh crossber payments or or

remittances etc. you you guys obviously already run 24/7 payment network, right? Like obviously on the weekend it's not like Visa is not going to spend my money. I mean it's you know everyone knows this. Obviously banks take take a little holiday there. Um but when it comes to the stable coin payment structure, does anything have to change from your reserve reserve management perspective of let's say it's a Sunday morning and I'm like all right Visa here's 10 grand of stable coins. I need this down to uh Guadalajara in Mexico like ASAP. Are you guys able to process that in non-banking hours? How do you guys kind of manage your reserves especially if you start to think about like really really big numbers or a lot of transactions?

>> Yeah. So, you know, we are talking with our treasury team every single day. Okay. >> And moving those funds in our network. It's called a Visa Payments Limited or VPL. That's really this banking, you know, network and infrastructure that we've set up to move these funds all over the world. Yeah. And so, you know, to answer your question directly, yes, stable coins can help, you know, improve some of those efficiencies, um, you know, and it's really again just improving the customer experience. So, if you want to preund us in stable coins, that's great. We can do that. You can preund us, you know, anytime, improving your liquidity um, and just optimizing that process. Yeah. And then if you want to receive stable coins, yes, we can, you know, use that same flow with the preunding and fiat and

then pay out 24/7 365 to that stable coin wallet. So those funds will land directly in that wallet, which is just a product that did not exist uh previously. >> Yeah. Josh, man, last thing. I mean, when you're thinking about your kind of current role, thinking about stable coin strategy holistically for a big public company with, you know, a ton of customers, trillions of transactions a year or perhaps still in the billions, but I'm sure it's trillions. Um, what is the what is the the biggest most important focus for you this year? like we are on the precipice of um you know we've got the secretary of treasury u

Scott Besson saying stable coins are going to reach the trillions by 2028. Um you know we're just seeing 40 to 50% year-over-year growth across the largest stable coins. We're in a crypto bare market and stable coins are still growing which is a actual rare nuance difference than any other bare market. So it's very clearly a a secular trend here. what is on your mind for delivering the best possible experience from Visa as we kind of close out here? What is your number one priority for this year? >> Yeah, it's a great point. Um, in terms of I'll give you three things that that we're really focused on. One is bringing our clients onchain. So whether you're a Tradi client or a DeFi client, we want to bridge that gap. Um, and we want to

bring them on chain and they can tap into, you know, the great benefits of DeFi and blockchain technology. We want a stable coin link card in every attached to every one of those wallets to make that stable coin spendable. And then lastly, incredibly focused on B2B. Um that is you know as I was saying before just an enormous you know $6 trillion opportunity right for you know those high friction crossber corridors and we want to support that flow using our stack um and continuing to explore that with you know our issuers merchants acquirers and you know different fintech platforms that we work with.

>> Amazing ladies and gentlemen Joshua Moss episode number 30 of stabled up. Thank you for being a part of it. Shout out to Fracks fracks. Finance episode 30 powered by our friends. This is Visa's stable coin strategy. Thanks Josh. >> Thank you.