Visa expands stablecoin payment settlement to multiple blockchains

stablecoin payments are transferring digital tokens that are usually pegged to the US dollar through blockchain networks, changing the way value is transferred. Unlike standard financial systems that rely on correspondent banking networks and traditional settlement infrastructure, stablecoin transactions allow value to flow directly between digital wallets. These tokens can be exchanged back into local currency when needed.

How stablecoin payments work

Typical stablecoin payments begin when a company or individual obtains a stablecoin (such as USDC or USDT) through an issuer, exchange, or payment platform. After being deposited into a digital wallet, tokens can be sent through blockchain networks such as Ethereum, Solana or Polygon. Unlike many traditional payment systems, these blockchain networks operate 24/7, including weekends and holidays, providing uninterrupted settlement.

The process usually follows the following path: legal currency is converted into stable currency, digital tokens are transferred to recipients through the blockchain network, and finally converted back into legal currency if necessary. Banks, cryptocurrency exchanges and payment service providers are usually responsible for the exchange between stablecoins and traditional currencies, while blockchain serves as the settlement layer.

Step Description

1. Exchange of legal currency into stablecoins: Users exchange local currency for stablecoins on exchanges or platforms
2. Blockchain transfers: Send stablecoins through networks such as Ethereum, Solana, or Polygon
3. Recipients conversion: Recipients can convert stablecoins back to legal tender

When a payment is initiated, the transaction is broadcast to the relevant blockchain, where the verifier confirms its authenticity. After verification, the blockchain ledger is updated and control of the token is transferred to the payee. Depending on network congestion, this process is usually completed in seconds or minutes.

Major stablecoin settlement

Visa, as a mature global payments company, has implemented this settlement method on a large scale. Its growing stablecoin infrastructure now supports multiple blockchains. Recent analysis points out that Visa is working hard to expand the use of on-chain settlement technology to simplify cross-border and domestic capital flows for partners and customers.

In cross-border payments, companies can exchange U.S. dollars for USDC and send tokens to overseas partners, who will convert them into local currency as needed. This approach significantly reduces some friction and delays compared to traditional international transfers, but does not completely eliminate intermediaries or compliance requirements.

Ripple adopts a similar settlement structure in its partnership with global payments company Conva. In these arrangements, fiat currency is first converted into stablecoins for blockchain transfers, and then paid in fiat currency at the recipient.

Opportunities and Limitations

Although blockchain settlement can quickly process transfers, the complete payment process often relies on compliance reviews, foreign exchange conversions, and integration with banking systems. This means that stablecoins help reduce some friction, but do not eliminate every layer of intermediaries in international payments. Therefore, it is more accurate to view stablecoins as a new payment infrastructure that runs parallel to banks and traditional financial network services, rather than a substitute.

stablecoins can also serve as behind-the-scenes support for existing payment products. For example, cards associated with stablecoins allow users to spend using digital assets, while merchants still collect payments in local currency. Industry analysis tracks the rapid growth of these types of encryption cards, which integrate blockchain settlement technology without fundamentally changing the merchant experience.

stablecoins are best understood as a new payment trajectory: They change where and how value is settled, allowing tokenized dollars to flow around the clock, while banks and fintech companies continue to manage custody, compliance and fiat currency conversions. The main innovation brought by stablecoins is not to replace the traditional financial system, but to its position for transfer settlement. Tokenized dollars can be moved faster and more flexibly across blockchain networks, while core functions such as compliance and local currency conversion remain carried out by banks and fintech providers.