Author: Zennon Kapron Compiled by: Vernacular Blockchain

The most difficult problem to solve for a stable currency has never been cryptography. Tether and Circle have solved the engineering problem years ago: a fixed dollar, callable, and transferable in seconds. The real unsolved problem is getting users and merchants to want to use it; and that's probably what Visa and Mastercard have been doing for sixty years. Because of this, they are entering the stablecoin space, which may block Circle more than any opponent it has encountered.

On June 3, CoinDesk reported that Stripe, Visa and Mastercard were close to launching a shared stablecoin platform, and Coinbase was also weighing whether to join. So there is no official agreement yet, and Fortune even noted that the relevant parts may not even be signed yet. , these details should still be regarded as early information; but the strategic logic supporting this action does not depend on whether these Silk Roads are confirmed one by one.

Market concentration and the temptation of “float”

The key to the market is not the issuance of coins, but the stable issuance of coins, which is a highly concentrated business. The entire industry is about $325 billion, of which companies account for about 80% of the contribution: Tether’s USDT is close to $115 billion, and the circle’s USDC is about $76 billion. This concentration presents itself as an opportunity for any card organization planning to issue.

A major issuer that has neither a real consumer brand nor a merchant acceptance network nor a balance sheet relationship with the global banking system controls most of the "float" in this market. What the issuer sells is a Token; why are online merchants willing to accept it, and why are banks willing to distribute it? This is an asset that Tether and Circle can’t buy, and that Visa and Mastercard are already quickly grasping.

The more core object of competition is actually the reserve income behind stablecoins. The reserves supporting stablecoins are usually placed in short-term U.S. debt and cash to generate ongoing interest; based on the current market volume, the annualized income of this part is close to nearly 100 million U.S. dollars. The GENIUS Act prohibits the issuer from paying this portion of interest to Stablecoin South, so the final proceeds will belong to the issuer and the party that controls its circulating portion. Basically, their core business is to get a few cents out of every dollar of card swiping fees; if they can now simultaneously control reserves and retain these balance income through stable coins, it is equivalent to opening a new income line on another payment track. This alone is enough to prove a strong motivation for coin creation.

High concentration also means another thing: as long as a new entrant has real distribution capabilities, it may quickly seize market allocation. Because most users only hold the compliant USD Token displayed on the App or default trading platform they are in, and have no ultimate loyalty to a certain stablecoin itself. People often hold USDC or USDT just because they happen to be in front of them; and if a stable alliance can be placed in front of more people, this itself is its entire strategy.

A series of acquisitions have sent signals in advance

Maintenance of the layout has only begun in the last few weeks.

Stripe completed its acquisition of stablecoin infrastructure company Bridge in February 2025 for $1.1 billion.

Mastercard agreed in March 2026 to acquire the stable payment currency company BVNK for up to US$1.8 billion, which was also its largest expenditure in the digital asset business transaction.

Visa split its stablecoin settlement across nine blockchains in April and said the project has reached an annualized run rate of $7 billion, up 50% quarter-on-quarter.

These actions are essentially completing the key components of the coin issuance stack: reserves, settlement capabilities, and on-chain channels. A company will take the initiative to put these parts together one by one, which often means that it is not satisfied with just providing "supporting services", but is preparing to issue its own Token.

The bidding history behind these transactions also illustrates how fierce competition is for this land. Mastercard acquired BVNK, the same company Coinbase was close to acquiring for about $2 billion late last year; after that, Mastercard also explored acquiring crypto company Zerohash for $1.5 billion to $2 billion, but ultimately fell through. The implication is that BVNK was valued at just $750 million in its previous funding round in December 2024, and less than eighteen months later, Mastercard's offer was more than double that. The company will not raise the price all the way up to this level just for a marginal capability.

Why it is the distribution, not the Token itself, that really determines the outcome

Stablecoin issuance is roughly divided into three layers: minting and reserves, blocks carrying Token circulation into the chain, and the issuance network that brings Tokens into real trading scenarios. Tether and Circle involve strengths in the first two layers, but the third layer has always been their weak link. The circulation scenario of USDT is mainly concentrated on trading platforms and overseas dollar demand. USDC is highly dependent on Coinbase as a partner. None of the issuers are truly embedded in the corner store’s checkout counter, nor in a bank’s payments stack; that’s exactly what Visa and Mastercard own directly.

The coverage radius itself is an asset. Visa currently operates more than 130 stablecoin-linked card programs in more than 50 countries and can complete settlements on 9 blockchains. Jorn Lambert, chief product officer at Mastercard, also defined the acquisition of BVNK: to gain access to the tools needed to fear new markets and clearly name cross-border remittances.

Tokens without the ability to issue only need a database record; Tokens that are connected to the relationship network between merchant terminals and banks will become payment tools that millions of people can directly consume without paying much attention to which currency is used.

The "Genius Law" further amplifies this point: when the law fixes reserve, repayment and license standards, a US dollar-standard Token will become a standardized commodity, and any qualified issuer will produce it according to approximately consistent specifications. Once a currency is standardized, competition shifts to who can get it in front of the most merchants and depositors. An alliance currency that has been integrated into the global trade card organization network since its birth has a natural advantage in the competition; while Loop spent a lot of time and even completed the listing, it truly has this ability on the same scale.

Why is it not Tether that is more dangerous, but Circle

The GENIUS Act itself is one reason why Circle is exposed to vulnerability. It turns compliant USD Tokens into commodities that can be copied by setting deposit, redemption and licensing rules. The advantage of Circle is that it appears earlier and is more compliant; but when "compliance" becomes a waistline that all players must meet, the premium brought by "first mover" will quickly shrink. On the day the news of the alliance broke out, Circle's share price no longer fell by 4%, and Coinbase, which is deeply tied to USDC's economic interests, also fell simultaneously; on the same morning, the share prices of Visa and Mastercard also fell by more than 2% each.

The alliance may not succeed

Of course, this plan could still fail, and it's not like these networks haven't failed in similar situations in the past. Similar companies have launched related and then quietly withdrawn digital currency projects over the years; and a common stablecoin project jointly held by Visa, Mastercard, Stripe, and possibly Coinbase also requires four competing parties in a variety of ways to agree on directional governance, revenue distribution, and control rights.

Regulation is another level of denial. The joint issuance of stablecoins by dominant card organizations will almost certainly lead to the same manipulation as the market concentration and antitrust issues faced by these networks; and the institutional structure of the GENIUS Act itself is also more biased in favor of banks and issuers, which means that the card organization alliance must find ways to circumvent or circulate this path.

However, these uncertainties will not make the project meaningless, they will only make the structural design and implementation time more difficult to judge. Therefore, the most important thing right now is not whether the rumors are 100% accurate, but that the general direction is quite clear. Coinbase actually made a bet at the same time: shortly last year, it launched a white-label stablecoin service and a stable payment product for enterprises. On the one hand, it continues to share the economic benefits of the circle, and on the other hand, it supports its own payment track.

The situation with Tether is different. Its dominant position is mainly based on the demand for U.S. dollars outside the United States, especially in emerging markets; network-based stablecoins targeted at local payment scenarios in the United States and regulated by the United States will inevitably be exposed to this demand. The one that really stands on the "home court" of Visa and Mastercard is actually Circle, so it is also the party most likely to lose the most.

From a more macro market perspective, a stablecoin promoted by a card organization will not only bring pressure to the circle, but will also further push the stablecoin from a "crypto asset" to a "common payment tool." Once the core of competition shifts from original and opportunistic relationships to incorporating capabilities and trust, the natural advantage will be concentrated in the hands of those players among consumers, merchants and banks - which is almost the definition of card organizations.

These judgments do not mean that the alliance will go online smoothly, nor does it mean that it will be successfully implemented. However, the strategic logic of the system is not based on the current anecdotal evidence, but is based on one thing that has been repeated over the past decade: in the world of stablecoins, the part of the currency market itself that is easily copied, what is really scarce is the reason "why people should use it", and this is in the hands of the payment network.

It can be said that the window has opened. One year after the GENIUS Act was implemented, the compliance path has become louder, and card organizations have done enough to fight for the necessary parts. Stablecoins have also begun to pay attention to them from a niche in the crypto world, and have entered this stage where banks and merchants have begun to pay serious attention. Whoever can act first when the market is formed will have the opportunity to set the default rules that latecomers will have to inherit; and the company with the strongest strength at least does not have to continue to wait.

These networks have also tried and failed to experiment with digital dollars. This time, what they bring is a core asset that issuers cannot replicate in a short period of time: a local reason that merchants in the past were willing to accept and consumers were willing to spend. If this alliance project really comes to fruition, what determines the future of Circle may no longer be USDC itself’s poor performance, but be controlled. And that’s an advantage Circle can’t buy back from Visa and Mastercard.