A seismic shift is underway in the world of digital payments. Long-dominant giants like Visa Inc. and Mastercard Inc. now face serious disruption from stablecoins, the dollar-pegged digital currencies championed by crypto startups and tech firms. These new players aren’t knocking gently—they’re kicking in the door with promises of lower transaction fees, faster settlement, and the ability to bypass traditional banking and card networks altogether.
Merchants, saddled with high swipe fees and slow settlement, have started to pay attention. Last year alone, U.S. businesses paid an estimated $187 billion in swipe fees, the vast majority of it routed through Visa and Mastercard’s legacy systems. Now, stablecoins offer an attractive alternative: near-instant settlement at a fraction of the cost, all without a bank or card processor standing in the way.
The Threat Becomes Real
Stablecoins have hovered on the fringe of the financial mainstream for years, mostly associated with speculation or crypto trading. But now, they’re inching into the heart of retail and business transactions. With names like USDC, PYUSD, FIUSD, and USDG, these tokens promise the stability of fiat currency with the efficiency of blockchain infrastructure.
Consumers using stablecoins can pay merchants directly from their crypto wallets, sidestepping the complex, multi-party chain that powers credit and debit card payments. For many small and medium-sized merchants, this means faster cash flow and less revenue lost to processing fees.
Christian Catalini, founder of the MIT Cryptoeconomics Lab, explained the threat clearly: “Stablecoins could reshape the payment landscape and disintermediate traditional finance. But card networks won’t surrender their dominance without a fight.”
Visa and Mastercard Respond
Visa and Mastercard recognize the stakes. Instead of dismissing the threat, both companies have launched strategic pivots, positioning themselves as the essential infrastructure for all forms of digital transactions—including the very stablecoins designed to bypass them.
Executives have leaned into stablecoin innovation, touting crypto-linked cards, blockchain-based settlement systems, and cross-border payment tools. These initiatives align with growing merchant demand for faster, cheaper global transactions—use cases where stablecoins already shine.
At Visa, Chief Product and Strategy Officer Jack Forestell emphasized that Visa doesn’t view crypto as a threat—it views it as a form of value it can integrate and tokenize. “We’ve been tokenizing access to value for a long time,” Forestell said. “Whether that value is tied to a credit line, bank account, or stablecoin doesn’t matter—we provide the on-ramp.”
Big Moves Behind the Scenes
Both Visa and Mastercard have accelerated partnerships and investments in stablecoin infrastructure in 2025. Visa Ventures recently backed BVNK, a company that helps institutions issue fiat-backed digital tokens. This move allows Visa to stay at the center of stablecoin activity—even if those tokens threaten its traditional revenue streams.
Meanwhile, Mastercard joined the Paxos Global Dollar Network, enabling stablecoin minting and redemption across its ecosystem. Mastercard now supports several major stablecoins including USDC (Circle), PYUSD (PayPal), and FIUSD (Fiserv). It also offers tools that let consumers choose how payments get routed—a checking account for small purchases, a credit line for larger ones, and a crypto wallet for cross-border payments.
Jorn Lambert, Mastercard’s Chief Product Officer, underscored the vision: “We’re not trying to replace existing systems. We’re building new use cases—especially in remittances, business payments, and disbursements—where stablecoins shine.”
A New Era for Merchants
Merchants, always eager to trim costs, have started to test stablecoin integrations. Retail juggernaut Walmart Inc. is reportedly considering a stablecoin pilot program. Shopify Inc., already at the forefront of e-commerce tools, partnered with Stripe and Coinbase to accept USDC, Circle’s popular dollar-backed stablecoin.
The new system lets merchants receive payments directly into a crypto wallet or convert them instantly to fiat and deposit into a bank account. Because blockchain handles the settlement, payments clear within seconds—and avoid Visa or Mastercard entirely.
To incentivize adoption, Shopify launched a 1% cashback offer for consumers who pay with USDC, with rewards also paid in USDC. Coinbase, seeking to normalize stablecoin use across the internet, launched a dedicated payments platform for ecommerce providers.
Challenges to Mass Adoption
Stablecoins hold promise, but they don’t offer an immediate replacement for credit and debit cards—at least not in every context. U.S. consumers remain accustomed to credit perks, fraud protection, and cashback rewards—benefits that blockchain wallets currently can’t match at scale.
Many users don’t understand stablecoins, and crypto still carries reputational baggage. Stablecoin balances lack FDIC insurance, and regulations differ across jurisdictions. For merchants, onboarding crypto payment systems could mean new compliance risks, tax complexities, and operational changes.
Even so, digital payment advocates argue that the benefits will outweigh these challenges in the long term.
Stablecoins Gain Government Attention
The U.S. government has started to pay attention. Lawmakers are preparing legislation that would create formal federal oversight of stablecoin issuers. President Donald Trump has signaled plans to sign the bill into law. Regulators hope this oversight will legitimize stablecoins, protect consumers, and encourage broader adoption without stifling innovation.
With regulation on the horizon, card networks see an opportunity to play both sides: work with stablecoin providers to enable growth, while positioning themselves as secure, scalable infrastructure for whatever form of money the future brings.
The Strategy: Co-opt and Control
Visa and Mastercard have a proven history of neutralizing threats through co-option. When fintech disruptors like PayPal, Square, and buy-now-pay-later startups entered the space, the card networks quickly absorbed them into their ecosystems.
By integrating stablecoins and promoting their own tokenization services, Visa and Mastercard hope to control the rails, regardless of what form the money takes. This strategy allows them to preserve pricing power and relevance, even as competitors innovate around them.
Scott Bessent, U.S. Treasury Secretary, projects that the stablecoin market, now valued at $253 billion, could reach $2 trillion in just a few years. That forecast only raises the stakes.
The Consumer Shift Begins
Despite institutional inertia, the wheels are already turning. Consumers who previously viewed crypto as speculative now recognize stablecoins as useful digital cash. Merchants want alternatives to card fees. Fintech developers are building new checkout experiences that completely bypass card rails.
Richard Crone, CEO of Crone Consulting, summed it up: “Consumers rarely change payment habits overnight, but this time, the shift is inevitable. The economics are too compelling.”
A Digital Future Takes Shape
The payments battlefield has expanded. Visa and Mastercard still control over 85% of U.S. card spending, but the rules of the game are evolving. Card networks now face competitors that don’t need legacy infrastructure and don’t play by legacy pricing.
Stablecoins represent more than just innovation—they represent the first real alternative to the global credit card cartel. Whether Visa and Mastercard adapt or absorb, they will not ignore the threat.
This turf war isn’t just about payments. It’s about who controls the future of money—and whether that future runs on plastic, fiat, or blockchain.
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