One aspect I don’t see discussed enough in the "stablecoins vs. Visa" debate is cross-border payments. There is a reason why Visa $V reports cross-border payments as a Key Business Driver in its earnings reports.
✔️ If I use my card (issued by a bank in Estonia) in, say, the U.S., Visa has to move money from my bank in Estonia to the merchant's bank in the U.S. to settle this transaction
✔️ This involves using various payment rails and correspondent banks. Hence, cross-border payments have a surcharge (e.g. a 1.5% extra charge for international cards)
✔️ Stablecoins are global. My stablecoin-denominated funds aren’t tied to any particular country and don’t need to cross borders when I use them abroad.
✔️ So stablecoins not only eliminate many of the costs associated with cross-border payments, they eliminate the need to move money across borders altogether.
It's not only Visa and Mastercard, btw. Cross-border payments are important for PayPal too!
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Reading about the Coinbase Commerce Payments Protocol that will power USDC on Shopify. If I understand correctly, the protocol allows implementing rules similar to the rules currently enforced by Visa and Mastercard:
✔️ The protocol introduces two concepts: "Escrow" and "Operator"
✔️ Funds from payers are collected into the "Escrow" before being transferred to the merchant
✔️ The "Operator", which can be an "advanced smart contract", facilitates the transfer of funds from the "Escrow" to the merchant (or back to the payer)
✔️ "The protocol is not concerned with how the operator is implemented and just recognizes it as an address"
...so Visa or Mastercard can build their own "Operators" that implement the scheme's rules through smart contracts.
How cool is that?!!!
$COIN $V $MA