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.
✔️ 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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