Visa’s Search for a New Partner in Stablecoin Settlements
Visa is on the lookout for a new partner specialized in stablecoin settlements and over-the-counter (OTC) transactions, following Mastercard’s recent acquisition of BVNK, which previously performed this function for them. According to a report released on August 18, Visa’s search focuses on finding a provider with cryptocurrency exchange licenses in significant markets including the United States, Canada, the United Kingdom, and Singapore.
Criteria for Partnership
The criteria for this potential partnership is extensive, as Visa’s documentation indicates a need for supportive services across multiple stablecoins, encompassing transaction swaps and settlement capabilities. The chosen partner would facilitate transactions linked to Open USD, a stablecoin initiative developed by Visa. As of now, Visa has refrained from commenting on its solicitation process, and details about possible candidates or a definitive timeline for selection remain unclear.
This search for a partner emphasizes a distinct focus on U.S. regulatory standards, as it necessitates a provider that holds the appropriate licenses for operation in four of the world’s major financial hubs, rather than relying on a fragmented network of regional associates. Reportedly, Visa has zeroed in on a potential candidate for the role, although their identity has yet to be revealed, and there is currently no indication that Visa has finalized the choice or entered into any binding agreement with them.
Services Sought by Visa
The services Visa is seeking extend beyond simple token transfers; they want a firm that can facilitate stablecoin conversions, deliver institutional liquidity, and manage settlements across various regions. This set of requirements is likely to narrow the field to well-established infrastructure suppliers with the necessary licensing, banking ties, and liquidity management capabilities. Visa appears intent on securing a comprehensive service rather than piecemeal arrangements in different jurisdictions.
Impact of Mastercard’s Acquisition of BVNK
Mastercard’s acquisition of BVNK was finalized on August 3 and is expected to enhance its capacity for stablecoin transactions and associated operations. Initially announced in March with a potential valuation of up to $1.8 billion, BVNK reported handling approximately $30 billion in annual payment volume at the time.
The takeover means BVNK is now under the umbrella of one of Visa’s main rivals, raising questions about its previous role as Visa’s stablecoin settlement partner. Neither Visa nor BVNK has addressed how this shift impacts their former business relationship. Furthermore, Visa commenced a new partnership with ZeroHash on August 5, which enables eligible Visa Direct users to utilize stablecoins for funding accounts and payouts. However, the new search for a partner appears to seek even broader operational capabilities and geographical reach, outpacing what is offered with ZeroHash.
Visa’s Stablecoin Platform
Earlier this year, Visa introduced its Stablecoin Platform, designed to provide institutions the means to access, issue, redeem, and transfer stablecoins, launching initially with Open USD as its supporting asset. This platform aims to integrate with selected clients beginning beta testing.
The timeline for when Visa might finalize a partner or enhance its settlement services through this request remains undisclosed. The prospective provider would also need to be compatible with Open USD, a collaborative creation by Visa, Mastercard, and Coinbase, which has garnered interest from over 140 associated firms. Reports suggest that Visa is pursuing a strategy that involves multiple stablecoins rather than focusing solely on Open USD, aligning with their criteria for a partner.
