The Future Development of Stablecoins: From Regulation to Popularization

The U.S. Senate recently passed the GENIUS Act, marking an important step forward in the regulatory framework for stablecoins in the United States. Jack Forestell, Visa's Chief Strategy Officer, commented on this, outlining Visa's perspective on the future of stablecoins.

Forestell believes that the "GENIUS Act" could become a significant moment in the history of payments. While stablecoins represent new opportunities for programmable digital currency, a great deal of work is still needed to achieve scalable applications. Building trust in new payment technologies takes time and requires collaborative efforts across various aspects such as security, reliability, and fraud protection.

To become the next generation of digital payment infrastructure, stablecoins need to be implemented at three levels:

1. Technical Layer: A robust and scalable technical backbone is required to securely and reliably handle large-scale transactions.

2. Reserve layer: Trust in the value and stability of the exchange medium needs to be established.

3. Interface Layer: Requires a ubiquitous interface to provide trust, rules, and value for both parties in a transaction, covering billions of users.

The stablecoin infrastructure itself cannot solve the interface layer issues. If these cannot be resolved, stablecoins will struggle to achieve widespread adoption.

Visa has built the largest and most trusted third-layer payment system in the world. Through the "Visa as a Service" stack, Visa provides a seamless and secure payment experience for billions of users globally. Since 2020, Visa has facilitated nearly $100 billion in cryptocurrency transactions.

Visa believes that stablecoins have found product-market fit in the cryptocurrency trading market. In emerging markets, stablecoins represent significant opportunities, especially for users in small currency countries who find it difficult to access US dollars, as well as in cross-border payment scenarios.

Currently, the advantages of stablecoin payments are not yet apparent in developed markets. The "GENIUS Act" brings regulatory clarity to stablecoins, opening up potential avenues for further application. Visa is actively developing various stablecoin solutions, including providing local stablecoin settlements and cross-border capital flows.

Overall, stablecoins still require time to achieve large-scale application, but this process has already begun. In the future, stablecoins are likely to make breakthroughs first in emerging markets, bringing huge opportunities for improving financial efficiency.