According to the announcement published on July 16, VSP was designed as an all-in-one environment that enables financial institutions to deploy stablecoins without having to build their own blockchain infrastructure.
The platform allows clients to mint and burn tokens, store assets, process transfers and convert stablecoins. It also includes integrated wallet services, blockchain connectivity, on-chain wallet management and several enterprise-grade security features, including dual approval, audit logs and whitelists of authorised addresses.
VSP is directly connected to Visa’s existing payment network, allowing banks and fintech companies to integrate stablecoins into treasury management, payment and settlement operations without replacing their current core infrastructure.
Jack Forestell, Visa’s Chief Product and Strategy Officer, said the main challenge is no longer whether institutions understand stablecoins, but whether they can operate them within the traditional financial system. Visa aims to provide the infrastructure layer connecting these two environments.
According to Fortune, Visa currently serves around 15,000 financial institutions and more than 200 million merchant locations worldwide. The company has already processed billions of dollars in stablecoin settlement transactions and expects VSP to accelerate the expansion of this business.
Since 2021, Visa has supported settlement in USDC, added stablecoins such as USDG and PYUSD, launched crypto-linked payment cards and expanded blockchain-based cross-border payment services.
Visa Selects Open USD as the First Supported Stablecoin
Visa has chosen Open USD (OUSD) as the first stablecoin supported by the new platform. OUSD is being developed by Open Standard, a recently established alliance involving more than 140 companies, including Visa, Mastercard, Stripe, BlackRock, Coinbase and other major financial and technology businesses. The stablecoin is expected to launch later this year.
Open USD is based on a different economic model. Businesses will be able to issue and redeem OUSD without fees or transaction volume limits. Almost all income generated by the reserve asset portfolio will be distributed among participating partners after the deduction of a small management fee.
For years, stablecoin issuers have generated most of their revenue from yields on US Treasury securities and other short-term assets backing their tokens. As US interest rates increased, this income became highly profitable, allowing companies such as Circle and Tether to report billions of dollars in annual revenue.
Open USD redirects most of this income to distribution partners, including banks, payment companies and fintech platforms. In other words, competition is shifting away from which company issues the largest amount of stablecoins towards which network offers the most attractive revenue-sharing model.
This is also one reason Circle shares have remained under pressure since Open Standard was announced. The stock declined further following Visa’s latest announcement as investors became concerned that USDC’s competitive advantage could weaken if financial institutions adopt the new revenue-sharing model.
Сonclusion: Visa’s new platform could accelerate stablecoin adoption among banks and fintech companies by connecting blockchain assets with traditional payment infrastructure. Open USD’s revenue-sharing model may also increase competitive pressure on established issuers such as Circle.
