Visa Joins USDG Stablecoin Network

This alliance marks the entry of a traditional payments company into a system designed to distribute interest generated by stablecoin reserves

Visa has joined the Paxos-led USDG stablecoin network, which also includes companies such as Robinhood, Kraken, Galaxy Digital, Anchorage Digital, Bullish, and Nuvei.

This move expands the initiative to integrate traditional financial giants into a system designed to distribute interest generated by stablecoin reserves among members who drive its usage and liquidity. The model contrasts with that of issuers like Tether and Circle, who retain the profits earned from their backing assets, and it proposes a more open and collaborative structure between tech and financial companies in the crypto sector.

Since 2021, Visa has been testing transactions on the blockchain using USDC on networks like Ethereum and Solana. The company is now betting on deeper integration with dollar-backed digital tokens, allowing it to maintain its presence in a sector that is evolving towards more decentralized and efficient financial solutions.

Paxos created USDG with the goal of launching an interoperable stablecoin network aimed at improving global liquidity and enabling the distribution of yields among cooperating firms. The arrival of traditional firms could help accelerate the adoption of stablecoins in defined regulatory markets.

Financial Sector Interest in New Regulatory Landscape

This move has implications for the legal and regulatory landscape of cryptocurrencies in the United States, where new legislation is being discussed to supervise these types of assets. Companies are seeking to integrate into new sustainable models that offer clear incentives and avoid legal risks.

On the other hand, the stablecoin market continues to be in motion. Binance has seen its USDC volume increase by 365% over the past year, which could allow it to surpass Coinbase’s $12 billion in USDC holdings, shifting the competitive landscape.

Finally, consortiums like USDG are attempting to lay new foundations for the use of digital currencies linked to the dollar, combining shared business models with greater connection between traditional financial platforms and crypto.