Visa and Mastercard Back New Dollar Stablecoin to Rival Tether and USDC
A coalition including Visa, Mastercard, and crypto firms is launching a shared US dollar stablecoin that retains reserve earnings for its members.
A significant new entrant is taking shape in the stablecoin market, with Visa, Mastercard, and a coalition of cryptocurrency companies joining forces to launch a jointly operated US dollar stablecoin. The venture marks a notable escalation in traditional finance's commitment to digital dollar infrastructure — moving beyond mere payment-rail partnerships into direct stablecoin issuance.
What distinguishes this project from existing offerings is its reserve-earnings model. Unlike arrangements where a single issuer captures the yield generated by holding Treasury bills and other reserve assets, this consortium structure keeps those earnings distributed among participating institutions. In an era of elevated interest rates, reserve income has become one of the most lucrative aspects of running a stablecoin — Tether, for instance, has reported billions in profit driven almost entirely by this mechanism.
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The competitive implications are considerable. Tether's USDT and Circle's USDC currently dominate the stablecoin landscape by market capitalization, benefiting from deep liquidity, broad exchange integration, and years of institutional trust-building. A consortium backed by two of the world's largest payment networks brings instant credibility and enormous existing merchant and bank relationships — assets that pure crypto-native issuers have spent years trying to cultivate.
The timing is also telling. Stablecoin legislation is advancing in the US Congress, and regulators are increasingly scrutinizing reserve transparency and issuer accountability. A project anchored by regulated, publicly accountable financial giants like Visa and Mastercard could find itself better positioned to satisfy emerging compliance requirements than offshore or lightly regulated competitors. For consumers and businesses, more competition in stablecoins could ultimately mean tighter spreads, better transparency, and more resilient dollar-pegged infrastructure.
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