The Role of Stablecoins in Modern Payment Systems

Mastercard and Visa are revolutionizing the way money is transferred across the globe. With vast networks, these companies are integrating stablecoins to tackle common financial challenges.

Mastercard’s Imperative: Instant Payments

Mastercard Move, a robust money movement platform, enables transactions to bank accounts, cards, digital wallets, and cash locations in over 200 countries, spanning more than 150 currencies. Recently, the ride-sharing giant Uber has expanded its collaboration with Mastercard to facilitate real-time payments for its drivers and delivery partners.

Despite this impressive capacity for instant monetary transfers, the question remains: why does Mastercard see a need to incorporate stablecoins like SoFiUSD and USDC?

Understanding the 'Ready-to-Pay' Dilemma

To execute global transactions seamlessly, companies need to ensure they hold liquidity in each respective locale. For instance, Uber's drivers operate in various countries, each preferring different currencies, such as dollars, pounds, or pesos. Companies must maintain a “ready-to-pay state” which means having the right amount of funds readily available in various currencies.

This approach can be tricky. Businesses must ask several questions:

• How much money is needed in each country?
• What are the current exchange rates?
• Are banks operational on weekends?

Holding excessive funds can tie up resources that could be used elsewhere. Conversely, insufficient funds can lead to delayed payments, complicating the cash flow.

How Stablecoins Transform Money Movement

This is where stablecoins come into play, allowing funds to be moved efficiently across borders. Instead of pre-funding various currencies worldwide, stablecoins facilitate timely transfers, which enhances liquidity management.

Rather than holding large fiat amounts around the world, businesses can employ stablecoins to fulfill obligations only when necessary. When paired with existing delivery systems like Mastercard Move, businesses can convert stablecoins into local currency effectively.

This process supports sending stablecoins; however, it doesn't finalize payments in local currencies. Recipients will still need to convert the stablecoins to actual money through banks or payment services before they can access their funds in pesos, reals, or yen.

Visa’s Similar Challenge and Solution

Visa faces comparable challenges with its own extensive network, Visa Direct, which provides access to over 18 billion destinations across 195 countries and regions. In fiscal year 2025, it is projected that Visa Direct will process over 12.5 billion transactions.

Both companies are evolving from traditional card services to entities that enhance various global payment processes. They are adopting stablecoins as integral components for improving speed and flexibility in money transfers.

Visa's Pilot with Stablecoins

In a significant move, Visa initiated a pilot program in 2025 to utilize stablecoins for pre-funding international payments through Visa Direct. This innovative approach was moved into commercial operation in October 2026. Companies can now use USDC to prepare funds necessary for remittances in real-time.

The flow of funds works as follows: Company → Pre-fund with USDC → Visa Direct → Local Bank/Card/Wallet → Recipient. This model simplifies the payment process and eliminates the need for recipients to manage stablecoins directly, allowing for a seamless transaction experience.

By managing only stablecoins until payment is imminent, businesses can significantly reduce the risks associated with currency fluctuations.

Why Multiple Stablecoins Matter

Mastercard and Visa’s interest in stablecoins is clear; they want to streamline the flow of money to numerous exits available through their networks. As stablecoins provide an effective alternative for managing transactions continuously, they help address liquidity challenges.

While Visa actively uses USDC, Mastercard has opted to support SoFiUSD as well. This raises the question: why diversify their stablecoin involvement?

Each stablecoin may serve different market needs, thus reflecting distinct strategic approaches to digital currency. The landscape is evolving, and there is a lot to explore regarding the hidden intricacies of stablecoin strategies.

Next time, we will delve into the specific roles and relevance of SoFiUSD amidst the growing stablecoin ecosystem.