Sirwin
Sirwin
VISA increase it´s stablecoin use, could send ripples over the entire crypto industry

VISA increase it´s stablecoin use, could send ripples over the entire crypto industry


VISA is exploring USDC on the Solana network, let us see if we can learn why and what impact it might have for the future.


USDC on Solana and why VISA is looking to adopt a stablecoin

Most likely exploring USDC, or any stable coin for that matter, is a way to explore if the blockchain can be used in a cost-cutting way for the credit card company. As they are one of the two biggest companies that perform around 1,700 transactions per second.  That means that even if they are able to save only $0.0001 USD in cost per transaction. It would compound to over $600 in just an hour. And over $5 million in a year. That means that even fractions of dollars mean huge money for them given the share volume of transactions they perform.

And given the fact that the Solana Blockchain has one of the cheapest transaction fees, sitting at around $0.000125 it means that Visa presumably will be lowering the cost per transaction on their end. And if we take a look at what they charge vendors these numbers are at 1.15% + $0.05 to 2.4% + $0.10. If we then do a little math, we see that Visa charges vendors anywhere from $2,680,560,000 to $5,361,120,000 just in flat fees. And if we play with the idea that all the transactions with VISA get done with the stablecoin. That would put their transaction cost at a measly $6,701,400.  And that would mean VISA would be extremely profitable. Presumably allowing them to muscle out their competitors, or simply just bank all the extra cash.

And sure, these are just hypothetical numbers. And there of course are other costs and factors to consider. Like the fact that not all transactions are done in USD. But it should still give you an indication of the amount of money we are talking about. And if we add the the fee charged depending on the size of the transaction we can see these numbers skyrocket even further. In 2016 the worldwide average transaction on VISA was $80. It will add anywhere from $49,727,692,800 to $103,779,532,800 to the previous numbers. 

So all in all there is a lot of potential for VISA to really make their operation as efficient as possible. Meaning more money for them. And if I have learned anything it is that companies like money. They are more or less willing to do anything for it.

How will this impact the future?

There can be some real major impact waiting to happen in the near future if VISA´s dabble with USDC proves a success. One of the biggest things is that it would more or less set up SOLANA for life. As this would mean a permanent demand for the $SOL coin given the share amount of transactions we are talking about.

But it could also possibly mean good things for crypto in general. As VISA adopts USDC, the vendors will also have an incentive to do so. As it would mean they would save money because they would not have to pay the conversion fee with every transaction. This in turn would mean they now have a lot of USDC among their assets. And if you are in a country where the inflation is high that means they will be saving money. As they have USDC instead of their native highly inflationary currency. Potentially this could then be an advantage they could pass on to their employees, paying them in USDC directly. 

All in all, I see that crypto adoption would significantly rise from this. And most lily crypto awareness would increase even more. And of course, this will most likely spill over to other blockchains and other cryptocurrencies.

The only bad thing I fear would be that VISA in its strive to make even more money eventually would either adopt a CBDC or potentially even make one of their own. And that would be when I would cancel my card at least.

But what do you think about this, VISA dabbling with USDC. Am I just to hyped up on the hopium to see the trees for the pink dragon? Please share your thoughts on this topic. I would love to hear your insights. The comment section is yours.

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https://medium.com/@bo.daniel.jensen

 

 

See you on the interwebs!

 

 

 

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Patch
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I am a patchy reader and writer of words... I also publish on Hive under @daje10


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