As a major player in the payments industry, Visa's influence and reach are nearly unmatched across the globe. Circle’s USDC is among the most popular stablecoin projects in Ethereum’s booming decentralized finance ecosystem.
Pay attention, because Visa is stepping into a strategic partnership to introduce USDC payments across their extensive network, which spans upwards of 60 million locations.
Revealed on Wednesday, December 2nd, this alliance marks a significant endorsement for USDC, stablecoins more broadly, and Ethereum, which serves as the fundamental technology enabling these developments. However, on the same day, a proposed piece of legislation emerged in the U.S. that could potentially hinder the progress of stablecoins in the country.
Let's delve into what these contrasting events signify for the evolving landscape of cryptocurrency.
Visa Welcomes USDC to Its Payment Ecosystem
USDC is the second-largest stablecoin right now, its $3 billion market capitalization representing roughly 12% of the total stablecoin economy’s current $25.5 billion market cap.
Thanks to a new pact with Circle, Visa is set to support the integration of USDC among an initial group of Visa card issuers. This initiative aims to gradually extend to enable international business transactions with companies accepting Visa.
Visa's top executive in the cryptocurrency space, Cuy Sheffield, commented on the announcement:
“This new initiative will be the first corporate card allowing businesses to spend USDC balances. We believe this will broaden the use cases for USDC among Circle’s commercial clients […] We view Visa as an interconnected series of networks. Blockchain and stablecoins like USDC add to our network complexity, and we see immense value in offering this to our clientele.”
This development is notably significant, as it underscores the mainstream emergence of stablecoins and Ethereum. It also indicates Visa’s pioneering efforts to secure its role as a 'network of networks,' strategically timed as stablecoin popularity is set to surge in the coming years.
Enter the STABLE Act
On the same day, three U.S. Congress members — Rep. Rashida Tlaib, Rep. Jesús García, and Rep. Stephen Lynch — proposed a draft to the House of Representatives aimed at increasing regulation of stablecoin projects within the U.S. STABLE Act The proposed legislation would require virtually all stablecoin issuers to obtain a banking license in order to operate, with the stated objective of preventing the exploitation of marginalized communities.
“It’s essential to stop cryptocurrency companies from exploiting residents in low- and moderate-income communities, akin to what large traditional banks have previously done,” Rep. Tlaib emphasized while sharing the draft on Twitter.
From a broader perspective, this narrative is misleading since Ethereum-based stablecoins like USDC make financial systems more accessible globally, fostering global financial inclusion.
Stablecoins open up the creation of unrestricted and open-access financial solutions available to everyone.
. @RepRashida Efforts to regulate stablecoins with such legislation further contribute to marginalizing the unbanked.
The STABLE Act, if passed, would stifle innovation in cryptocurrencies and related businesses in the U.S., rendering it a setback. But the deeper concern is its sweeping language, which could hold Ethereum node operators accountable for assisting in stablecoin transactions. #STABLEAct Who takes care of the nodes? A network without responsible parties simply doesn’t exist.
Do better. https://t.co/RtNOxKrNvu
— ChainLinkGod.eth (@ChainLinkGod) December 3, 2020
To draw a parallel, it’s akin to holding internet service providers directly accountable for their users’ online activities. It’s a dubious stance and implies a lack of understanding or opposition to Ethereum by the bill’s drafters.
The silver lining? The chances of this bill passing in the current legislative climate are slim. Still, Ethereum and its stablecoin environment continue to be in the crosshairs.
— Rohan Grey (@rohangrey) December 3, 2020
William M. Peaster is a seasoned writer and editor with a focus on Ethereum, Dai, and Bitcoin in the crypto world. His work is featured in Blockonomi, Binance Academy, Bitsonline, and others. He tracks updates on smart contracts, DAOs, dApps, and the Lightning Network, and is branching out into Solidity. Reach him on Telegram via @wmpeaster
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