Visa CEO sidesteps labeling Open USD a challenger to Tether and USDC: 'Our role is not to pick winners'

Quick Take

• During an earnings call, CEO Ryan McInerney said Visa's role is "not to pick winners."
• Visa is among the many companies that last month supported launching the Open USD stablecoin, viewed by some as a competitor to USDC and USDT.
• Ark Invest said it appears Visa is interested in Open USD, but it doesn't necessarily view it as a "strategic bet."

Visa has made clear that it sees value in stablecoins, but the payments giant is stopping short of picking a winner.

One of Visa's most noteworthy recent stablecoin initiatives came last month, when it joined more than 140 companies --- including Stripe, Mastercard, BlackRock and Coinbase --- in backing Open Standard, a consortium planning to launch the Open USD stablecoin (OUSD) later this year.

When asked during an earnings call whether Visa viewed OUSD as a potential rival to USDT and USDC, CEO Ryan McInerney took an agnostic stance.

"Visa, going forward, will remain multi-coin, multi-chain. Our role is not to pick winners," McInerney said on Tuesday afternoon. "Our role is to help clients connect to the stablecoin ecosystem securely and at scale, regardless of which stablecoin, which network, which infrastructure ultimately gains adoption."

When Open USD was announced, it fueled speculation that OUSD could challenge the leading USD-pegged stablecoins, Circle's (USDC) and Tether's (USDT).

Mizuho downgraded Circle, citing the threat posed by OUSD. While Bernstein analysts have downplayed OUSD's impact on Circle's business, on Wednesday the firm cut the USDC issuer's price target to $140.

McInerney's token-agnostic strategy, however, echoes a Mizuho analysis that described Visa as the "stablecoin of stablecoins." Analysts Dan Dolev and Alexander Jenkins argued in a Wednesday note that the proliferation of digital dollars could create greater demand for a central network capable of connecting them. In that scenario, individual stablecoins would become increasingly interchangeable, allowing Visa to capture value from the broader ecosystem.

Earlier this month, Visa launched an internal platform designed to make it easier for banks and fintechs to use stablecoins. Visa is initially launching with OUSD.

Open USD stablecoin model

A cornerstone of the OUSD proposition is its plan to share reserve income, which could make the stablecoin more attractive to distribution partners than USDC or USDT. Businesses will be able to mint and redeem OUSD without fees or volume limits, while partners are set to receive all earnings generated by the reserves backing the stablecoin, minus a small management fee.

Visa has clear reasons for taking stablecoins seriously, as they could become increasingly integral to a new global system for settling payments faster and more cheaply. They also stand to improve cross-border payments, particularly for businesses.

"Open Standard is designed with neutral governance and shared economics in mind, and it's designed that way because they believe that model will help scale stablecoins for payments," McInerney said. "As much as we talk about stablecoins on this call and in other venues, stablecoins really have yet to scale beyond a few use cases like stablecoin-linked cards."

Following McInerney's comments during the earnings call, Ark Invest Director of Research Lorenzo Valente took to social media to question Visa's interest in seeing OUSD thrive.

"It is becoming increasingly clear that the commitment from OUSD's partners is closer to a soft LOI than a strategic bet," Valente said. "Of course they will support it. But supporting OUSD is very different from committing meaningful resources, distribution, or balance sheet to making it win."

Mikko Ohtamaa, CEO and co-founder of Trading Strategy, offered a more adversarial take on Visa's stablecoin ambitions.

"Visa won't support any stablecoin, as stablecoins will kill their business," Ohtamaa said in a post on X. "They are part of alliances only to slow them down."

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