Author: Hazel; Editor: Pat
Original link: https://mp.weixin.qq.com/s/KWoywbocq3BqaI6nPieYsQ
Disclaimer: This article is a reprint. Readers can obtain more information through the original link. If the author has any objection to the reprint format, please contact us and we will modify it according to the author's request. This reprint is for information sharing only and does not constitute any investment advice, nor does it represent Wu Blockchain views or positions.
I. Introduction to this issue
You may not have a concept of Visa's massive numbers: it processes more than $15 trillion in transactions every year, almost equivalent to China's annual GDP; it connects 130 million merchants worldwide, with 4.3 billion cards pulsating behind it.
But hidden within the gears of this sophisticated machine lies a chronic problem in traditional finance: to make cross-border payments appear seamless, the global banking system is forced to lock up trillions of dollars in pre-deposited funds in its pipes. This money lies dormant in bank accounts, unable to move, solely to cope with the time lag in clearing. While the crypto community is still debating how to "kill" Visa with blockchain, this giant has quietly completed on-chain surgery on its own fundamental artery. Last month, Visa announced the official expansion of its stablecoin settlement pilot program to the United States. This is not just a PR gimmick, but an attempt to completely release the locked liquidity by leveraging the minute-level clearing speed of stablecoins. Although the current annualized settlement volume of $3.5 billion is just a drop in the ocean in Visa's trillion-dollar empire, it reflects Visa's anxiety about "relevance." Visa doesn't care whether the underlying technology is Solana or Ethereum; it only cares about one question: in a future where everything is on-chain, can it continue to define the foundation of asset circulation?
In this episode, we invited Larry Ma, who has experience navigating both Visa's traditional background and the world of crypto investment. We will break down the deep logic behind Visa's integration with USDC, the future evolution of four-party payments, and how ordinary entrepreneurs can find the real "golden slope" amidst the entry of giants in 2026.
This episode is a joint broadcast of "Zhiwubuyan" and ETHTAO. ETHTAO was founded by SNZ and is dedicated to spreading the values and culture of Ethereum in Asia, connecting, nurturing, and guiding a new generation of builders into the Ethereum ecosystem.
[Guest]
Larry Ma
A partner at SNZ Holding, he previously worked at Visa and has over 25 years of global experience spanning e-commerce, digital marketing, financial services, and blockchain innovation.
[Host]
Hazel Hu
Host of the podcast "Zhi Wu Bu Yan" (meaning "Speak Out Without Hesitation"), and a core contributor to the Chinese Public Goods Foundation (GCC). X: 0xHY2049; Jike: A careless Yueyue (a user name).
II. Background Introduction
Hazel: Welcome to another episode of "Speak Out in China," I'm your host, Hazel. Today we have Larry, a partner at SNZ Capital, to discuss an important recent news item: Visa has expanded its stablecoin settlement pilot program to the US market. The stablecoin mentioned here refers to USDC, issued by Circle.
Larry previously had extensive experience at Visa, and also possesses rich experience in fintech, payments, and blockchain. Today, we invited Larry to interpret this news for us and to share his predictions for the potential changes in stablecoins and fintech payments over the next three to five years.
Larry, why don't you briefly introduce your background first?
Larry Ma: Okay, thank you Hazel.
I initially worked in the internet industry, primarily in e-commerce and internet marketing. From 2016 to 2018, I became involved in the Crypto community and experienced some of the early development stages of the Ethereum mainnet.
After that, I joined Visa and systematically learned how the traditional payment system works. During my time at Visa, I also came into contact with CBDC-related projects, such as China's e-CNY. At the same time, Visa also launched strategic explorations related to cryptocurrencies and NFTs during that period.
After the pandemic ended, I officially returned to the Web3 industry in 2024, joining SNZ Holding as CSO. In terms of investment focus, I primarily focus on the payments sector, as this is the area I am most familiar with.
Looking back at the development path of payments, we can find several important stages: early internet payments, the card organization system represented by Visa and Mastercard, CBDC led by the central government, and the early experiment of blockchain as peer-to-peer "digital cash".
These changes were significantly accelerated during the pandemic. On the one hand, contactless payments in traditional payment methods became rapidly widespread; on the other hand, the development of blockchain and stablecoins also accelerated simultaneously.
This is why we've seen stablecoins truly gain mainstream acceptance shortly after the pandemic ended—no longer just on-chain payment tools, but gradually being adopted by traditional finance and FinTech, entering real-world payment and settlement systems. In the future, stablecoins may even serve as underlying settlement tools in capital markets.
III. Deciphering the Story Behind the News
Hazel: Now let's get back to today's core news. Visa is expanding its stablecoin settlement pilot program to the United States, allowing some of its U.S. card issuers and acquiring partners to use USDC instead of fiat currency to settle transactions on VisaNet.
This sentence actually contains a lot of information. Larry, could you explain what it specifically means?
Larry Ma: First, it's important to understand that Visa operates on a typical "four-party payment model".
Simply put, one side is the card issuing side, which includes the issuing bank and the cardholder; the other side is the acquiring side, which includes the acquiring bank and the merchant. Visa, as a card organization, connects these two ends, but does not directly hold user funds.
This pilot program did not change Visa's four-party payment structure. Essentially, it simply introduced the stablecoin USDC as a settlement medium in the clearing and settlement process between the issuing bank and the acquiring bank.
For example, after a user makes a purchase with their credit card, they may pay their credit card bill monthly; however, for the issuing bank, it needs to conduct one or more clearing and settlement transactions with Visa every day. The core issue of the current pilot program is whether these regulated financial institutions can use USDC, instead of the US dollar, to complete high-frequency, high-efficiency fund settlements through VisaNet.
Therefore, USDC here is not for ordinary users, but is used in the back-end settlement layer between banks and Visa.
Hazel: That does sound like a rather "back-end" change. You just mentioned the four-party model. Actually, China's payment system is quite different from international card organization systems. Could you explain that to everyone?
Larry Ma: Many early internet wallets in China were essentially third-party payment systems, or even "internal circulation" systems within the platform. Later, as the central bank promoted the disconnection of direct connections, funds had to be held in custody by banks to prevent non-financial institutions from accumulating funds and engaging in lending-like or self-circulating businesses.
Against this backdrop, infrastructure such as NetsUnion and UnionPay have gradually taken shape, and China's payment system is becoming increasingly similar to the international four-party structure, only with different paths and regulatory logic.
Hazel: I understand. Now, back to the pilot program itself, there are actually two opinions in the market: one is that it's just a small-scale pilot; the other is that it's a major boon for USDC, Circle, and even the entire stablecoin industry. But in the short term, the stock price doesn't seem to have reacted significantly. Larry, what's your take on its practical significance?
Larry Ma: Many people are quite sensitive to PR-related information, and expect it to immediately translate into a stock price increase upon seeing such news. However, from Visa's perspective, this is actually a long-term, gradual process.
Looking back, Visa had already conducted cross-border remittance tests in Nigeria using USDC during the pandemic, though it wasn't a formal commercial project at the time. They later experimented with using USDC to settle funds with overseas sellers in various scenarios.
In 2022–2023, Visa partnered with Crypto.com to experiment with USDC for clearing and settlement on the card issuance side. This time, it simply brought this path back to the United States, working with crypto-friendly sponsor banks like Lead Bank. Therefore, it wasn't a sudden event, but a natural extension of years of exploration. From this perspective, the more significant meaning of this news is that stablecoins have been incorporated into the actual operating logic of the mainstream payment system, and are no longer just "proof of concept."
Hazel: I also noticed what you just said. Visa mentioned in its press release that since it started promoting stablecoin settlements in 2023, by the time this news was released on November 30, the scale of stablecoin settlements had reached an annualized operating level of $3.5 billion.
The 2023 you mentioned should also include some previous tests in Nigeria; and I remember there was a news article from Visa in 2023 saying that they had conducted an experiment on the Ethereum testnet, moving fiat currency settlement logic onto the chain for testing. In short, various collaborations and experiments have actually been going on for quite some time.
What I'm curious about is how to interpret this figure of $3.5 billion annualized? Just how large is that?
Larry Ma: If you look at the stablecoin market as a whole, this is actually a very small number.
If you look at other publicly available data, you'll find that the overall transaction volume of stablecoins last year was enormous. So, looking at this number alone, it's not particularly striking. Visa actually started internally tracking crypto-related transactions quite early on. Around 2020, they first systematically examined how many transactions in VisaNet's clearing and settlement were related to cryptocurrencies (at that time, they weren't even necessarily stablecoins). Their method at the time was to include any transaction identified with a crypto indicator during VisaNet's clearing and settlement process. I remember one milestone announced at the time was that, since VisaNet's inception, the cumulative transaction volume related to cryptocurrencies exceeded $1 billion for the first time.
The $3.5 billion annualized figure mentioned now is more likely calculated as follows: select a specific month (such as October or November), calculate the settlement amount completed through stablecoins in that month, and then multiply by 12 to obtain an annualized number.
For Visa, this is certainly a milestone; however, when considering the overall usage of stablecoins in payment scenarios, it is still a very early and very small part. Because regardless of the statistical methods used, after excluding on-chain transactions, arbitrage, DeFi, and other activities, the consensus is that the transaction volume of stablecoins in real-world payment scenarios is at least in the trillions of dollars in TPV.
Hazel: So, does that mean the balance tied up in USDC will actually be smaller? Because payment scenarios involve high turnover, right? USDC might only stay briefly before being exchanged back into fiat currency. Even if transaction volume increases, the balance tied up won't be particularly large.
Larry Ma: Yes, that is a core advantage of using USDC, especially for issuing and acquiring banks.
In the traditional model, issuing banks and acquiring banks need to pre-deposit a certain amount of funds in a bank account designated by Visa to ensure that there will be no shortage of funds when clearing and settling with Visa every day.
If we follow the traditional banking system, there will inevitably be time constraints. In the US, the fastest it can be is close to T+0, but it's still essentially subject to the rhythm of the banking system. The result is: settlement once a day, at most twice. For security, an additional working capital must be held in the account.
Using stablecoins, theoretically, funds could be credited within minutes. This would significantly reduce the required prefunding size, allowing the same scale of business to be supported with less capital.
Therefore, it essentially improves settlement speed, operational efficiency, and capital efficiency.
Hazel: I discussed this issue with AI for a long time yesterday. I was also thinking that "minute-level" settlement certainly doesn't mean settling each transaction in real-time, right? If that were the case, the failure rate would actually be higher. It's more likely that multiple transactions are aggregated and then settled once.
Larry Ma: It's definitely not true real-time settlement yet. Visa sets specific cut-off times in different regions. As long as you ensure sufficient funds in your account before these times, Visa can complete the settlement for you on the same day.
Globally, regardless of whether stablecoins are used, Visa still primarily employs batch processing for currency clearing rather than a continuous, real-time settlement model.
This is different from systems like the CLS Group, which specializes in real-time foreign exchange settlements among banks.
Hazel: You just mentioned starting to do the statistics at the end of 2020. I also found a news article saying that Visa officially announced in 2021 that it would include USDC in its settlement infrastructure. I even saw a rather old news article at the time—they did a related presentation at Clubhouse, I wonder if anyone remembers it.
Larry Ma: Clubhouses were really popular back then. You could consider 2021 as a publicly announced milestone, but in reality, many actions had already begun before that. For example, if you look into it, you'll find that Visa invested in Anchorage's Series B. Visa's overall strategy has always been to start with the underlying infrastructure. At the time, Anchorage, as an institution providing custody and clearing infrastructure, was a crucial link.
USDC settlement relies on compliant institutions to complete the final custody and clearing, and Visa itself does not directly provide custody capabilities.
Hazel: Anchorage, which you mentioned, is the same institution that partnered with Visa back then, right? It's kind of a crypto-native "bank"?
Larry Ma: To be more precise, Anchorage obtained its National Trust Bank license quite early on. This allows it to handle asset custody and participate in clearing-related businesses, but it doesn't engage in traditional deposit-taking. Simultaneously, it can serve as back-end infrastructure, providing white-label custody and settlement services to banks. Therefore, the stablecoin white-label solutions offered by Paxos and Anchorage are basically based on this architecture.
Hazel: So the banks participating in this pilot program are Cross River Bank and Lead Bank, right? What are the roles of these two banks?
Larry Ma: Both of these banks are Visa's sponsor banks. They participate in both card issuance sponsorship and some acquiring business, acting as both card issuers and acquirers respectively. Anchorage, on the other hand, is more at the back-end infrastructure layer, responsible for custody and settlement support, and does not directly appear in the front-end architecture disclosed in this news.
Therefore, when understanding the whole system, you will find that this news focuses on the settlement relationship between the issuing bank, the acquiring bank and Visa, rather than the underlying custodian institution.
Hazel: I saw some listeners discussing Lead Bank in the group, and most people felt it was a relatively well-known bank that was quite friendly to cryptocurrencies. If you're looking for a partner bank in the US, many people would think "it's a good fit." But recently, it seems that precisely because of these businesses, it's facing more regulatory pressure.
Larry Ma: Yes. Both of these banks were actually quite typical community banks in their early days.
For example, Cross River Bank was originally a community bank in New Jersey; Lead Bank, after being acquired in 2022, gradually transformed itself. These types of banks are characterized by relatively low operating costs, a affinity for FinTech, and a willingness to act as sponsor banks, collaborating with various fintech companies.
They typically don't directly "touch" crypto assets, but they can provide banking service interfaces for crypto-friendly FinTech. This is quite different from the situation in China. Most internet banks in China are newly established and have a short history; while many of these banks in the US have decades, or even close to a century, of history, and have simply shifted to new FinTech directions through mergers and acquisitions or business adjustments.
IV. Payment Wars and Blockchain
Hazel: Yes, I also think this is quite unfamiliar to Chinese users. In China, we mostly see "new banks"; while in the US, there are many long-established community banks that are transforming to serve new fintech businesses. The paths are quite different.
Let's return to the choice of blockchain. We mentioned earlier that Visa conducted tests on Ethereum in 2023, but this time the pilot uses Solana, not the Ethereum mainnet, and not even a Layer 2 blockchain like Base or Arbitrum. What do you think are the reasons behind this?
Larry Ma: If you look back at Visa's earliest cryptocurrency white paper, it actually discussed the issue of network selection. At that time, Ethereum was definitely the top choice.
Solana later made significant progress in terms of high throughput and speed. I remember that Visa was already using Solana when they partnered with Crypto.com, so this wasn't the first time they used Solana, but rather a continuation of that strategy.
However, Visa's overall strategy is chain-agnostic. This means Visa doesn't tie itself to any specific chain. Whether it's the Ethereum mainnet, Solana, or the Layer 2 networks you mentioned like Base and Arbitrum, Visa is willing to cooperate as long as there's genuine demand. From a broader perspective, Visa's goal is to build a network of networks: as long as payment demand exists, it wants to integrate its payment credentials, allowing funds and payment capabilities to flow across different networks.
Hazel: I saw an interview with the Head of Crypto at Visa before. He mentioned that Visa initially tried many blockchains, but was stuck on the issue of unstable and high gas fees for a long time; however, they couldn't bypass the EVM ecosystem because it was too big to ignore. So it actually took them quite a long time to solve this problem.
Larry Ma: Yes. However, the situation is quite different now than it was a few years ago. From 2024 to 2025, Ethereum's own upgrades, coupled with the development of various Layer 2 technologies, have significantly improved the overall throughput and fee structure. Gas fees have decreased considerably compared to the past. The next year will likely be a phase where scaling and institutionalization proceed in parallel. Therefore, I am not worried that Ethereum will not participate in Visa's stablecoin settlement system in the future; the probability of this happening is actually quite high.
Hazel: I have a more technical question, which GPT also posed to me. If we use a two-tier architecture, such as Base or Arbitrum, will there be any finality issues? Because theoretically, the final confirmation of the two-tier architecture still needs to go back to the first-tier architecture, right?
Larry Ma: Technically speaking, the security of Layer 2 is indeed guaranteed by Layer 1. But precisely because of this, organizations don't have to bear the full security costs of Layer 2 themselves.
For many organizations, using a mature Layer 2 network is actually more economical and realistic than maintaining a new Layer 1 chain themselves. This is a better choice in terms of liability boundaries and cost structure.
Hazel: I'm mainly referring to the question of "whether the money has actually been received." For example, from a legal or regulatory perspective, would there be a requirement that the final step must be confirmed at Layer 1? Because Solana itself is Layer 1, once the transfer is complete, it's a transfer; but wouldn't Layer 2 be logically more complicated?
Larry Ma: Here we actually need to distinguish between two concepts: one is technical finality, and the other is legal or regulatory finality. On-chain technical confirmation is one thing, whether regulators recognize this confirmation as "final settlement" is another. Often, the real disagreement lies not in the technical differences between different chains, but in the connection between technical finality and legal finality.
Hazel: I understand. In other words, as long as it's legally and regulatoryly acceptable, this issue itself isn't a particularly big obstacle.
You just mentioned ARK. ARK is the chain launched by Circle, and its testnet just went live in November. I remember we participated in ARK events when we were in Latin America. Visa also mentioned that it might use ARK for USDC settlements on its network in the future and run validator nodes after the ARK mainnet launch.
If ARK joins this system, will its role be the same as Solana, Ethereum, or other future chains? Or will it be different?
Larry Ma: ARK itself is a Layer 1 blockchain designed specifically for payment scenarios, so its on-chain structure and participant composition may have a stronger institutional component.
However, from Visa's perspective, ARK is just one of many blockchains it supports. Circle and Visa have a cooperative relationship on multiple levels, so it's natural for them to experiment with ARK.
However, in terms of actual impact, I personally think that ARK's PR significance may outweigh its short-term practical impact. After all, ARK is still in a relatively early stage.
If we only look at it from the perspective of "accessing the Visa network", there is actually no essential difference between its role and Solana's.
Hazel: Well, there's a question that might apply to all discussions about "payment chains": How do you understand why Circle insists on having its own Layer 1? Or rather, why does it have to have its own chain?
Larry Ma: As everyone has seen, institutions like Tyler have already built several Layer 1 blockchains, and Stripe has also created Tempo. For Circle, since I have issued a stablecoin, whether this coin runs on my own blockchain directly affects my ability to capture value and my control over the entire ecosystem.
Logically, they would naturally choose to create their own Layer 1, hoping to occupy a core position in the entire ecosystem. However, we can also see from past industry experience that "building an ecosystem" and "creating a product," or simply "issuing a stablecoin," are completely different things.
Whether this chain can ultimately function remains to be seen: are the existing institutions and ecosystem participants truly willing to migrate to their own chains? Or will the market eventually offer other options, or even a hybrid distribution?
I think only time will tell.
In addition, SNZ is also a member of ARK, which was officially announced some time ago, so we are continuing to follow ARK's future development.
Hazel: One thing I've always been curious about is this: everyone knows that not all chains will survive in the end, right? Some chains just can't build their ecosystems. But even so, people are still willing to keep trying. Do you think this is because it's a "low-probability but high-reward" gamble? Or is it because the overall landscape is still uncertain, so everyone has to try things out first? Or will it eventually lead to a multi-chain coexistence?
Larry Ma: From a strategic perspective, I'm more inclined to believe that this is a way to continuously consolidate and strengthen its own presence. But in terms of results, I don't think that a situation of "one chain dominating" will ultimately occur.
A more likely scenario is the coexistence of multiple chains, with each chain forming its own distinct application boundaries and scope. Ultimately, the key question is where the entire ecosystem will find a new equilibrium.
V. A chaotic battle among multiple parties: who will emerge victorious?
Hazel: If multiple chains coexist, will Visa ultimately act more like a "router"? For example, different payments take different clearing paths, and Visa is responsible for scheduling and connecting them in the middle?
Larry Ma: This is actually very much in line with Visa's consistent thinking. Visa's concept of "network of networks" essentially means that it wants to be able to access various different networks—whether it's Web2 or Web3.
For example, wallet payment networks in traditional markets, Layer 1 in blockchain, and even Layer 2.
Visa's goal is to allow its payment credentials to flow freely between these networks to complete payments. Of course, in practice, the differences will be significant depending on the region and regulatory environment. Visa faces considerable difficulty entering certain markets, such as non-US markets or gray/semi-gray scenarios using USDT, where its presence will be much weaker.
Hazel: I understand. It is indeed more difficult in some less formal or gray markets.
I have another question, which might be a bit more specific. For example, Circle also has its own Payment Network, right?
Larry Ma: Yes.
Hazel: There are so many people wanting to build "networks" right now, and judging from PR papers, it's sometimes hard to distinguish them. So, what's the core difference between Circle's Payment Network and networks like Visa?
Larry Ma: Circle's Payment Network is more like a loose alliance of institutions that use Circle's stablecoin and related products. You can think of it as Circle's partner network or consortium network.
If we draw an analogy with Visa, its member network shares structural similarities. Looking at the members of the Circle Payment Network, there are card issuers, acquiring institutions, and those involved in remittance, operations, and clearing—the roles are quite diverse. This reflects Circle's strategic direction as it attempts to gradually evolve from a "stablecoin issuer" into a "payment network."
Visa itself has been deeply involved in cross-border payments since its early days as a card organization. Whether it's card payments or bank-to-bank systems, cross-border transactions have always been one of its core capabilities.
The current changes are simply that some card products have started to be linked to stablecoins, and more cross-border card issuance and cross-border consumption scenarios have emerged. These are essentially still cross-border payments.
At the product level, Visa originally had Visa Direct, as well as B2B cross-border payment capabilities gained through the acquisition of Earthport (formerly Earthport). Now, Visa is integrating these capabilities to form the new Visa Direct system, combined with a stablecoin settlement layer, to address issues such as remittance and cross-border trade payments. So you'll find that this thread has always been there; only the underlying tools and technologies have been constantly evolving.
Hazel: For example, if USDC is introduced into this system, can it bypass SWIFT? Or, in the long run, is it challenging SWIFT?
Larry Ma: You can understand it this way: the US dollar itself actually operates on multiple different payment rails. In other words, there isn't just one way for the US dollar to "move".
Card organizations are a crucial link in this chain. If you look back at a previous US law—UIGEA—which was designed to regulate internet gambling and prohibited US financial institutions from providing related services, that law clearly defined the "channels" through which funds could flow.
While cash doesn't exist on the blockchain, the banking system offers various channels such as ACH, wire transfers, checks, and various A2A payment methods. Card organizations are one such railroad, along with various APMs like PayPal and gift cards, which have always coexisted. Therefore, from this perspective, SWIFT and card organizations inherently play different roles in cross-border payments. SWIFT primarily functions as a messaging system, while card organizations handle clearing and settlement; their roles are not entirely overlapping.
Hazel: Yes, but in practice, when you send a message, you still need to notify the central bank or its subordinate banks in the other country via SWIFT, right?
Larry Ma: Yes, the final clearing and settlement are still done by the banks, while SWIFT is responsible for message transmission.
Therefore, from a realistic perspective, these two paths will coexist for a long time to come, and a complete replacement is unlikely in the short term. However, SWIFT is also changing. Recently, they announced at a conference that they are conducting a pilot program combining off-chain and on-chain technologies, using ConsenSys and Linea. This is essentially the same logic behind Western Union and MoneyGram's statements about embracing blockchain—they cannot ignore it.
SWIFT has been continuously innovating internally in recent years. For example, it launched SWIFT GPI to solve the problems of incomplete information and tracking difficulties in traditional messages, allowing more information to enter the message network. These adjustments and upgrades have actually been ongoing.
Hazel: So what exactly will the collaboration between SWIFT and Linea be? Will it simply involve putting information on the blockchain, or will it be able to do much more?
Larry Ma: To be honest, I'm not quite sure yet. The collaboration with Linea is relatively new.
We did talk to some people in South America before, but overall it seems to be in a relatively early stage. What is their ultimate scope? What will be on the blockchain? There's no clear public statement yet.
Hazel: So why did you choose Linea? Did anyone discuss this choice, or was it a more natural result?
Larry Ma: From a realistic perspective, the range of choices isn't actually that wide. If you look at the major Layer 2 options: Base is already part of the Coinbase + Circle system, Arbitrum's roadmap is basically confirmed, and Polygon's own strategy is quite clear. Considering all this, Linea might be the only option that's still relatively "worth discussing".
Hazel: We've talked a lot about Visa's strategy, and I personally feel its logic is quite clear. But I'm also curious about how Visa's overall encryption strategy is positioned? Having worked at Visa before, from an organizational structure and strategic perspective, is it a comprehensive, long-term strategy, or just a project driven by a specific department?
Larry Ma: This question is a bit beyond my pay grade, both when I was at Visa and now from an external perspective. But I can share my observations. Visa's overall encryption strategy can actually be traced back to 2018, much earlier than many people realize. At that time, there were already relatively systematic discussions and documents internally, clearly defining how this path should be taken.
During the pandemic, the overall progress was still along the established strategy. There was a noticeable pause due to the FTX incident. After 2023, some plans were restarted. From an external perspective, this was a very methodical process, starting with infrastructure and then moving to the application layer. For example, there was the Cryptocurrency white paper first, followed by the NFT white paper; this is a natural evolution from the foundation to the application.
In terms of organizational structure, if we break down Visa's business units, there are roughly three parts that are related to its encryption strategy: Consumer, Commercial & Money Movement (CMS), and Visa Ventures.
The Head of Crypto you mentioned earlier leans more towards innovation and product development, and is more closely related to the Consumer side. CMS now focuses more on fund flows, such as remittance and settlement in cross-border trade. Visa Ventures, in addition to investing in crypto, also invests in AI and other payment-related technologies. Within crypto, stablecoins are probably their second biggest focus after infrastructure. They see stablecoins more as a payment medium, focusing on the new possibilities they can bring at the structural level. Some of their previous investments, such as Anchorage, and earlier stablecoin infrastructure projects, all follow this logic.
Hazel: So, what are the significant differences between Visa and Mastercard in their stablecoin strategies? After all, they are the two largest card organizations in the world.
Larry Ma: From an external perspective, the two companies do have different strategies. I haven't worked inside Mastercard, so my judgment is based solely on publicly available information and industry discussions.
Overall, Mastercard is emphasizing its MTN in this cycle. It's more like building an application network supporting multiple assets and tokens. Therefore, you'll see their investment and acquisition activities are primarily focused on supplementing their underlying capabilities. Recent market rumors suggest they might acquire Zero Hash; if true, this would complete their capabilities in custody, OTC, and Crypto-to-Fiat conversion. At the upper layers, Mastercard's focus is on the MTN itself, while in terms of asset support, they've adopted a diversified approach: including USDC, Paxos stablecoins, PayPal's PYUSD, and some traditional financial institutions' USD stablecoins, all within their support scope. So, overall, Visa and Mastercard's strategies for stablecoins are indeed different.
Hazel: Looking at investments and acquisitions of leading stablecoin startups, Stripe invested in Bridge, Mastercard is rumored to be acquiring Zero Hash, and Visa invested in BVNK. What are the differences in the positioning of these three deals?
Larry Ma: This is a sensitive issue, and I haven't had access to any internal materials, so I can only analyze it based on external observations and industry exchanges.
Let's start with Stripe. Stripe itself is still in a high-growth phase in the Web2 and traditional payments sectors, making it a typical Tier 1 Fintech. Its acquisition of Bridge, along with subsequent acquisitions of Wallet and Tempo, is essentially laying the groundwork for its "second growth curve." Once Stripe completes this architecture, it can form a relatively complete closed loop in its Stablecoin business. Bridge's core capability is essentially a Stablecoin API + Orchestration platform, particularly adept at connecting cross-border trade and enterprise payments. From Visa's perspective, Stripe's acquisition of Bridge is actually highly regarded.
Let's look at Visa. Visa has consistently been an early mover in the stablecoin space, investing in underlying infrastructure like Anchorage early on, and later in BVNK. Visa's core strategy isn't to start a "second front," but rather to integrate stablecoins directly into the VisaNet system as a new settlement medium.
VisaNet itself supports a dozen or even twenty clearing currencies. Even during the pandemic, Visa had already incorporated USDC into its clearing system—its status within the system is equal to that of clearing currencies like the US dollar and the euro. Therefore, Visa's approach is to integrate stablecoins into its existing network, rather than creating a separate Layer 1 network or a completely new one.
In contrast, Mastercard has clearly stated its intention to develop MTN, so they will be more proactive in supplementing the underlying assets and infrastructure, which is why they are considering assets like Zero Hash.
Hazel: Can I understand it this way: Stripe still goes through card organizations for now, but is there a possibility it could pose a certain "threat" in the future? For example, like Revolut, where I can transfer funds within Revolut without going through card organizations for clearing. If Stripe develops its own complete blockchain and internal network in the future, would this "direct internal connection" system impact card organizations?
Larry Ma: You can understand it this way. If Visa doesn't engage with stablecoins at all, then all future on-chain transfers, payments, and interactions will be completely unrelated to card organizations. Only when stablecoins are integrated with Visa's product and service ecosystem can Visa continue to participate in future payments. So from Visa's perspective, their biggest concern isn't being "disrupted," but rather losing relevance. If a new payment "continent" emerges in the future, and Visa doesn't participate, then that market will naturally be irrelevant to them.
Hazel: This assessment is actually quite similar to the analysis of one of our previous guests. He believes that Visa's core capabilities that it might retain in the future include: identity and compliance intermediaries (KYC/AML), stablecoin clearing APIs, integration with large enterprise B2B payment platforms, issuing bank outsourcing and affiliate network operations, and SaaS-based compliance and risk control APIs. However, he also predicts that Visa may lose some revenue streams, such as commissions on cross-border payments, commissions on small-amount POS transactions, and deposit and withdrawal fees from CEXs, potentially leading to an overall revenue decline of 20%–30%. What's your take on this assessment?
Larry Ma: Personally, I feel this assessment is a bit too radical, essentially "cutting off" most of Visa's existing business. If you look at Visa's most recent financial report, Visa's quarterly net revenue exceeds tens of billions of dollars, with a gross margin of about 67%. And the vast majority of this revenue does not come from so-called API middleware, identity authentication, or compliance services. In fact, Visa's ID & Risk-related revenue accounts for a very small percentage of its overall revenue, almost negligible.
More importantly, Visa's vision has never been to be a middleware company. Whether it's DPI, API, or compliant SaaS, these are not Visa's core positioning.
Visa's true core asset is its Visa Rules—a set of rules under which all members in the network operate. Therefore, I don't agree with simplifying Visa or Mastercard into "future global compliance intermediaries" or "card issuer alliance agents." This simplification is too direct and ignores their position within the entire payments ecosystem.
As you mentioned before, Visa is a chaotic organization that tries to stand between order and chaos, maintaining rules and stability while leaving room for innovation. If Visa can continue to iterate along this philosophy, its future positioning will certainly change, but it will not be simply categorized into a single role.
Moreover, from a broader perspective, this round of structural changes in payments and finance is likely to be a decade-long cycle, rather than a four-year cycle like that of the crypto market. The longer cycle, the more variables, and the more structural opportunities will be.
Hazel: When I was preparing for the interview yesterday, I specifically checked Visa's stock price. I initially thought that things like crypto and stablecoins might have a significant impact on it, but it seems okay overall; the trend is still fluctuating upwards. So I'm quite curious about Visa's future.
The concept of a chaotic organization you just mentioned could be discussed in more detail. I think many people aren't very familiar with Visa's history. When I was preparing, I did some research and found that Visa's founder wrote a book called *One from Many*. I haven't had time to read it in its entirety myself, but I saw a series of interviews with him on YouTube, about seven episodes long. I then gave all of that information to NotebookLM to help me organize it.
Otherwise, why don't you tell everyone how Visa has developed step by step to where it is today? I think many readers and listeners don't really know.
Larry Ma: Visa's evolution has indeed been very long. It started as an incubation within the banking system, then became a consortium, then a non-profit industry coordination organization, gradually evolving into a privately held for-profit company, and finally a publicly traded company. Almost every stage took decades.
However, from its very beginnings, Visa had a core, and then-advanced, concept—the chaotic organization. At its heart are two concepts: order and chaos. Visa defines itself as an organization that needs both order to maintain stability and chaos to foster innovation; therefore, it should exist in the "edge" between order and chaos. The product that most directly embodies "order" in this system is Visa Rules. It defines the basic rules that all members of the Visa network should follow in their daily operations. But above these rules, a great deal of flexibility is still reserved.
Visa has always emphasized that it is a purpose- and principle-driven organization. In other words, as long as your vision and basic principles are clear and consistent, you can flexibly formulate specific rules and structures according to the actual situation at different times and in different places.
The purpose of this is to maintain overall order while allowing innovation to continuously emerge from the "periphery"—because many genuine innovations often begin at the periphery.
Hazel: How do you think this concept relates to the ideas of "platform organizations" or "governance organizations"?
Larry Ma: Visa, as a consortium in its early days, was itself a very forward-thinking organizational structure. One of its greatest contributions was creating and establishing the "four-party model," which remains the foundation of the global payment network to this day.
Visa is merely a rule-maker and network coordinator, not the "entire" entity within the network. The Visa network comprises numerous members, including banks, fintech companies, payment facilitators, merchants, and users. It's an extremely vast, multi-layered network. Visa Rules, in essence, are a system of rules used to coordinate the flow of funds, information, and payment processing across borders or domestically, involving multiple parties. Visa's core principle is that any card bearing the Visa logo can be used globally, regardless of its country of issuance. This is what Visa emphasizes as payment ubiquity. This is a very powerful concept because it eliminates concerns about local payment methods becoming invalid abroad.
Hazel: I think the "four-party model" itself is quite interesting. Because a three-party model also exists; for example, American Express issues its own cards and handles its own clearing. Early Alipay in China was also a semi-three-party model in the mobile payment era. From an efficiency standpoint, the three-party model seems more efficient, but it's actually harder to scale up significantly. If an institution controls too many aspects, the entire system may become top-heavy.
Larry Ma: Yes, if you compare Amex and Visa, you'll find that Amex is much smaller than Visa. One reason is its limited scalability—because it's too tightly integrated with the banking system.
If we look at some of the early Fintech third-party models in China, the bigger problem actually lies in financial stability and systemic risk, because they are to some extent outside the traditional banking system.
Hazel: Yes, it's actually the lack of openness that ultimately affected overall scalability. Do you think Visa's development path is almost impossible to replicate?
Larry Ma: I don't think it's necessary to replicate this. Almost all truly successful paths are inherently unreplicable because they depend on specific historical conditions and eras. But one thing we can observe is that the entire industry is indeed in the process of evolving from "four-party payment" to future payment models.
The future may still see a four-party model – which is certainly what Visa hopes to see; but it may not be. However, a completely P2P model is also unrealistic – because that would make the regulatory body very ambiguous. Therefore, new protocols and new structural models are likely to emerge.
One example that I've found interesting recently is the Commerce Protocol launched by Coinbase and Shopify. It connects buyers and sellers through an operator/facilitator and smart contracts, enabling payments to be completed on-chain.
Hazel: So this is basically a pure on-chain payment system.
Larry Ma: Yes, essentially it's about building a new, smart contract-based payment network on-chain.
Hazel: Yes, but that would introduce another operator, or a similar mediator role. So how should this role be defined in the future?
Larry Ma: First, the operator here cannot "own" the transaction, nor can it block the transaction itself. It can participate or not, which is actually a very interesting setting. This transaction can only be "owned" and decided by the initiator and receiver of the transaction; whether it occurs and whether it is completed are ultimately determined by these two parties. As an intermediary operator, it provides more added value, such as in terms of regulatory and compliance aspects, or as a participant in certain conditional judgments. But the core remains the same: whether the transaction is valid is ultimately decided by the buyer and seller.
Hazel: Following these paths, what do you think Visa needs to do next to better leverage its strengths? How can it avoid being left behind in the evolution of future payment methods?
Larry Ma: From Visa's perspective, the first point is that Visa actually launched its blockchain and stablecoin strategy quite early. Whether it's card issuance, acquiring, or the custody aspect, Visa has explored these areas and made some attempts and investments on the application side. From an external perspective, a core question Visa needs to consider going forward is: will its four-party model need to change?
Should we continue with the four-party model, or evolve into a new form somewhere between the four-party and P2P models? For example, should we incorporate blockchain and stablecoins into VisaNet, forming the "Network and Networks" relationship we mentioned earlier; or take a more radical approach and directly "put Visa itself on the blockchain"? These two paths are completely different in difficulty and present enormous challenges. The key is to clarify: which functions should be natively on-chain? Which functions should be "grafted" onto existing Web2 payment networks? Where exactly does control lie?
Visa has always positioned itself on the boundary between order and chaos, but this must be predicated on ensuring the existence of order first. Currently, these questions do not yet have completely clear answers. I believe that through continuous exploration in real-world business scenarios, and after reaching a certain scale, we can gradually make clearer judgments.
The second very important question is whether Visa should shift from its original B2B2C model to a certain degree of 2C.
Visa's traditional model has always been to connect card issuers and acquiring banks with merchants and consumers. However, in the context of stablecoins, stablecoins are not only payment tools but also a form of asset.
Should we directly target end consumers (C-end)? This question has been discussed repeatedly internally, but we often end up going back to the old path. However, I believe this question will continue to be discussed in the future—the key is not "whether to go to B2C," but "to what extent to go to B2C."
Looking at the bigger picture, whether it's the internet or the crypto industry, the overall direction is that decision-making power is gradually shifting from traditional financial institutions and intermediaries to merchants, SMBs, and consumers.
When this balance shifts, Visa, as a card organization and a coordinator of multi-party payment value transfers, will inevitably need to readjust its positioning and control methods. This change is unavoidable; the key lies in whether it can adapt to the change and adjust in a timely manner.
VI. Entrepreneurs' Focus
Hazel: This is a choice that giants must face when their strategies and forms change. But for ordinary people or entrepreneurs, they don't actually have that strong ecosystem and resource advantage. You're also investing in SNZ Holding now. With stablecoins so hot and giants constantly entering the market, what can entrepreneurs still do?
Larry Ma: I think we can look at it from a different angle. Many people, when they talk about payments, think of the system as having a lot of legacy issues and being very complex. But this is precisely the result of decades of gradual accumulation in the payment system; it is inherently a multi-layered and multi-structured system. Therefore, it's unlikely that a simple, purely on-chain approach can replace or reconstruct the entire payment system all at once. The evolution of the payment system will definitely be a long-term, gradual, and hybrid architecture process. My advice to entrepreneurs is not to try to change the entire payment ecosystem from the start. First, find a point of entry that you can make, a specific problem that is already big enough at the current stage, and do that well first.
Take Stripe as an example. Its early work was very simple: as the internet developed, it provided developers with more user-friendly APIs, reduced the complexity of payment systems, and enabled developers to quickly build payment capabilities in e-commerce environments.
This is a very clear and restrained mission. As its scale grew, Stripe's business lines gradually expanded to acquiring, payment method integration, and fund management, slowly connecting the links. Even today, its core focus remains primarily on Web2, rather than a complete shift to Web3.
This track is very long, with a long slope and thick snow, making it entirely possible for a very large company to emerge from it.
Hazel: This reminds me of Allscale, whom we interviewed in our last episode. They recently received investment from YZ Labs, and they also started with a very specific entry point like "invoices" and then gradually expanded, rather than trying to reconstruct the entire system from the beginning.
Larry Ma: Yes, the restructuring of the payment ecosystem cannot be accomplished by a single company. Ultimately, it will require multiple companies to work together to form a new ecosystem and balance.
What entrepreneurs need to do is find their niche and entry point, and doing one part well is already very valuable. Just like Visa itself doesn't cover all financial services, for example, it doesn't do deposits and loans; Custody also relies more on investment or partnerships.
Although Visa now has products like VTAP, it doesn't directly participate in building a complete hosting system across the entire supply chain.
Hazel: A few days ago, an article went viral. I don't know if Larry saw it, but it's called "From Start to Give Up: Why I Stopped Doing Web3 Payments," by Yuki. It mentions some points that everyone already knows, such as that this industry isn't about "just making a good product and you'll win." It's about bank relationships, licenses, capital efficiency, and the ability to manage risk in the long term.
Are these the points you consider when communicating with entrepreneurs or investing? I have a concern: if these conditions are absolutely necessary for success, many entrepreneurs might be discouraged from entering the field. It sounds like an industry for seasoned veterans. Do you encounter this issue when communicating with entrepreneurs?
Larry Ma: Yes, we've worked with Peanut in South America, and that's a prime example. Initially, they were developing a payment link-like product, which didn't see rapid growth in Eastern Europe or Turkey, but found a suitable environment and product form in South America. Through DevConnect, they quickly gained influence and growth. However, the underlying technology isn't actually their own; they've integrated with Bridge, Mercado Pago, and Pix.
From a user experience perspective, it's currently ahead of similar applications, but its technological foundation isn't entirely self-developed. This illustrates that innovation in the payment field doesn't mean you have to build all the underlying infrastructure yourself. The key is to understand existing tools and services in the market, select available resources, formulate your own development path, and gradually build a competitive advantage and scale.
The payment ecosystem is extremely complex, with different levels and players in different regions. Entrepreneurs need to find their niche, clarify their long-term direction, aggregate and allocate resources, and drive implementation. As for who will ultimately win, neither Visa nor Stripe could have fully predicted the current landscape.
From an investment perspective, stablecoins are inherently global, meaning they can be accessed across borders from the outset, but they are also subject to regulatory and geographical restrictions. Therefore, we focus on which projects have the potential to grow into new types of infrastructure and service providers that span regions or even the globe.
This is easier to observe in B2B scenarios. The underlying drivers of B2B applications are cross-border liquidity needs, cross-border trade, and remittance demands. Stablecoins and blockchain are excellent vehicles for this, and after addressing compliance and anti-money laundering issues, they can provide a better user experience and service. Therefore, these types of projects are more likely to achieve a certain scale, and due to their inherent cross-border nature, covering three continents or more is a predictable development path.
The entry of industry giants is typically concentrated in North America and developed European countries, where the pace of action is relatively slower, but it will impact local market structures and capital market ecosystems. This is a key area we will be focusing on next year.
For consumer-facing applications, if they attempt to replace the local currency, local regulators will inevitably intervene. Regulations and enforcement vary across countries, but both dollar-denominated stablecoins and local stablecoins will impact the market. We will focus on which projects can truly scale up across multiple regions, potentially becoming the prototypes of the next generation of "new banks," but this is a challenging assessment.
Hazel: I understand. In other words, a project first needs to grow from a regional market to a globally usable platform before it can create a barrier to entry. For example, a platform might perform okay if it's only used in South America, but it might not necessarily win; if it's usable everywhere, it has the potential to become a "rabbit leg product" and gain a leading edge. I still have money in my account that I haven't withdrawn yet, so I'm waiting for the next opportunity to see where I can use it.
Larry Ma: Actually, it's very easy to use. When we were paying attention to it before, most people would look at whether stablecoins could be used through card machines or bank interfaces, but it actually operates through a local payment rail.
Hazel: You just mentioned that Northern Markets could have a significant impact on Capital Markets next year, which is also a key focus for you. What exactly do you mean by that?
Larry Ma: From the perspective of payment, bank deposits and loans to the upper capital market, the three are in a progressive relationship: payment solves the problem of money moving from A to B; bank deposits and loans generate interest through lending; and the capital market forms trading behavior by pricing assets at risk.
Currently, there is increasing certainty regarding legislation on stablecoins globally, and banks are becoming more open to the issue, even preparing to launch their own stablecoins. While breakthroughs in deposit and loan businesses are still difficult, the capital market is expected to become more active next year as the compliance of this three-tiered structure becomes clearer. As a public medium connecting banks, Web3, and capital markets, stablecoins will simultaneously demonstrate the triple effects of payments, cash assets, and settlement tools.
Hazel: This involves a business model issue. Payments are usually just the entry point; the underlying credit is the core profit driver. Do current stablecoin projects primarily earn transaction fees or interest? What changes will there be in the future profit model?
Larry Ma: Stablecoins are first and foremost a medium. Traditional payments are merely a conduit for large institutions and aren't very profitable. But stablecoins have asset attributes—they are essentially cash. In traditional payments, money is just a number in a bank account, and asset transfers occur between banks; but when stablecoins move, the asset itself is in motion, which broadens the scope of payments.
The profit-making logic of stablecoins still revolves around the three core areas of payments, deposits and loans, and financial markets; this fundamental aspect remains unchanged. Whether it's forex (FX), treasury management, or lending, stablecoins are simply a new medium. However, due to their different tracks, flow rates, and programmability, they will generate many innovative use cases that previously required intermediaries.
Hazel: If an entrepreneur comes to raise funds, how would you "interrogate" them?
Larry Ma: I will conduct categorized interviews based on background, focusing on whether he has a deep understanding of the fundamental changes brought about by blockchain. Can he grasp the structural alpha of the system and outperform the beta cycle? Is his proposed solution sustainable?
They typically value peer-to-peer (P2P) payments and on-chain native features, but I will examine their understanding of the current state of affairs. If they don't understand why the existing payment system is the way it is, their changes may not be grounded in reality, making it difficult to transition from the status quo to the new system.
Hazel: Are there any directions that you immediately felt were inappropriate and that you would definitely not invest in?
Larry Ma: I basically don't look at pure stablecoin issuance anymore, because the battleground isn't on innovation at the issuance end. I'm more interested in who can control new circulation methods for stablecoins, or who can play a key controlling role in transaction architecture and services.
Hazel: What about projects like U-Card? That's almost become a meme in the industry.
Larry Ma: Card and cash-based services emerge in every cycle. I believe that cards, as a medium bridging Web2 and Web3 interfaces, will exist for a long time and are necessary.
The question is, who can create something structurally different from the past? Whether it's user experience or fund efficiency. If it's merely about withdrawals or earning fees, there's no fundamental difference. While the current regulatory environment and Visa/Mastercard rules are different than before, potentially giving rise to some new projects, these types of businesses are highly cyclical and could tighten at any time. Essentially, entrepreneurs need to capitalize on this window of opportunity to create more sustainable structural innovations.
VII. Outlook for 2026
Hazel: Would you use the AI track as an analogy for stablecoins? For example, looking for the GPT moment of stablecoins?
Larry Ma: I don't use that analogy. AI and stablecoins are two parallel paths. Although intertwining them makes things more complicated, their development logic is different.
Hazel: People may be wondering if the stablecoin sector will see a large-scale explosion from B2B to B2C.
Larry Ma: The stablecoin industry is unlikely to experience a "Wow Moment" like GPT. AI development is non-linear and leapfrog, hence the amazing feeling of instantaneous intelligence. Stablecoins are more like a process of quantitative change leading to qualitative change.
When stablecoins reach a market capitalization of $1 trillion, there will indeed be a significant change, but this perception will be asynchronous across different regions. Just as China has long since achieved cashless transactions, in the US or Europe, this perception may come later and be more pronounced.
Hazel: You mentioned earlier that you went to Latin America because you needed to do on-site research, and that experiencing things remotely and experiencing them firsthand is indeed very different. Besides what you just mentioned, what other specific experiences did you have there?
Larry Ma: The feeling of being there firsthand is completely different from watching a remote video or reading the news. On-site, you have more freedom and perspectives to explore, and you can gain a richer context.
For example, I spoke with the founder of Peanut for the second time in Latin America. Since our first meeting was remote in June, this face-to-face conversation allowed me to more clearly understand his thought process and the dynamic changes in the project. Secondly, you can personally try the product locally and get feedback directly from people or cashiers; this kind of in-depth market information can only be obtained locally.
Hazel: Besides Peanut, what other products did you use locally that left a deep impression on you?
Larry Ma: I also used FluidKey and Burner, and looked into some privacy wallets and related privacy technologies. Although doing KYC for each one was a bit of a hassle, I tried my best. For example, I had to try Peanut's KYC twice before I passed, and I even asked Claude (Peanut's founder) if there were any other ways. You have to try a product yourself to find problems.
Hazel: You mentioned talking a lot about local teams. Do you have any more specific examples?
Larry Ma: I talked to some Fintech teams that have been active between Brazil and Argentina for many years. They act as a bridge between the payment systems of the two countries and entered the stablecoin industry quite early.
I paid attention to their survival status and market positioning. For example, did they hold PayPal? What were their views on assets like ARS Stablecoin? When we visited, there were already four different peso stablecoins available locally. Observing the development of these non-US dollar stablecoins was very interesting.
Hazel: I'm also curious about "fiat currency on-chain". For example, some projects put Mexican government bonds or non-US assets on-chain for RWA. What are your thoughts on this?
Larry Ma: For these countries, there is no clear adoption driver for local stablecoins within their borders, because people obviously prefer to hold US dollar stablecoins.
However, non-US stablecoins are valuable as Liquidity Pillars for foreign trade. They do not need to go through the traditional banking system every time and can be completed directly through stablecoins. The interest generated by the underlying assets of stablecoins (such as pesos or reals) can be redistributed among banks, cross-border trading counterparts, and users. It prevents US dollar stablecoins from directly impacting local currencies.
Regarding size, the stablecoins in Brazil and Argentina are currently not very large. We need to observe which local stablecoin can be the first to break the $100 million threshold. Once it exceeds this value, it means that it has entered the top 20 global stablecoins, reaching the so-called "edge of order and chaos".
Hazel: Besides Latin America, which markets do you plan to visit next year?
Larry Ma: This year I traveled to the US, Latin America, Europe, and Asia. I think the MENA region is definitely worth visiting next year.
Judging from this year's Fintech Week, Tether has become the recognized Fiat Reference Token in the region, meaning its payment progress is faster than in other areas. Furthermore, the Middle East has gained a degree of freedom in its capital markets through negotiations with the US, and institutional progress is rapid. Therefore, besides North America, the Middle East will be another key area to watch next year in terms of payments and capital markets. As for Africa, we are currently reviewing some projects, but will decide whether to delve deeper into the heartland next year depending on the situation.
Hazel: What are your predictions for 2026?
Larry Ma: First, there's Stablecoin OS. The infrastructure for stablecoins will become increasingly clear. Next year, a complete "puzzle" may emerge, with different companies responsible for different modules, and some companies even integrating the entire system. Whether in terms of payments or compliance, its structure will be further upgraded, and the pricing system will become more defined.
Furthermore, as Clarity's compliance improves, financial institutions in New York and other locations will further confirm the nature of RWA. Stablecoins, as cash and settlement tools, will spur the development of more middleware to bridge the gap between blockchain and traditional finance.
We are more focused on the payment aspect of the integration of AI and Web3. For example, whether M2M payments can find practical applications next year, and whether their impact will be an order of magnitude larger than currently perceived.
There's also the concept of AI Commerce, championed by Visa. When AI can be commercialized and used to manage business risks and define responsibilities, people's transaction behavior will fundamentally change.
Finally, as regulations mature, relevant risk management tools will become essential services. Although many standards are still under development, this is an area that requires long-term observation.
Hazel: Thank you, Larry, for your insightful sharing. We encourage everyone to follow SNZ Holding, a well-established investment firm deeply rooted in the Ethereum ecosystem. Interested entrepreneurs are welcome to contact us or SNZ.
[Glossary]
VisaNet, Visa's global payments processing network, is the core brain supporting credit and debit card transactions. Visa is currently piloting a program that allows financial institutions to directly use USDC for fund clearing on VisaNet, exploring the integration of blockchain technology with traditional financial clearing processes.
The four-party payment model is the standard operating framework of the payment industry, involving four core entities: cardholders, merchants, issuers, and acquirers. Visa, as the card network, is responsible for setting rules and providing clearing services to ensure the accurate flow of transaction information and funds among the four parties.
VisaDirect, Visa's real-time payment platform, supports a "push-to-card" service, primarily for peer-to-peer (P2P) transfers, cross-border remittances, and business payments. Visa is currently integrating stablecoin settlement capabilities into this service to address the high delays and costs associated with traditional cross-border remittances.
SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. Essentially, it's a global financial messaging system responsible for transmitting payment instructions (who is to pay whom and how much) between banks, rather than directly handling fund clearing.
Linea is an Ethereum Layer 2 network developed by Consensys. Swift explores how to interface traditional messaging systems with public/private blockchain environments by collaborating with such Layer 2 networks.
ARK is a Layer 1 blockchain designed for payments, launched by Circle. Visa plans to leverage its high throughput to pilot USDC settlements and intends to participate deeply in the network's security maintenance and governance by running validator nodes.
MTN (Multi-Token Network) is a multi-token network concept framework proposed by Mastercard. It aims to build a regulated application environment that supports various digital assets (such as tokenized deposits, CBDCs, and stablecoins), and to improve its underlying compliant trading infrastructure through acquisitions of custody companies and other means.
CBDC (Central Bank Digital Currency) is a digital form of legal tender issued directly by a country's central bank. It has legal tender status and serves as the national base currency in the digital economy era.
Chaordic Organization is an organizational management concept proposed by Visa founder Dee Hock. It combines "chaos" and "order," emphasizing a balance in a decentralized structure that provides ample room for innovation for each node while maintaining overall collaboration and stability through a unified protocol.
Commerce Protocol is a decentralized commerce protocol jointly launched by Coinbase and Shopify. This protocol defines roles such as Operator and Facilitator through smart contracts, aiming to establish a business network where buyers and sellers can directly complete payments and fulfillments through on-chain contracts without intermediaries.
MENA (Middle East and North Africa) is an abbreviation for the Middle East and North Africa region.
Original link: https://mp.weixin.qq.com/s/KWoywbocq3BqaI6nPieYsQ
Disclaimer: This article is a reprint. Readers can obtain more information through the original link. If the author has any objection to the reprint format, please contact us and we will modify it according to the author's request. This reprint is for information sharing only and does not constitute any investment advice, nor does it represent Wu Blockchain views or positions.
I. Introduction to this issue
You may not have a concept of Visa's massive numbers: it processes more than $15 trillion in transactions every year, almost equivalent to China's annual GDP; it connects 130 million merchants worldwide, with 4.3 billion cards pulsating behind it.
But hidden within the gears of this sophisticated machine lies a chronic problem in traditional finance: to make cross-border payments appear seamless, the global banking system is forced to lock up trillions of dollars in pre-deposited funds in its pipes. This money lies dormant in bank accounts, unable to move, solely to cope with the time lag in clearing. While the crypto community is still debating how to "kill" Visa with blockchain, this giant has quietly completed on-chain surgery on its own fundamental artery. Last month, Visa announced the official expansion of its stablecoin settlement pilot program to the United States. This is not just a PR gimmick, but an attempt to completely release the locked liquidity by leveraging the minute-level clearing speed of stablecoins. Although the current annualized settlement volume of $3.5 billion is just a drop in the ocean in Visa's trillion-dollar empire, it reflects Visa's anxiety about "relevance." Visa doesn't care whether the underlying technology is Solana or Ethereum; it only cares about one question: in a future where everything is on-chain, can it continue to define the foundation of asset circulation?
In this episode, we invited Larry Ma, who has experience navigating both Visa's traditional background and the world of crypto investment. We will break down the deep logic behind Visa's integration with USDC, the future evolution of four-party payments, and how ordinary entrepreneurs can find the real "golden slope" amidst the entry of giants in 2026.
This episode is a joint broadcast of "Zhiwubuyan" and ETHTAO. ETHTAO was founded by SNZ and is dedicated to spreading the values and culture of Ethereum in Asia, connecting, nurturing, and guiding a new generation of builders into the Ethereum ecosystem.
[Guest]
Larry Ma
A partner at SNZ Holding, he previously worked at Visa and has over 25 years of global experience spanning e-commerce, digital marketing, financial services, and blockchain innovation.
[Host]
Hazel Hu
Host of the podcast "Zhi Wu Bu Yan" (meaning "Speak Out Without Hesitation"), and a core contributor to the Chinese Public Goods Foundation (GCC). X: 0xHY2049; Jike: A careless Yueyue (a user name).
II. Background Introduction
Hazel: Welcome to another episode of "Speak Out in China," I'm your host, Hazel. Today we have Larry, a partner at SNZ Capital, to discuss an important recent news item: Visa has expanded its stablecoin settlement pilot program to the US market. The stablecoin mentioned here refers to USDC, issued by Circle.
Larry previously had extensive experience at Visa, and also possesses rich experience in fintech, payments, and blockchain. Today, we invited Larry to interpret this news for us and to share his predictions for the potential changes in stablecoins and fintech payments over the next three to five years.
Larry, why don't you briefly introduce your background first?
Larry Ma: Okay, thank you Hazel.
I initially worked in the internet industry, primarily in e-commerce and internet marketing. From 2016 to 2018, I became involved in the Crypto community and experienced some of the early development stages of the Ethereum mainnet.
After that, I joined Visa and systematically learned how the traditional payment system works. During my time at Visa, I also came into contact with CBDC-related projects, such as China's e-CNY. At the same time, Visa also launched strategic explorations related to cryptocurrencies and NFTs during that period.
After the pandemic ended, I officially returned to the Web3 industry in 2024, joining SNZ Holding as CSO. In terms of investment focus, I primarily focus on the payments sector, as this is the area I am most familiar with.
Looking back at the development path of payments, we can find several important stages: early internet payments, the card organization system represented by Visa and Mastercard, CBDC led by the central government, and the early experiment of blockchain as peer-to-peer "digital cash".
These changes were significantly accelerated during the pandemic. On the one hand, contactless payments in traditional payment methods became rapidly widespread; on the other hand, the development of blockchain and stablecoins also accelerated simultaneously.
This is why we've seen stablecoins truly gain mainstream acceptance shortly after the pandemic ended—no longer just on-chain payment tools, but gradually being adopted by traditional finance and FinTech, entering real-world payment and settlement systems. In the future, stablecoins may even serve as underlying settlement tools in capital markets.
III. Deciphering the Story Behind the News
Hazel: Now let's get back to today's core news. Visa is expanding its stablecoin settlement pilot program to the United States, allowing some of its U.S. card issuers and acquiring partners to use USDC instead of fiat currency to settle transactions on VisaNet.
This sentence actually contains a lot of information. Larry, could you explain what it specifically means?
Larry Ma: First, it's important to understand that Visa operates on a typical "four-party payment model".
Simply put, one side is the card issuing side, which includes the issuing bank and the cardholder; the other side is the acquiring side, which includes the acquiring bank and the merchant. Visa, as a card organization, connects these two ends, but does not directly hold user funds.
This pilot program did not change Visa's four-party payment structure. Essentially, it simply introduced the stablecoin USDC as a settlement medium in the clearing and settlement process between the issuing bank and the acquiring bank.
For example, after a user makes a purchase with their credit card, they may pay their credit card bill monthly; however, for the issuing bank, it needs to conduct one or more clearing and settlement transactions with Visa every day. The core issue of the current pilot program is whether these regulated financial institutions can use USDC, instead of the US dollar, to complete high-frequency, high-efficiency fund settlements through VisaNet.
Therefore, USDC here is not for ordinary users, but is used in the back-end settlement layer between banks and Visa.
Hazel: That does sound like a rather "back-end" change. You just mentioned the four-party model. Actually, China's payment system is quite different from international card organization systems. Could you explain that to everyone?
Larry Ma: Many early internet wallets in China were essentially third-party payment systems, or even "internal circulation" systems within the platform. Later, as the central bank promoted the disconnection of direct connections, funds had to be held in custody by banks to prevent non-financial institutions from accumulating funds and engaging in lending-like or self-circulating businesses.
Against this backdrop, infrastructure such as NetsUnion and UnionPay have gradually taken shape, and China's payment system is becoming increasingly similar to the international four-party structure, only with different paths and regulatory logic.
Hazel: I understand. Now, back to the pilot program itself, there are actually two opinions in the market: one is that it's just a small-scale pilot; the other is that it's a major boon for USDC, Circle, and even the entire stablecoin industry. But in the short term, the stock price doesn't seem to have reacted significantly. Larry, what's your take on its practical significance?
Larry Ma: Many people are quite sensitive to PR-related information, and expect it to immediately translate into a stock price increase upon seeing such news. However, from Visa's perspective, this is actually a long-term, gradual process.
Looking back, Visa had already conducted cross-border remittance tests in Nigeria using USDC during the pandemic, though it wasn't a formal commercial project at the time. They later experimented with using USDC to settle funds with overseas sellers in various scenarios.
In 2022–2023, Visa partnered with Crypto.com to experiment with USDC for clearing and settlement on the card issuance side. This time, it simply brought this path back to the United States, working with crypto-friendly sponsor banks like Lead Bank. Therefore, it wasn't a sudden event, but a natural extension of years of exploration. From this perspective, the more significant meaning of this news is that stablecoins have been incorporated into the actual operating logic of the mainstream payment system, and are no longer just "proof of concept."
Hazel: I also noticed what you just said. Visa mentioned in its press release that since it started promoting stablecoin settlements in 2023, by the time this news was released on November 30, the scale of stablecoin settlements had reached an annualized operating level of $3.5 billion.
The 2023 you mentioned should also include some previous tests in Nigeria; and I remember there was a news article from Visa in 2023 saying that they had conducted an experiment on the Ethereum testnet, moving fiat currency settlement logic onto the chain for testing. In short, various collaborations and experiments have actually been going on for quite some time.
What I'm curious about is how to interpret this figure of $3.5 billion annualized? Just how large is that?
Larry Ma: If you look at the stablecoin market as a whole, this is actually a very small number.
If you look at other publicly available data, you'll find that the overall transaction volume of stablecoins last year was enormous. So, looking at this number alone, it's not particularly striking. Visa actually started internally tracking crypto-related transactions quite early on. Around 2020, they first systematically examined how many transactions in VisaNet's clearing and settlement were related to cryptocurrencies (at that time, they weren't even necessarily stablecoins). Their method at the time was to include any transaction identified with a crypto indicator during VisaNet's clearing and settlement process. I remember one milestone announced at the time was that, since VisaNet's inception, the cumulative transaction volume related to cryptocurrencies exceeded $1 billion for the first time.
The $3.5 billion annualized figure mentioned now is more likely calculated as follows: select a specific month (such as October or November), calculate the settlement amount completed through stablecoins in that month, and then multiply by 12 to obtain an annualized number.
For Visa, this is certainly a milestone; however, when considering the overall usage of stablecoins in payment scenarios, it is still a very early and very small part. Because regardless of the statistical methods used, after excluding on-chain transactions, arbitrage, DeFi, and other activities, the consensus is that the transaction volume of stablecoins in real-world payment scenarios is at least in the trillions of dollars in TPV.
Hazel: So, does that mean the balance tied up in USDC will actually be smaller? Because payment scenarios involve high turnover, right? USDC might only stay briefly before being exchanged back into fiat currency. Even if transaction volume increases, the balance tied up won't be particularly large.
Larry Ma: Yes, that is a core advantage of using USDC, especially for issuing and acquiring banks.
In the traditional model, issuing banks and acquiring banks need to pre-deposit a certain amount of funds in a bank account designated by Visa to ensure that there will be no shortage of funds when clearing and settling with Visa every day.
If we follow the traditional banking system, there will inevitably be time constraints. In the US, the fastest it can be is close to T+0, but it's still essentially subject to the rhythm of the banking system. The result is: settlement once a day, at most twice. For security, an additional working capital must be held in the account.
Using stablecoins, theoretically, funds could be credited within minutes. This would significantly reduce the required prefunding size, allowing the same scale of business to be supported with less capital.
Therefore, it essentially improves settlement speed, operational efficiency, and capital efficiency.
Hazel: I discussed this issue with AI for a long time yesterday. I was also thinking that "minute-level" settlement certainly doesn't mean settling each transaction in real-time, right? If that were the case, the failure rate would actually be higher. It's more likely that multiple transactions are aggregated and then settled once.
Larry Ma: It's definitely not true real-time settlement yet. Visa sets specific cut-off times in different regions. As long as you ensure sufficient funds in your account before these times, Visa can complete the settlement for you on the same day.
Globally, regardless of whether stablecoins are used, Visa still primarily employs batch processing for currency clearing rather than a continuous, real-time settlement model.
This is different from systems like the CLS Group, which specializes in real-time foreign exchange settlements among banks.
Hazel: You just mentioned starting to do the statistics at the end of 2020. I also found a news article saying that Visa officially announced in 2021 that it would include USDC in its settlement infrastructure. I even saw a rather old news article at the time—they did a related presentation at Clubhouse, I wonder if anyone remembers it.
Larry Ma: Clubhouses were really popular back then. You could consider 2021 as a publicly announced milestone, but in reality, many actions had already begun before that. For example, if you look into it, you'll find that Visa invested in Anchorage's Series B. Visa's overall strategy has always been to start with the underlying infrastructure. At the time, Anchorage, as an institution providing custody and clearing infrastructure, was a crucial link.
USDC settlement relies on compliant institutions to complete the final custody and clearing, and Visa itself does not directly provide custody capabilities.
Hazel: Anchorage, which you mentioned, is the same institution that partnered with Visa back then, right? It's kind of a crypto-native "bank"?
Larry Ma: To be more precise, Anchorage obtained its National Trust Bank license quite early on. This allows it to handle asset custody and participate in clearing-related businesses, but it doesn't engage in traditional deposit-taking. Simultaneously, it can serve as back-end infrastructure, providing white-label custody and settlement services to banks. Therefore, the stablecoin white-label solutions offered by Paxos and Anchorage are basically based on this architecture.
Hazel: So the banks participating in this pilot program are Cross River Bank and Lead Bank, right? What are the roles of these two banks?
Larry Ma: Both of these banks are Visa's sponsor banks. They participate in both card issuance sponsorship and some acquiring business, acting as both card issuers and acquirers respectively. Anchorage, on the other hand, is more at the back-end infrastructure layer, responsible for custody and settlement support, and does not directly appear in the front-end architecture disclosed in this news.
Therefore, when understanding the whole system, you will find that this news focuses on the settlement relationship between the issuing bank, the acquiring bank and Visa, rather than the underlying custodian institution.
Hazel: I saw some listeners discussing Lead Bank in the group, and most people felt it was a relatively well-known bank that was quite friendly to cryptocurrencies. If you're looking for a partner bank in the US, many people would think "it's a good fit." But recently, it seems that precisely because of these businesses, it's facing more regulatory pressure.
Larry Ma: Yes. Both of these banks were actually quite typical community banks in their early days.
For example, Cross River Bank was originally a community bank in New Jersey; Lead Bank, after being acquired in 2022, gradually transformed itself. These types of banks are characterized by relatively low operating costs, a affinity for FinTech, and a willingness to act as sponsor banks, collaborating with various fintech companies.
They typically don't directly "touch" crypto assets, but they can provide banking service interfaces for crypto-friendly FinTech. This is quite different from the situation in China. Most internet banks in China are newly established and have a short history; while many of these banks in the US have decades, or even close to a century, of history, and have simply shifted to new FinTech directions through mergers and acquisitions or business adjustments.
IV. Payment Wars and Blockchain
Hazel: Yes, I also think this is quite unfamiliar to Chinese users. In China, we mostly see "new banks"; while in the US, there are many long-established community banks that are transforming to serve new fintech businesses. The paths are quite different.
Let's return to the choice of blockchain. We mentioned earlier that Visa conducted tests on Ethereum in 2023, but this time the pilot uses Solana, not the Ethereum mainnet, and not even a Layer 2 blockchain like Base or Arbitrum. What do you think are the reasons behind this?
Larry Ma: If you look back at Visa's earliest cryptocurrency white paper, it actually discussed the issue of network selection. At that time, Ethereum was definitely the top choice.
Solana later made significant progress in terms of high throughput and speed. I remember that Visa was already using Solana when they partnered with Crypto.com, so this wasn't the first time they used Solana, but rather a continuation of that strategy.
However, Visa's overall strategy is chain-agnostic. This means Visa doesn't tie itself to any specific chain. Whether it's the Ethereum mainnet, Solana, or the Layer 2 networks you mentioned like Base and Arbitrum, Visa is willing to cooperate as long as there's genuine demand. From a broader perspective, Visa's goal is to build a network of networks: as long as payment demand exists, it wants to integrate its payment credentials, allowing funds and payment capabilities to flow across different networks.
Hazel: I saw an interview with the Head of Crypto at Visa before. He mentioned that Visa initially tried many blockchains, but was stuck on the issue of unstable and high gas fees for a long time; however, they couldn't bypass the EVM ecosystem because it was too big to ignore. So it actually took them quite a long time to solve this problem.
Larry Ma: Yes. However, the situation is quite different now than it was a few years ago. From 2024 to 2025, Ethereum's own upgrades, coupled with the development of various Layer 2 technologies, have significantly improved the overall throughput and fee structure. Gas fees have decreased considerably compared to the past. The next year will likely be a phase where scaling and institutionalization proceed in parallel. Therefore, I am not worried that Ethereum will not participate in Visa's stablecoin settlement system in the future; the probability of this happening is actually quite high.
Hazel: I have a more technical question, which GPT also posed to me. If we use a two-tier architecture, such as Base or Arbitrum, will there be any finality issues? Because theoretically, the final confirmation of the two-tier architecture still needs to go back to the first-tier architecture, right?
Larry Ma: Technically speaking, the security of Layer 2 is indeed guaranteed by Layer 1. But precisely because of this, organizations don't have to bear the full security costs of Layer 2 themselves.
For many organizations, using a mature Layer 2 network is actually more economical and realistic than maintaining a new Layer 1 chain themselves. This is a better choice in terms of liability boundaries and cost structure.
Hazel: I'm mainly referring to the question of "whether the money has actually been received." For example, from a legal or regulatory perspective, would there be a requirement that the final step must be confirmed at Layer 1? Because Solana itself is Layer 1, once the transfer is complete, it's a transfer; but wouldn't Layer 2 be logically more complicated?
Larry Ma: Here we actually need to distinguish between two concepts: one is technical finality, and the other is legal or regulatory finality. On-chain technical confirmation is one thing, whether regulators recognize this confirmation as "final settlement" is another. Often, the real disagreement lies not in the technical differences between different chains, but in the connection between technical finality and legal finality.
Hazel: I understand. In other words, as long as it's legally and regulatoryly acceptable, this issue itself isn't a particularly big obstacle.
You just mentioned ARK. ARK is the chain launched by Circle, and its testnet just went live in November. I remember we participated in ARK events when we were in Latin America. Visa also mentioned that it might use ARK for USDC settlements on its network in the future and run validator nodes after the ARK mainnet launch.
If ARK joins this system, will its role be the same as Solana, Ethereum, or other future chains? Or will it be different?
Larry Ma: ARK itself is a Layer 1 blockchain designed specifically for payment scenarios, so its on-chain structure and participant composition may have a stronger institutional component.
However, from Visa's perspective, ARK is just one of many blockchains it supports. Circle and Visa have a cooperative relationship on multiple levels, so it's natural for them to experiment with ARK.
However, in terms of actual impact, I personally think that ARK's PR significance may outweigh its short-term practical impact. After all, ARK is still in a relatively early stage.
If we only look at it from the perspective of "accessing the Visa network", there is actually no essential difference between its role and Solana's.
Hazel: Well, there's a question that might apply to all discussions about "payment chains": How do you understand why Circle insists on having its own Layer 1? Or rather, why does it have to have its own chain?
Larry Ma: As everyone has seen, institutions like Tyler have already built several Layer 1 blockchains, and Stripe has also created Tempo. For Circle, since I have issued a stablecoin, whether this coin runs on my own blockchain directly affects my ability to capture value and my control over the entire ecosystem.
Logically, they would naturally choose to create their own Layer 1, hoping to occupy a core position in the entire ecosystem. However, we can also see from past industry experience that "building an ecosystem" and "creating a product," or simply "issuing a stablecoin," are completely different things.
Whether this chain can ultimately function remains to be seen: are the existing institutions and ecosystem participants truly willing to migrate to their own chains? Or will the market eventually offer other options, or even a hybrid distribution?
I think only time will tell.
In addition, SNZ is also a member of ARK, which was officially announced some time ago, so we are continuing to follow ARK's future development.
Hazel: One thing I've always been curious about is this: everyone knows that not all chains will survive in the end, right? Some chains just can't build their ecosystems. But even so, people are still willing to keep trying. Do you think this is because it's a "low-probability but high-reward" gamble? Or is it because the overall landscape is still uncertain, so everyone has to try things out first? Or will it eventually lead to a multi-chain coexistence?
Larry Ma: From a strategic perspective, I'm more inclined to believe that this is a way to continuously consolidate and strengthen its own presence. But in terms of results, I don't think that a situation of "one chain dominating" will ultimately occur.
A more likely scenario is the coexistence of multiple chains, with each chain forming its own distinct application boundaries and scope. Ultimately, the key question is where the entire ecosystem will find a new equilibrium.
V. A chaotic battle among multiple parties: who will emerge victorious?
Hazel: If multiple chains coexist, will Visa ultimately act more like a "router"? For example, different payments take different clearing paths, and Visa is responsible for scheduling and connecting them in the middle?
Larry Ma: This is actually very much in line with Visa's consistent thinking. Visa's concept of "network of networks" essentially means that it wants to be able to access various different networks—whether it's Web2 or Web3.
For example, wallet payment networks in traditional markets, Layer 1 in blockchain, and even Layer 2.
Visa's goal is to allow its payment credentials to flow freely between these networks to complete payments. Of course, in practice, the differences will be significant depending on the region and regulatory environment. Visa faces considerable difficulty entering certain markets, such as non-US markets or gray/semi-gray scenarios using USDT, where its presence will be much weaker.
Hazel: I understand. It is indeed more difficult in some less formal or gray markets.
I have another question, which might be a bit more specific. For example, Circle also has its own Payment Network, right?
Larry Ma: Yes.
Hazel: There are so many people wanting to build "networks" right now, and judging from PR papers, it's sometimes hard to distinguish them. So, what's the core difference between Circle's Payment Network and networks like Visa?
Larry Ma: Circle's Payment Network is more like a loose alliance of institutions that use Circle's stablecoin and related products. You can think of it as Circle's partner network or consortium network.
If we draw an analogy with Visa, its member network shares structural similarities. Looking at the members of the Circle Payment Network, there are card issuers, acquiring institutions, and those involved in remittance, operations, and clearing—the roles are quite diverse. This reflects Circle's strategic direction as it attempts to gradually evolve from a "stablecoin issuer" into a "payment network."
Visa itself has been deeply involved in cross-border payments since its early days as a card organization. Whether it's card payments or bank-to-bank systems, cross-border transactions have always been one of its core capabilities.
The current changes are simply that some card products have started to be linked to stablecoins, and more cross-border card issuance and cross-border consumption scenarios have emerged. These are essentially still cross-border payments.
At the product level, Visa originally had Visa Direct, as well as B2B cross-border payment capabilities gained through the acquisition of Earthport (formerly Earthport). Now, Visa is integrating these capabilities to form the new Visa Direct system, combined with a stablecoin settlement layer, to address issues such as remittance and cross-border trade payments. So you'll find that this thread has always been there; only the underlying tools and technologies have been constantly evolving.
Hazel: For example, if USDC is introduced into this system, can it bypass SWIFT? Or, in the long run, is it challenging SWIFT?
Larry Ma: You can understand it this way: the US dollar itself actually operates on multiple different payment rails. In other words, there isn't just one way for the US dollar to "move".
Card organizations are a crucial link in this chain. If you look back at a previous US law—UIGEA—which was designed to regulate internet gambling and prohibited US financial institutions from providing related services, that law clearly defined the "channels" through which funds could flow.
While cash doesn't exist on the blockchain, the banking system offers various channels such as ACH, wire transfers, checks, and various A2A payment methods. Card organizations are one such railroad, along with various APMs like PayPal and gift cards, which have always coexisted. Therefore, from this perspective, SWIFT and card organizations inherently play different roles in cross-border payments. SWIFT primarily functions as a messaging system, while card organizations handle clearing and settlement; their roles are not entirely overlapping.
Hazel: Yes, but in practice, when you send a message, you still need to notify the central bank or its subordinate banks in the other country via SWIFT, right?
Larry Ma: Yes, the final clearing and settlement are still done by the banks, while SWIFT is responsible for message transmission.
Therefore, from a realistic perspective, these two paths will coexist for a long time to come, and a complete replacement is unlikely in the short term. However, SWIFT is also changing. Recently, they announced at a conference that they are conducting a pilot program combining off-chain and on-chain technologies, using ConsenSys and Linea. This is essentially the same logic behind Western Union and MoneyGram's statements about embracing blockchain—they cannot ignore it.
SWIFT has been continuously innovating internally in recent years. For example, it launched SWIFT GPI to solve the problems of incomplete information and tracking difficulties in traditional messages, allowing more information to enter the message network. These adjustments and upgrades have actually been ongoing.
Hazel: So what exactly will the collaboration between SWIFT and Linea be? Will it simply involve putting information on the blockchain, or will it be able to do much more?
Larry Ma: To be honest, I'm not quite sure yet. The collaboration with Linea is relatively new.
We did talk to some people in South America before, but overall it seems to be in a relatively early stage. What is their ultimate scope? What will be on the blockchain? There's no clear public statement yet.
Hazel: So why did you choose Linea? Did anyone discuss this choice, or was it a more natural result?
Larry Ma: From a realistic perspective, the range of choices isn't actually that wide. If you look at the major Layer 2 options: Base is already part of the Coinbase + Circle system, Arbitrum's roadmap is basically confirmed, and Polygon's own strategy is quite clear. Considering all this, Linea might be the only option that's still relatively "worth discussing".
Hazel: We've talked a lot about Visa's strategy, and I personally feel its logic is quite clear. But I'm also curious about how Visa's overall encryption strategy is positioned? Having worked at Visa before, from an organizational structure and strategic perspective, is it a comprehensive, long-term strategy, or just a project driven by a specific department?
Larry Ma: This question is a bit beyond my pay grade, both when I was at Visa and now from an external perspective. But I can share my observations. Visa's overall encryption strategy can actually be traced back to 2018, much earlier than many people realize. At that time, there were already relatively systematic discussions and documents internally, clearly defining how this path should be taken.
During the pandemic, the overall progress was still along the established strategy. There was a noticeable pause due to the FTX incident. After 2023, some plans were restarted. From an external perspective, this was a very methodical process, starting with infrastructure and then moving to the application layer. For example, there was the Cryptocurrency white paper first, followed by the NFT white paper; this is a natural evolution from the foundation to the application.
In terms of organizational structure, if we break down Visa's business units, there are roughly three parts that are related to its encryption strategy: Consumer, Commercial & Money Movement (CMS), and Visa Ventures.
The Head of Crypto you mentioned earlier leans more towards innovation and product development, and is more closely related to the Consumer side. CMS now focuses more on fund flows, such as remittance and settlement in cross-border trade. Visa Ventures, in addition to investing in crypto, also invests in AI and other payment-related technologies. Within crypto, stablecoins are probably their second biggest focus after infrastructure. They see stablecoins more as a payment medium, focusing on the new possibilities they can bring at the structural level. Some of their previous investments, such as Anchorage, and earlier stablecoin infrastructure projects, all follow this logic.
Hazel: So, what are the significant differences between Visa and Mastercard in their stablecoin strategies? After all, they are the two largest card organizations in the world.
Larry Ma: From an external perspective, the two companies do have different strategies. I haven't worked inside Mastercard, so my judgment is based solely on publicly available information and industry discussions.
Overall, Mastercard is emphasizing its MTN in this cycle. It's more like building an application network supporting multiple assets and tokens. Therefore, you'll see their investment and acquisition activities are primarily focused on supplementing their underlying capabilities. Recent market rumors suggest they might acquire Zero Hash; if true, this would complete their capabilities in custody, OTC, and Crypto-to-Fiat conversion. At the upper layers, Mastercard's focus is on the MTN itself, while in terms of asset support, they've adopted a diversified approach: including USDC, Paxos stablecoins, PayPal's PYUSD, and some traditional financial institutions' USD stablecoins, all within their support scope. So, overall, Visa and Mastercard's strategies for stablecoins are indeed different.
Hazel: Looking at investments and acquisitions of leading stablecoin startups, Stripe invested in Bridge, Mastercard is rumored to be acquiring Zero Hash, and Visa invested in BVNK. What are the differences in the positioning of these three deals?
Larry Ma: This is a sensitive issue, and I haven't had access to any internal materials, so I can only analyze it based on external observations and industry exchanges.
Let's start with Stripe. Stripe itself is still in a high-growth phase in the Web2 and traditional payments sectors, making it a typical Tier 1 Fintech. Its acquisition of Bridge, along with subsequent acquisitions of Wallet and Tempo, is essentially laying the groundwork for its "second growth curve." Once Stripe completes this architecture, it can form a relatively complete closed loop in its Stablecoin business. Bridge's core capability is essentially a Stablecoin API + Orchestration platform, particularly adept at connecting cross-border trade and enterprise payments. From Visa's perspective, Stripe's acquisition of Bridge is actually highly regarded.
Let's look at Visa. Visa has consistently been an early mover in the stablecoin space, investing in underlying infrastructure like Anchorage early on, and later in BVNK. Visa's core strategy isn't to start a "second front," but rather to integrate stablecoins directly into the VisaNet system as a new settlement medium.
VisaNet itself supports a dozen or even twenty clearing currencies. Even during the pandemic, Visa had already incorporated USDC into its clearing system—its status within the system is equal to that of clearing currencies like the US dollar and the euro. Therefore, Visa's approach is to integrate stablecoins into its existing network, rather than creating a separate Layer 1 network or a completely new one.
In contrast, Mastercard has clearly stated its intention to develop MTN, so they will be more proactive in supplementing the underlying assets and infrastructure, which is why they are considering assets like Zero Hash.
Hazel: Can I understand it this way: Stripe still goes through card organizations for now, but is there a possibility it could pose a certain "threat" in the future? For example, like Revolut, where I can transfer funds within Revolut without going through card organizations for clearing. If Stripe develops its own complete blockchain and internal network in the future, would this "direct internal connection" system impact card organizations?
Larry Ma: You can understand it this way. If Visa doesn't engage with stablecoins at all, then all future on-chain transfers, payments, and interactions will be completely unrelated to card organizations. Only when stablecoins are integrated with Visa's product and service ecosystem can Visa continue to participate in future payments. So from Visa's perspective, their biggest concern isn't being "disrupted," but rather losing relevance. If a new payment "continent" emerges in the future, and Visa doesn't participate, then that market will naturally be irrelevant to them.
Hazel: This assessment is actually quite similar to the analysis of one of our previous guests. He believes that Visa's core capabilities that it might retain in the future include: identity and compliance intermediaries (KYC/AML), stablecoin clearing APIs, integration with large enterprise B2B payment platforms, issuing bank outsourcing and affiliate network operations, and SaaS-based compliance and risk control APIs. However, he also predicts that Visa may lose some revenue streams, such as commissions on cross-border payments, commissions on small-amount POS transactions, and deposit and withdrawal fees from CEXs, potentially leading to an overall revenue decline of 20%–30%. What's your take on this assessment?
Larry Ma: Personally, I feel this assessment is a bit too radical, essentially "cutting off" most of Visa's existing business. If you look at Visa's most recent financial report, Visa's quarterly net revenue exceeds tens of billions of dollars, with a gross margin of about 67%. And the vast majority of this revenue does not come from so-called API middleware, identity authentication, or compliance services. In fact, Visa's ID & Risk-related revenue accounts for a very small percentage of its overall revenue, almost negligible.
More importantly, Visa's vision has never been to be a middleware company. Whether it's DPI, API, or compliant SaaS, these are not Visa's core positioning.
Visa's true core asset is its Visa Rules—a set of rules under which all members in the network operate. Therefore, I don't agree with simplifying Visa or Mastercard into "future global compliance intermediaries" or "card issuer alliance agents." This simplification is too direct and ignores their position within the entire payments ecosystem.
As you mentioned before, Visa is a chaotic organization that tries to stand between order and chaos, maintaining rules and stability while leaving room for innovation. If Visa can continue to iterate along this philosophy, its future positioning will certainly change, but it will not be simply categorized into a single role.
Moreover, from a broader perspective, this round of structural changes in payments and finance is likely to be a decade-long cycle, rather than a four-year cycle like that of the crypto market. The longer cycle, the more variables, and the more structural opportunities will be.
Hazel: When I was preparing for the interview yesterday, I specifically checked Visa's stock price. I initially thought that things like crypto and stablecoins might have a significant impact on it, but it seems okay overall; the trend is still fluctuating upwards. So I'm quite curious about Visa's future.
The concept of a chaotic organization you just mentioned could be discussed in more detail. I think many people aren't very familiar with Visa's history. When I was preparing, I did some research and found that Visa's founder wrote a book called *One from Many*. I haven't had time to read it in its entirety myself, but I saw a series of interviews with him on YouTube, about seven episodes long. I then gave all of that information to NotebookLM to help me organize it.
Otherwise, why don't you tell everyone how Visa has developed step by step to where it is today? I think many readers and listeners don't really know.
Larry Ma: Visa's evolution has indeed been very long. It started as an incubation within the banking system, then became a consortium, then a non-profit industry coordination organization, gradually evolving into a privately held for-profit company, and finally a publicly traded company. Almost every stage took decades.
However, from its very beginnings, Visa had a core, and then-advanced, concept—the chaotic organization. At its heart are two concepts: order and chaos. Visa defines itself as an organization that needs both order to maintain stability and chaos to foster innovation; therefore, it should exist in the "edge" between order and chaos. The product that most directly embodies "order" in this system is Visa Rules. It defines the basic rules that all members of the Visa network should follow in their daily operations. But above these rules, a great deal of flexibility is still reserved.
Visa has always emphasized that it is a purpose- and principle-driven organization. In other words, as long as your vision and basic principles are clear and consistent, you can flexibly formulate specific rules and structures according to the actual situation at different times and in different places.
The purpose of this is to maintain overall order while allowing innovation to continuously emerge from the "periphery"—because many genuine innovations often begin at the periphery.
Hazel: How do you think this concept relates to the ideas of "platform organizations" or "governance organizations"?
Larry Ma: Visa, as a consortium in its early days, was itself a very forward-thinking organizational structure. One of its greatest contributions was creating and establishing the "four-party model," which remains the foundation of the global payment network to this day.
Visa is merely a rule-maker and network coordinator, not the "entire" entity within the network. The Visa network comprises numerous members, including banks, fintech companies, payment facilitators, merchants, and users. It's an extremely vast, multi-layered network. Visa Rules, in essence, are a system of rules used to coordinate the flow of funds, information, and payment processing across borders or domestically, involving multiple parties. Visa's core principle is that any card bearing the Visa logo can be used globally, regardless of its country of issuance. This is what Visa emphasizes as payment ubiquity. This is a very powerful concept because it eliminates concerns about local payment methods becoming invalid abroad.
Hazel: I think the "four-party model" itself is quite interesting. Because a three-party model also exists; for example, American Express issues its own cards and handles its own clearing. Early Alipay in China was also a semi-three-party model in the mobile payment era. From an efficiency standpoint, the three-party model seems more efficient, but it's actually harder to scale up significantly. If an institution controls too many aspects, the entire system may become top-heavy.
Larry Ma: Yes, if you compare Amex and Visa, you'll find that Amex is much smaller than Visa. One reason is its limited scalability—because it's too tightly integrated with the banking system.
If we look at some of the early Fintech third-party models in China, the bigger problem actually lies in financial stability and systemic risk, because they are to some extent outside the traditional banking system.
Hazel: Yes, it's actually the lack of openness that ultimately affected overall scalability. Do you think Visa's development path is almost impossible to replicate?
Larry Ma: I don't think it's necessary to replicate this. Almost all truly successful paths are inherently unreplicable because they depend on specific historical conditions and eras. But one thing we can observe is that the entire industry is indeed in the process of evolving from "four-party payment" to future payment models.
The future may still see a four-party model – which is certainly what Visa hopes to see; but it may not be. However, a completely P2P model is also unrealistic – because that would make the regulatory body very ambiguous. Therefore, new protocols and new structural models are likely to emerge.
One example that I've found interesting recently is the Commerce Protocol launched by Coinbase and Shopify. It connects buyers and sellers through an operator/facilitator and smart contracts, enabling payments to be completed on-chain.
Hazel: So this is basically a pure on-chain payment system.
Larry Ma: Yes, essentially it's about building a new, smart contract-based payment network on-chain.
Hazel: Yes, but that would introduce another operator, or a similar mediator role. So how should this role be defined in the future?
Larry Ma: First, the operator here cannot "own" the transaction, nor can it block the transaction itself. It can participate or not, which is actually a very interesting setting. This transaction can only be "owned" and decided by the initiator and receiver of the transaction; whether it occurs and whether it is completed are ultimately determined by these two parties. As an intermediary operator, it provides more added value, such as in terms of regulatory and compliance aspects, or as a participant in certain conditional judgments. But the core remains the same: whether the transaction is valid is ultimately decided by the buyer and seller.
Hazel: Following these paths, what do you think Visa needs to do next to better leverage its strengths? How can it avoid being left behind in the evolution of future payment methods?
Larry Ma: From Visa's perspective, the first point is that Visa actually launched its blockchain and stablecoin strategy quite early. Whether it's card issuance, acquiring, or the custody aspect, Visa has explored these areas and made some attempts and investments on the application side. From an external perspective, a core question Visa needs to consider going forward is: will its four-party model need to change?
Should we continue with the four-party model, or evolve into a new form somewhere between the four-party and P2P models? For example, should we incorporate blockchain and stablecoins into VisaNet, forming the "Network and Networks" relationship we mentioned earlier; or take a more radical approach and directly "put Visa itself on the blockchain"? These two paths are completely different in difficulty and present enormous challenges. The key is to clarify: which functions should be natively on-chain? Which functions should be "grafted" onto existing Web2 payment networks? Where exactly does control lie?
Visa has always positioned itself on the boundary between order and chaos, but this must be predicated on ensuring the existence of order first. Currently, these questions do not yet have completely clear answers. I believe that through continuous exploration in real-world business scenarios, and after reaching a certain scale, we can gradually make clearer judgments.
The second very important question is whether Visa should shift from its original B2B2C model to a certain degree of 2C.
Visa's traditional model has always been to connect card issuers and acquiring banks with merchants and consumers. However, in the context of stablecoins, stablecoins are not only payment tools but also a form of asset.
Should we directly target end consumers (C-end)? This question has been discussed repeatedly internally, but we often end up going back to the old path. However, I believe this question will continue to be discussed in the future—the key is not "whether to go to B2C," but "to what extent to go to B2C."
Looking at the bigger picture, whether it's the internet or the crypto industry, the overall direction is that decision-making power is gradually shifting from traditional financial institutions and intermediaries to merchants, SMBs, and consumers.
When this balance shifts, Visa, as a card organization and a coordinator of multi-party payment value transfers, will inevitably need to readjust its positioning and control methods. This change is unavoidable; the key lies in whether it can adapt to the change and adjust in a timely manner.
VI. Entrepreneurs' Focus
Hazel: This is a choice that giants must face when their strategies and forms change. But for ordinary people or entrepreneurs, they don't actually have that strong ecosystem and resource advantage. You're also investing in SNZ Holding now. With stablecoins so hot and giants constantly entering the market, what can entrepreneurs still do?
Larry Ma: I think we can look at it from a different angle. Many people, when they talk about payments, think of the system as having a lot of legacy issues and being very complex. But this is precisely the result of decades of gradual accumulation in the payment system; it is inherently a multi-layered and multi-structured system. Therefore, it's unlikely that a simple, purely on-chain approach can replace or reconstruct the entire payment system all at once. The evolution of the payment system will definitely be a long-term, gradual, and hybrid architecture process. My advice to entrepreneurs is not to try to change the entire payment ecosystem from the start. First, find a point of entry that you can make, a specific problem that is already big enough at the current stage, and do that well first.
Take Stripe as an example. Its early work was very simple: as the internet developed, it provided developers with more user-friendly APIs, reduced the complexity of payment systems, and enabled developers to quickly build payment capabilities in e-commerce environments.
This is a very clear and restrained mission. As its scale grew, Stripe's business lines gradually expanded to acquiring, payment method integration, and fund management, slowly connecting the links. Even today, its core focus remains primarily on Web2, rather than a complete shift to Web3.
This track is very long, with a long slope and thick snow, making it entirely possible for a very large company to emerge from it.
Hazel: This reminds me of Allscale, whom we interviewed in our last episode. They recently received investment from YZ Labs, and they also started with a very specific entry point like "invoices" and then gradually expanded, rather than trying to reconstruct the entire system from the beginning.
Larry Ma: Yes, the restructuring of the payment ecosystem cannot be accomplished by a single company. Ultimately, it will require multiple companies to work together to form a new ecosystem and balance.
What entrepreneurs need to do is find their niche and entry point, and doing one part well is already very valuable. Just like Visa itself doesn't cover all financial services, for example, it doesn't do deposits and loans; Custody also relies more on investment or partnerships.
Although Visa now has products like VTAP, it doesn't directly participate in building a complete hosting system across the entire supply chain.
Hazel: A few days ago, an article went viral. I don't know if Larry saw it, but it's called "From Start to Give Up: Why I Stopped Doing Web3 Payments," by Yuki. It mentions some points that everyone already knows, such as that this industry isn't about "just making a good product and you'll win." It's about bank relationships, licenses, capital efficiency, and the ability to manage risk in the long term.
Are these the points you consider when communicating with entrepreneurs or investing? I have a concern: if these conditions are absolutely necessary for success, many entrepreneurs might be discouraged from entering the field. It sounds like an industry for seasoned veterans. Do you encounter this issue when communicating with entrepreneurs?
Larry Ma: Yes, we've worked with Peanut in South America, and that's a prime example. Initially, they were developing a payment link-like product, which didn't see rapid growth in Eastern Europe or Turkey, but found a suitable environment and product form in South America. Through DevConnect, they quickly gained influence and growth. However, the underlying technology isn't actually their own; they've integrated with Bridge, Mercado Pago, and Pix.
From a user experience perspective, it's currently ahead of similar applications, but its technological foundation isn't entirely self-developed. This illustrates that innovation in the payment field doesn't mean you have to build all the underlying infrastructure yourself. The key is to understand existing tools and services in the market, select available resources, formulate your own development path, and gradually build a competitive advantage and scale.
The payment ecosystem is extremely complex, with different levels and players in different regions. Entrepreneurs need to find their niche, clarify their long-term direction, aggregate and allocate resources, and drive implementation. As for who will ultimately win, neither Visa nor Stripe could have fully predicted the current landscape.
From an investment perspective, stablecoins are inherently global, meaning they can be accessed across borders from the outset, but they are also subject to regulatory and geographical restrictions. Therefore, we focus on which projects have the potential to grow into new types of infrastructure and service providers that span regions or even the globe.
This is easier to observe in B2B scenarios. The underlying drivers of B2B applications are cross-border liquidity needs, cross-border trade, and remittance demands. Stablecoins and blockchain are excellent vehicles for this, and after addressing compliance and anti-money laundering issues, they can provide a better user experience and service. Therefore, these types of projects are more likely to achieve a certain scale, and due to their inherent cross-border nature, covering three continents or more is a predictable development path.
The entry of industry giants is typically concentrated in North America and developed European countries, where the pace of action is relatively slower, but it will impact local market structures and capital market ecosystems. This is a key area we will be focusing on next year.
For consumer-facing applications, if they attempt to replace the local currency, local regulators will inevitably intervene. Regulations and enforcement vary across countries, but both dollar-denominated stablecoins and local stablecoins will impact the market. We will focus on which projects can truly scale up across multiple regions, potentially becoming the prototypes of the next generation of "new banks," but this is a challenging assessment.
Hazel: I understand. In other words, a project first needs to grow from a regional market to a globally usable platform before it can create a barrier to entry. For example, a platform might perform okay if it's only used in South America, but it might not necessarily win; if it's usable everywhere, it has the potential to become a "rabbit leg product" and gain a leading edge. I still have money in my account that I haven't withdrawn yet, so I'm waiting for the next opportunity to see where I can use it.
Larry Ma: Actually, it's very easy to use. When we were paying attention to it before, most people would look at whether stablecoins could be used through card machines or bank interfaces, but it actually operates through a local payment rail.
Hazel: You just mentioned that Northern Markets could have a significant impact on Capital Markets next year, which is also a key focus for you. What exactly do you mean by that?
Larry Ma: From the perspective of payment, bank deposits and loans to the upper capital market, the three are in a progressive relationship: payment solves the problem of money moving from A to B; bank deposits and loans generate interest through lending; and the capital market forms trading behavior by pricing assets at risk.
Currently, there is increasing certainty regarding legislation on stablecoins globally, and banks are becoming more open to the issue, even preparing to launch their own stablecoins. While breakthroughs in deposit and loan businesses are still difficult, the capital market is expected to become more active next year as the compliance of this three-tiered structure becomes clearer. As a public medium connecting banks, Web3, and capital markets, stablecoins will simultaneously demonstrate the triple effects of payments, cash assets, and settlement tools.
Hazel: This involves a business model issue. Payments are usually just the entry point; the underlying credit is the core profit driver. Do current stablecoin projects primarily earn transaction fees or interest? What changes will there be in the future profit model?
Larry Ma: Stablecoins are first and foremost a medium. Traditional payments are merely a conduit for large institutions and aren't very profitable. But stablecoins have asset attributes—they are essentially cash. In traditional payments, money is just a number in a bank account, and asset transfers occur between banks; but when stablecoins move, the asset itself is in motion, which broadens the scope of payments.
The profit-making logic of stablecoins still revolves around the three core areas of payments, deposits and loans, and financial markets; this fundamental aspect remains unchanged. Whether it's forex (FX), treasury management, or lending, stablecoins are simply a new medium. However, due to their different tracks, flow rates, and programmability, they will generate many innovative use cases that previously required intermediaries.
Hazel: If an entrepreneur comes to raise funds, how would you "interrogate" them?
Larry Ma: I will conduct categorized interviews based on background, focusing on whether he has a deep understanding of the fundamental changes brought about by blockchain. Can he grasp the structural alpha of the system and outperform the beta cycle? Is his proposed solution sustainable?
They typically value peer-to-peer (P2P) payments and on-chain native features, but I will examine their understanding of the current state of affairs. If they don't understand why the existing payment system is the way it is, their changes may not be grounded in reality, making it difficult to transition from the status quo to the new system.
Hazel: Are there any directions that you immediately felt were inappropriate and that you would definitely not invest in?
Larry Ma: I basically don't look at pure stablecoin issuance anymore, because the battleground isn't on innovation at the issuance end. I'm more interested in who can control new circulation methods for stablecoins, or who can play a key controlling role in transaction architecture and services.
Hazel: What about projects like U-Card? That's almost become a meme in the industry.
Larry Ma: Card and cash-based services emerge in every cycle. I believe that cards, as a medium bridging Web2 and Web3 interfaces, will exist for a long time and are necessary.
The question is, who can create something structurally different from the past? Whether it's user experience or fund efficiency. If it's merely about withdrawals or earning fees, there's no fundamental difference. While the current regulatory environment and Visa/Mastercard rules are different than before, potentially giving rise to some new projects, these types of businesses are highly cyclical and could tighten at any time. Essentially, entrepreneurs need to capitalize on this window of opportunity to create more sustainable structural innovations.
VII. Outlook for 2026
Hazel: Would you use the AI track as an analogy for stablecoins? For example, looking for the GPT moment of stablecoins?
Larry Ma: I don't use that analogy. AI and stablecoins are two parallel paths. Although intertwining them makes things more complicated, their development logic is different.
Hazel: People may be wondering if the stablecoin sector will see a large-scale explosion from B2B to B2C.
Larry Ma: The stablecoin industry is unlikely to experience a "Wow Moment" like GPT. AI development is non-linear and leapfrog, hence the amazing feeling of instantaneous intelligence. Stablecoins are more like a process of quantitative change leading to qualitative change.
When stablecoins reach a market capitalization of $1 trillion, there will indeed be a significant change, but this perception will be asynchronous across different regions. Just as China has long since achieved cashless transactions, in the US or Europe, this perception may come later and be more pronounced.
Hazel: You mentioned earlier that you went to Latin America because you needed to do on-site research, and that experiencing things remotely and experiencing them firsthand is indeed very different. Besides what you just mentioned, what other specific experiences did you have there?
Larry Ma: The feeling of being there firsthand is completely different from watching a remote video or reading the news. On-site, you have more freedom and perspectives to explore, and you can gain a richer context.
For example, I spoke with the founder of Peanut for the second time in Latin America. Since our first meeting was remote in June, this face-to-face conversation allowed me to more clearly understand his thought process and the dynamic changes in the project. Secondly, you can personally try the product locally and get feedback directly from people or cashiers; this kind of in-depth market information can only be obtained locally.
Hazel: Besides Peanut, what other products did you use locally that left a deep impression on you?
Larry Ma: I also used FluidKey and Burner, and looked into some privacy wallets and related privacy technologies. Although doing KYC for each one was a bit of a hassle, I tried my best. For example, I had to try Peanut's KYC twice before I passed, and I even asked Claude (Peanut's founder) if there were any other ways. You have to try a product yourself to find problems.
Hazel: You mentioned talking a lot about local teams. Do you have any more specific examples?
Larry Ma: I talked to some Fintech teams that have been active between Brazil and Argentina for many years. They act as a bridge between the payment systems of the two countries and entered the stablecoin industry quite early.
I paid attention to their survival status and market positioning. For example, did they hold PayPal? What were their views on assets like ARS Stablecoin? When we visited, there were already four different peso stablecoins available locally. Observing the development of these non-US dollar stablecoins was very interesting.
Hazel: I'm also curious about "fiat currency on-chain". For example, some projects put Mexican government bonds or non-US assets on-chain for RWA. What are your thoughts on this?
Larry Ma: For these countries, there is no clear adoption driver for local stablecoins within their borders, because people obviously prefer to hold US dollar stablecoins.
However, non-US stablecoins are valuable as Liquidity Pillars for foreign trade. They do not need to go through the traditional banking system every time and can be completed directly through stablecoins. The interest generated by the underlying assets of stablecoins (such as pesos or reals) can be redistributed among banks, cross-border trading counterparts, and users. It prevents US dollar stablecoins from directly impacting local currencies.
Regarding size, the stablecoins in Brazil and Argentina are currently not very large. We need to observe which local stablecoin can be the first to break the $100 million threshold. Once it exceeds this value, it means that it has entered the top 20 global stablecoins, reaching the so-called "edge of order and chaos".
Hazel: Besides Latin America, which markets do you plan to visit next year?
Larry Ma: This year I traveled to the US, Latin America, Europe, and Asia. I think the MENA region is definitely worth visiting next year.
Judging from this year's Fintech Week, Tether has become the recognized Fiat Reference Token in the region, meaning its payment progress is faster than in other areas. Furthermore, the Middle East has gained a degree of freedom in its capital markets through negotiations with the US, and institutional progress is rapid. Therefore, besides North America, the Middle East will be another key area to watch next year in terms of payments and capital markets. As for Africa, we are currently reviewing some projects, but will decide whether to delve deeper into the heartland next year depending on the situation.
Hazel: What are your predictions for 2026?
Larry Ma: First, there's Stablecoin OS. The infrastructure for stablecoins will become increasingly clear. Next year, a complete "puzzle" may emerge, with different companies responsible for different modules, and some companies even integrating the entire system. Whether in terms of payments or compliance, its structure will be further upgraded, and the pricing system will become more defined.
Furthermore, as Clarity's compliance improves, financial institutions in New York and other locations will further confirm the nature of RWA. Stablecoins, as cash and settlement tools, will spur the development of more middleware to bridge the gap between blockchain and traditional finance.
We are more focused on the payment aspect of the integration of AI and Web3. For example, whether M2M payments can find practical applications next year, and whether their impact will be an order of magnitude larger than currently perceived.
There's also the concept of AI Commerce, championed by Visa. When AI can be commercialized and used to manage business risks and define responsibilities, people's transaction behavior will fundamentally change.
Finally, as regulations mature, relevant risk management tools will become essential services. Although many standards are still under development, this is an area that requires long-term observation.
Hazel: Thank you, Larry, for your insightful sharing. We encourage everyone to follow SNZ Holding, a well-established investment firm deeply rooted in the Ethereum ecosystem. Interested entrepreneurs are welcome to contact us or SNZ.
[Glossary]
VisaNet, Visa's global payments processing network, is the core brain supporting credit and debit card transactions. Visa is currently piloting a program that allows financial institutions to directly use USDC for fund clearing on VisaNet, exploring the integration of blockchain technology with traditional financial clearing processes.
The four-party payment model is the standard operating framework of the payment industry, involving four core entities: cardholders, merchants, issuers, and acquirers. Visa, as the card network, is responsible for setting rules and providing clearing services to ensure the accurate flow of transaction information and funds among the four parties.
VisaDirect, Visa's real-time payment platform, supports a "push-to-card" service, primarily for peer-to-peer (P2P) transfers, cross-border remittances, and business payments. Visa is currently integrating stablecoin settlement capabilities into this service to address the high delays and costs associated with traditional cross-border remittances.
SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. Essentially, it's a global financial messaging system responsible for transmitting payment instructions (who is to pay whom and how much) between banks, rather than directly handling fund clearing.
Linea is an Ethereum Layer 2 network developed by Consensys. Swift explores how to interface traditional messaging systems with public/private blockchain environments by collaborating with such Layer 2 networks.
ARK is a Layer 1 blockchain designed for payments, launched by Circle. Visa plans to leverage its high throughput to pilot USDC settlements and intends to participate deeply in the network's security maintenance and governance by running validator nodes.
MTN (Multi-Token Network) is a multi-token network concept framework proposed by Mastercard. It aims to build a regulated application environment that supports various digital assets (such as tokenized deposits, CBDCs, and stablecoins), and to improve its underlying compliant trading infrastructure through acquisitions of custody companies and other means.
CBDC (Central Bank Digital Currency) is a digital form of legal tender issued directly by a country's central bank. It has legal tender status and serves as the national base currency in the digital economy era.
Chaordic Organization is an organizational management concept proposed by Visa founder Dee Hock. It combines "chaos" and "order," emphasizing a balance in a decentralized structure that provides ample room for innovation for each node while maintaining overall collaboration and stability through a unified protocol.
Commerce Protocol is a decentralized commerce protocol jointly launched by Coinbase and Shopify. This protocol defines roles such as Operator and Facilitator through smart contracts, aiming to establish a business network where buyers and sellers can directly complete payments and fulfillments through on-chain contracts without intermediaries.
MENA (Middle East and North Africa) is an abbreviation for the Middle East and North Africa region.
