Visa and Mastercard Back New Dollar Stablecoin to Rival Tether and USDC
A coalition including Visa and Mastercard is developing a US dollar stablecoin that retains reserve earnings, positioning it to challenge the two dominant players.
A broad coalition of financial and crypto companies, anchored by payments giants Visa and Mastercard, is moving to launch a US dollar-pegged stablecoin — a development that signals traditional finance's deepening ambition to compete directly in the digital-asset payments corridor.
What sets this venture apart from its predecessors is the reserve earnings model: the consortium intends to keep income generated by the underlying dollar reserves rather than passing it to token holders. That design choice is significant because reserve yield — earned by investing backing assets in short-term Treasuries — has become one of the most lucrative aspects of running a stablecoin at scale.
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The stakes are substantial. The project would enter a market currently dominated by Tether's USDT and Circle's USDC, the two largest stablecoins by market capitalization. Both have benefited enormously from elevated interest rates, with reserve income translating into billions of dollars in annual profit for their issuers. A well-capitalized entrant backed by Visa and Mastercard's global merchant networks could credibly challenge that duopoly in a way that previous attempts have not.
From a structural standpoint, the involvement of legacy card networks adds a layer of regulatory legitimacy and distribution reach that pure crypto-native issuers lack. Visa and Mastercard collectively touch hundreds of millions of merchants and cardholders worldwide, meaning any stablecoin they co-sponsor could achieve mainstream adoption far faster than rivals that have had to build acceptance infrastructure from scratch.
The announcement arrives as Washington edges closer to formal stablecoin legislation, a regulatory backdrop that could simultaneously legitimize new entrants and raise compliance barriers. Whether this coalition can convert brand trust and network scale into genuine market share against entrenched incumbents remains the defining question. Continue reading at Cointelegraph.
