Visa Pushes Deeper Into Stablecoins With New Aquanow Partnership
Visa, a global leader in digital payments, is significantly expanding its use of stablecoins for transaction settlement within the Central and Eastern Europe, Middle East, and Africa (CEMEA) region.
The move by Visa comes as part of a new strategic partnership with Aquanow, a prominent crypto infrastructure company, aiming to enhance the efficiency of cross-border payments.
Announced on Thursday, the collaboration will enable Visa to settle transactions using approved stablecoins, such as USDC, a dollar-pegged stablecoin. This initiative is designed to mitigate operational friction, reduce associated costs, and dramatically shorten settlement times for financial institutions operating in the expansive CEMEA corridor.
Also read: Visa Tests Direct Stablecoin Payouts for Creators and Gig Workers
Visa Modernizing Payment Infrastructure
Visa’s partnership with Aquanow is a strategic step to digitize the backend of financial transactions, enabling 24/7 settlement capabilities. This represents a substantial departure from traditional systems, which are often constrained by banking hours, geographic boundaries, and multiple intermediary layers that can add complexity and delays.
Godfrey Sullivan, Visa’s head of product and solutions for the CEMEA region, highlighted the transformative potential of this integration.
“Our partnership with Aquanow is another key step in modernizing the backend rails of payments, reducing reliance on traditional systems with multiple intermediaries, and preparing institutions for the future of money movement,” Sullivan stated.
He added that the integration is poised to offer institutions in the region a pathway to “faster and simpler settlements,” directly addressing critical pain points in global financial transfers.
The utilization of stablecoins like USDC, which are designed to maintain a stable value relative to a fiat currency, provides the benefits of blockchain technology – speed, transparency, and lower costs – while minimizing the volatility risks typically associated with other cryptocurrencies. This makes them an increasingly attractive option for institutional applications requiring predictable value.
Stablecoins: From Crypto Niche to Global Force
Stablecoins initially emerged as a practical tool for cryptocurrency traders to seamlessly move funds between exchanges, serving as a digital proxy for fiat currencies within the nascent crypto economy.
However, their utility has since expanded dramatically, positioning them as a critical component in the broader financial ecosystem. They are increasingly being adopted outside the crypto-native world, particularly for institutional settlement and large-scale payments, effectively serving as an on-chain representation of traditional currencies.
Broader Institutional Embrace of Digital Assets
Visa‘s move is not an isolated incident but rather indicative of a broader industry shift among traditional financial giants embracing digital assets.
Earlier this week, market infrastructure provider Deutsche Börse announced its intentions to integrate the EURAU stablecoin, pegged to the euro and issued by AllUnity. This strategic integration is set to expand the exchange group’s burgeoning digital-asset strategy, building upon its previous engagements with Circle’s Euro Coin and Societe Generale-Forge’s EUR CoinVertible (EURCV).
Deutsche Börse has articulated plans to initially integrate EURAU into its institutional custody service, with a clear roadmap for future integration across its entire service portfolio. This signals a deep commitment to leveraging stablecoins for a wide array of financial services, from trading and clearing to settlement and custody, further blurring the lines between traditional finance and the digital asset space.
Navigating the Regulatory Landscape
As stablecoins become more embedded in global payment and settlement systems, regulators worldwide are grappling with the complex task of classifying and supervising their exposure within the banking system. The rapid evolution of this technology necessitates a re-evaluation of existing regulatory frameworks.
Erik Thedéen, the governor of the Swedish central bank and the influential chair of the Basel Committee on Banking Supervision, recently acknowledged the need for a “different approach” to the current 1,250% risk weighting applied to crypto exposures for banks. This statement from a key global financial policymaker indicates a growing recognition that current regulatory measures, designed for traditional assets, may not be adequately suited for the unique characteristics of stablecoins and other digital assets.
A revised approach could pave the way for broader institutional adoption by providing clearer, more proportionate risk frameworks.
Concurrently, Sarah Breeden, Deputy Governor of the Bank of England, has signaled that the United Kingdom intends to maintain pace with the United States regarding stablecoin regulation. This suggests a potential for major jurisdictions to align their regulatory strategies, fostering a more harmonized global environment for stablecoin operations.
Such international coordination would be crucial for establishing trust, ensuring market integrity, and facilitating the responsible growth of stablecoins as they continue to integrate into the foundational layers of the financial system.
