Japanese Investment Bank Mizuho called Visa (v) the “StableCoin of StableCoins,” noting that the payments giant has become a key part of the global StableCoin infrastructure.
The expansion of Visa’s network of card programs associated with StableCoin, which is now more than 130 in more than 40 countries, with spending quadrupling year-on-year, gives it a major role in blockchain-based payments, according to Wednesday’s report.
StableCoins are cryptocurrencies whose value is tied to another asset, such as the US dollar or gold. They play a major role in the cryptocurrency markets, providing the payment infrastructure, and are also used to transfer money around the world. Tether’s USDT is the largest stablecoin, followed by Circle Internet’s (CRCL) USDC.
The bank has an outperform rating on visa shares with a price target of $425. The stock was 1% lower, around $343.30, at press time.
Visa may emerge as one of the biggest beneficiaries of stablecoin adoption, helped by momentum from Genius Act And Visa Direct’s long-running initiative, analysts Dan Dolev and Alexander Jenkins write. Visa Direct has grown nearly 50% annually since 2016 and now accounts for approximately 15%-20% of global debit volume, or more than $1.1 trillion, they said.
With a growing range of StableCoins, from USDT and USDC to PayPal’s Pyusd and various central bank projects, analysts say a centralized hub like VISA offers a strong advantage.
Analysts also pointed to Visa’s move to let banks mint and burn their own stablecoins using its tokenized asset platform, suggesting that individual stablecoins like USDC become interchangeable, and that networks like Visa or MasterCard (MA) will ultimately gain the most value.
VISA currently supports four StableCoins on its platform, USDG, PYUSD, EURC and USDC. Mizuho says this is just the beginning.
As StableCoins become more commoditized, the bank sees Visa’s role as “network of networks” or “stablecoin of stablecoins” as a key long-term growth driver.
The bank’s analysts reiterated that Circle (CRCL), the USDC issuer, is overrated, maintaining an underperform rating and a price target of $84.
Shares of Circle fell 3.45%, trading around $131.37 at press time.
Read more: Visa pilots are pre-funded stablecoins for cross-border payments
