The stablecoin market is facing a formidable new entrant. A dollar-backed stablecoin project jointly supported by global payment giants Visa and Mastercard, along with several cryptocurrency firms, has been publicly disclosed. The project aims to launch a fully USD-reserve-backed stablecoin, deeply integrating traditional financial governance structures, in an effort to carve out market share from Tether (USDT) and Circle (USDC).
Capital Giants Join Forces, Targeting the Stablecoin Gap
Visa and Mastercard's involvement is no coincidence. Stablecoin usage in cross-border payments, on-chain settlements, and DeFi ecosystems continues to rise, but existing top stablecoins (like USDT and USDC) are issued by crypto-native companies that lack the compliance experience and merchant reach of traditional payment networks. The new project capitalizes on this gap: Visa and Mastercard provide payment infrastructure and compliance frameworks, while multiple crypto firms contribute technical development and liquidity support to build a "bank-grade" stablecoin. Although official details on the token symbol and initial blockchain have not been released, industry sources expect deployment on high-throughput networks like Ethereum and Solana.
The Business Logic Behind 'Keeping Reserve Earnings'
The project's key differentiator lies in "keeping reserve earnings" — meaning all interest income generated from the USD reserves backing the stablecoin accrues to the project issuer, unlike some competitors that allocate a portion to users or public funds. This approach aligns with traditional bank deposit models: banks accept deposits, earn spreads through lending or investments, and depositors receive minimal interest. By retaining reserve earnings, the stablecoin issuer secures a stable revenue stream to cover operational costs, compliance audits, and future marketing. Of course, users do not receive savings yields like those offered by UST (which collapsed) or certain decentralized stablecoins. The trade-off reflects the project's focus on attracting institutional and payment-use-case users rather than yield-seeking retail investors.
Market Competition Landscape and Potential Impact
Currently, USDT has a market cap of approximately $110 billion and USDC around $35 billion, together controlling over 80% of the stablecoin market. To challenge this dominance, the new project must overcome two major constraints: user migration costs — exchanges and OTC desks worldwide deeply rely on USDT/USDC liquidity; and regulatory uncertainty — the U.S. stablecoin bill is still progressing, but Visa and Mastercard's involvement could accelerate compliance. If this project gains widespread acceptance from major exchanges and merchants, leveraging traditional payment network advantages to offer lower cross-border transfer fees, it could capture share in cross-border B2B payments and institutional DeFi. In the short term, direct threats to USDT and USDC are limited, but the long-term impact will drive transparency in fee structures and yield models across the industry.