Stripe and Visa among firms joining forces on new mainstream stablecoin

More than 100 fintechs, payment networks, cryptocurrency firms, and banks will integrate the stablecoin into their systems in some manner

Stripe co-founder Patrick Collison. Stripe, Visa, and Bank of New York Mellon are among dozens of financial firms linking up to introduce a stablecoin. Picture: Chris Bellew/Fennell Photography

Stripe, Visa, and Bank of New York Mellon are among dozens of financial firms linking up to introduce a stablecoin, part of a strategy to broaden the appeal of the digital money-movement technology.

More than 100 financial-technology companies, payment networks, cryptocurrency firms, and banks are supporters of the new venture, which will be known as Open Standard, according to a blog post shared with Bloomberg News. Other members include BlackRock, Klarna, Chime Financial, Alphabet,  and Coinbase Global.

Open Standard will issue its own US dollar-backed stablecoin, which will be known as Open USD, according to the post. All of the partners plan on integrating the stablecoin into their systems in some manner, once it goes live later this year.

“Existing stablecoins have great strengths, but to use them at scale, businesses need something that’s open, low-cost, high-throughput, broadly accessible, and aligned to their interests,” Zach Abrams, the co-founder and chief executive officer of the Stripe-owned stablecoin infrastructure company Bridge, said in the post. Abrams will serve as Open Standard’s CEO an interim basis.

Stablecoins have been growing in popularity, especially in the US, after US president Donald Trump backed new regulations that govern the relatively nascent payment technology. The value of stablecoins is pegged to another asset, often tracking the US dollar, and backed by reserves of short-term treasuries and cash. They’re useful for cross-border transactions, transitioning between fiat and digital currencies, and minimising exposure to volatility in less stable currencies.

Many of the partners supporting Open Standard already use or have issued their own stablecoins in some capacity. Klarna, for example, introduced its own stablecoin in November, Mastercard acquired the stablecoin infrastructure startup BVNK earlier this year, and Stripe, recently valued at $159bn (€139bn), has long embraced the technology.

For all the activity from banks and payments firms, a handful of issuers still dominate the stablecoin market, with Tether and Circle accounting for the vast majority of volume. PayPal's PYUSD, which was launched in 2023, remains a distant contender. None of those three firms are part of the new venture.

“A stablecoin with neutral governance and shared economics is a unique combination that has potential to unlock the next phase of digital assets growth,” Carolyn Weinberg, BNY’s chief product and innovation officer, said in the post.

Most stablecoin issuers make money from the yield from the reserves backing the stablecoins. Earnings from the reserves backing Open Standard’s token will be shared among the venture’s partners, minus a “small management fee” to cover Open USD’s operational costs.

“The technologies that changed the world, from the internet to mobile networks, succeeded because they became shared infrastructure that anyone could build on,” said Mastercard’s chief product officer, Jorn Lambert. “As stablecoins become a new way to move value globally, we believe the infrastructure behind them should follow the same path: open, interoperable, and broadly accessible.”

Bloomberg