GAMECHANGER as Visa adopts stablecoin settlement capabilities – blockchain has gone mainstems

Visa has officially expanded its stablecoin settlement capabilities to include PayPal USD (PYUSD), Global Dollar (USDG), and Euro Coin (EURC), marking a significant step in integrating blockchain technology into mainstream financial infrastructure.

Key Highlights:

• New Stablecoins Supported:
• PYUSD: Issued by Paxos and backed by PayPal, now integrated into Visa’s treasury network.
• USDG: Also issued by Paxos, offering another USD-backed option for settlement.
• EURC: Euro-backed stablecoin issued by Circle, enabling euro-denominated blockchain settlements.
• PAXOS:
• Paxos is a U.S.-based regulated blockchain infrastructure and tokenisation platform that enables enterprises to digitise and move assets securely and efficiently.  
• Expanded Blockchain Support:
• Visa now supports Ethereum, Solana, Stellar, and Avalanche for settlement transactions.
• Strategic Goals:
• Visa is building a multi-coin, multi-chain infrastructure to support global settlement needs.
• The initiative aims to reduce friction in cross-border and on-chain transactions, improve speed, and offer more flexibility to partners like banks, fintechs, and merchants.
• Real-World Impact:
• These integrations allow Visa to settle transactions in real-time using blockchain rails, bridging traditional finance with digital assets.
• It enhances operational agility for clients managing multi-currency flows and supports the growing demand for blockchain-native payment experiences.

Regulatory Status

• Regulated Trust Company: Paxos Trust Company LLC is regulated by the New York Department of Financial Services (NYDFS).
• First Limited Purpose Trust Charter: Granted in 2015 for digital assets.
• Licensed in Singapore: Recognised as a Major Payments Institution by the Monetary Authority of Singapore (MAS) since 2022.

Core Services

• Stablecoin Issuance:
• PYUSD (PayPal USD).
• USDG (Global Dollar).
• Tokenisation: Infrastructure to tokenise real-world assets (RWAs).
• Custody & Settlement: Blockchain-based settlement for financial institutions.
• Compliance & Transparency: Monthly reserve attestations and strict risk management protocols.

Here’s a breakdown of how Visa’s blockchain settlement expansion—supporting PYUSD, USDG, and EURC—could impact compliance, treasury operations, and cross-border payments for financial institutions and fintechs:

Compliance Implications

1. Real-Time Transparency:
• Blockchain-based settlements offer immutable, auditable records, enhancing AML and KYC monitoring.
• Regulators may increasingly expect institutions to leverage this transparency for real-time reporting.
2. Stablecoin Risk Management:
• Institutions must assess the issuer's credibility (e.g., Paxos for PYUSD/USDG, Circle for EURC) and reserve backing.
• Compliance teams will need to monitor on-chain activity for sanctioned addresses or suspicious flows.
3. Jurisdictional Complexity:
• Different stablecoins may fall under different regulatory regimes (e.g., MiCA in the EU for EURC).
• Cross-border use of stablecoins may trigger licensing or registration requirements.

Treasury Operations

1. 24/7 Liquidity & Settlement:
• Blockchain rails enable instant settlement, reducing counterparty and FX risk.
• Treasurers can optimise working capital by minimising idle funds in transit.
2. Multi-Currency Management:
• With USDG, PYUSD, and EURC, treasurers can natively hold and settle in multiple fiat-backed tokens.
• This supports automated hedging and real-time rebalancing across currencies.
3. Smart Contract Automation:
• Treasury functions like sweeps, disbursements, and reconciliations can be automated via smart contracts.
• This reduces operational overhead and human error.

Cross-Border Payments

1. Faster, Cheaper Remittances:
• Stablecoins on public blockchains bypass traditional correspondent banking, reducing fees and delays.
• Especially impactful for emerging markets and B2B cross-border flows.
2. Interoperability Challenges:
• Institutions must manage multi-chain infrastructure (Ethereum, Solana, Stellar, Avalanche).
• Middleware or custodial partners may be needed to abstract complexity.
3. FX and On/Off-Ramps:
• While stablecoins reduce FX friction, conversion to local fiat still requires robust on/off-ramp partners.
• This is a key area for fintech innovation and partnership.

Here’s a compliance-focused breakdown of Visa’s move to settle transactions using stablecoins like PYUSD, USDG, and EURC on blockchain rails:

Compliance Team Impact: Visa’s Blockchain Settlement Expansion

1. Regulatory Oversight & Licensing

• Stablecoin Classification: Each stablecoin may be treated differently under local laws (e.g., MiCA in the EU for EURC, NYDFS oversight for PYUSD).
• Licensing Requirements: Using or facilitating stablecoin transactions may require money transmitter licenses, e-money licenses, or crypto asset service provider (CASP) registration, depending on jurisdiction.

2. AML/CFT Monitoring

• On-Chain Forensics: Compliance teams must integrate tools like Chainalysis, Elliptic, or TRM Labs to monitor wallet activity, detect suspicious patterns, and trace funds.
• Sanctions Screening: Real-time screening of wallet addresses and counterparties is essential to avoid exposure to OFAC-sanctioned entities or blacklisted addresses.

3. KYC & Counterparty Risk

• Wallet Ownership Verification: Institutions must verify the identity of wallet holders, especially for non-custodial wallets.
• Issuer Due Diligence: Ongoing assessment of stablecoin issuers (e.g., Paxos, Circle) for reserve transparency, audit frequency, and regulatory compliance.

4. Transaction Monitoring & Reporting

• Real-Time Settlement: Blockchain-based transactions settle instantly, requiring automated monitoring systems to flag anomalies in real time.
• Regulatory Reporting: Enhanced reporting obligations may arise, including Suspicious Activity Reports (SARs) and cross-border transaction disclosures.

5. Data Privacy & Jurisdictional Risks

• Public Ledger Exposure: Transactions are visible on-chain, raising GDPR and data localisation concerns.
• Cross-Border Data Flows: Compliance must ensure that data shared across jurisdictions complies with local privacy laws.

References

Visa - Visa Expands Stablecoin Settlement Support https://investor.visa.com/news/news-details/2025/Visa-Expands-Stablecoin-Settlement-Support/default.aspx

Visa Supercharges Stablecoins with PYUSD, EURC, USDG Across Ethereum ... https://coincentral.com/visa-supercharges-stablecoin-network-with-pyusd-eurc-usdg-across-ethereum-solana-avalanche-stellar/

Paxos 2025 Company Profile: Valuation, Funding & Investors | PitchBook https://pitchbook.com/profiles/company/167135-32