Panel: Visa and Fireblocks Make Business Case for Blockchain-Based Payments | PYMNTS.com

In today’s business landscape, every advantage counts.

And while using cryptocurrency at the point of sale is getting a lot of attention lately, and is an interesting use case, experts are coming to see that the real product market fit and value to both payments companies and merchants is in stablecoins as a means of more efficient settlement and new product growth.

After all, in the first half of 2024 alone, stablecoins settled over $2.6 trillion worth of value.

That’s why, for the Outlook 2030 B2B event, PYMNTS sat down with Ran Goldi, SVP, payments and network at Fireblocks, and Nikola Plecas, head of commercialization, Visa Crypto, to dissect the benefits and myths surrounding blockchain-based payments, how to think about real-world applications and how to unlock new revenue streams using blockchain.

“Blockchain isn’t going to solve world hunger. It’s not a magical fix for every problem,” Goldi said. However, blockchain offers an upgrade to financial systems, he said, stressing that the real power of blockchain lies in faster, more transparent value transfers, an area where stablecoins are already gaining traction.

While traditional payment systems like Swift can take days to process transactions, Goldi said, stablecoins enable near-instant cross-border payments in “under 10 minutes.”

And stablecoins, the panelists said, offer significant advantages over existing payment systems, including native programmability, strong auditability, fast settlement, self-custody options and seamless interoperability.

Still, the financial world is at a pivotal moment, balancing excitement and skepticism around blockchain technology.

The Blockchain Promise: Moving Beyond the Hype With Stablecoins

Unlike volatile cryptocurrencies, stablecoins are pegged to fiat currencies, ensuring stability while offering the programmability and transparency that businesses seek.

Against this backdrop, Plecas said Visa’s role is to bridge the gap between traditional financial systems and the blockchain ecosystem.

“Our strategy is to create more utility for crypto holdings, enabling users to connect their balances to Visa credentials and spend in fiat at millions of merchant locations,” he said, noting that with over 60 crypto platforms now working with Visa, the company is helping unlock new use cases beyond speculative trading, including remittances, cross-border payments and payroll for the gig economy.

For payment providers like Visa, blockchain-based payments represent a lucrative revenue expansion opportunity. Plecas pointed out that many regions lack access to traditional banking infrastructure, but blockchain bridges these gaps. Visa has enabled crypto wallets to issue payment cards that function without being tied to a traditional bank account, providing financial services to previously underserved markets.

Expanding on this theme, Goldi used the example of Stripe’s recent adoption of crypto-based payouts. Gig workers and small vendors in remote locations can now receive payments instantly, even when the payout amounts are small. Blockchain doesn’t aim to eliminate intermediaries like Visa, Goldi said, but rather to enhance the speed, transparency and efficiency of the payments ecosystem.

The ‘Stablecoin Sandwich’ and Real-World Applications

Stablecoins represent a payment innovation with the potential to expand access to secure, reliable, and convenient payments to more people in more places. It could even help unlock the holy grail of payments: seamless, secure and accurate cross-border transactions.

The concept of the “stablecoin sandwich,” a method of using stablecoins to transfer value between currencies, serves as a practical illustration of blockchain’s efficiency in cross-border payments.

As Goldi explained, the process involves converting a currency, such as Mexican pesos, into a dollar-pegged stablecoin (e.g., USDC). This digital currency is then transferred instantly to the receiving country, where it is converted back to local fiat currency, such as British pounds.

He shared a real-world example: In Latin America, importers use stablecoins to pay Asian suppliers. Payments that used to take days now settle in minutes, reducing storage costs and customs delays. This speed gives payment providers a significant edge in markets where efficiency is critical. “Payment companies that don’t embrace these solutions risk falling behind,” Goldi said.

Still, while blockchain-based payments offer promise, both Goldi and Plecas stressed that regulatory frameworks are essential for safeguarding transactions and enabling growth. They expressed hope that the United States, currently lagging in blockchain regulation, will soon catch up with the European Union’s progress. “The biggest payments companies in the world are in the U.S.,” Goldi said. “If they embrace stablecoins under a robust regulatory framework, it could catalyze the largest financial system upgrade of our generation.”

Plecas noted that regions with clearer regulations, such as Europe under the Markets in Crypto Assets (MiCA) framework, have seen faster adoption of stablecoins. “The largest financial institutions are eager to explore tokenized assets,” he said, but they require regulatory certainty to do so at scale.

Looking Ahead: Embracing Transformative Change

A recurring theme throughout the discussion was the importance of abstracting the technical complexity of blockchain. “We want payment companies to stop worrying about blockchain’s intricacies and start using these new rails,” Goldi said. His advice to payment companies: Experiment with blockchain, even on a small scale, and gauge how customers respond. “Today, the demand for blockchain solutions is driven by end-users — merchants who want faster settlements and gig workers who need instant payouts.”

Asked what they envision for the next year, both Goldi and Plecas predicted continued momentum in blockchain adoption, driven by improved regulation and technological advances. Plecas also emphasized the importance of usability: “In a year, I hope we’ll see even more consumer-facing applications that abstract the blockchain complexity, focusing on solving real problems like fast, low-cost fund transfers.”

Goldi echoed this optimism, saying market demand for faster, more transparent payments will only grow. His message to payment companies was clear: “Don’t wait. Start experimenting with blockchain-based payments now, or risk losing out to more agile competitors.”

Register now to access all streaming and on-demand videos from the B2B Payments 2024 event series.