Financial encyclopedia

Recently, a notable change has emerged in the market. Visa has started to use stablecoins for settlement. This is not an encrypted company but one of the most mature payment systems in the world. 

Since the current system is already functioning well,
why do we still need stablecoins? 

1. Card swiping is immediate, but settlement may not be. 

When we make a payment with a credit card, the transaction seems to be completed instantly. But in reality, it is divided into two parts:
• Transaction confirmation (immediate)
• Fund settlement (delayed) 

It usually takes 1 to 3 days for merchants to actually receive the funds. This process involves multiple intermediary systems, which makes it time-consuming and costly. 

Second, the role of stablecoins is to enhance efficiency. 

A stablecoin is a digital asset pegged to a fiat currency, for example: 1 stablecoin ≈ 1 US dollar. 

Traditional settlement:
Bank system → Multiple intermediaries → Takes several days to complete 

Stablecoin settlement:
Blockchain → Direct transfer → Completed in a short time 

In simple terms: funds can flow more quickly and reduce intermediate costs. 

Why even Visa is needed? 

The key lies in efficiency. If there is a technology that can achieve:
• Faster
• Lower cost
• Simpler process 

Even market leaders need to keep up.
Otherwise, they may be replaced by more efficient systems. 

Therefore, Visa is not changing its business,
but enhancing its existing system. 

Four. When we use a card for payment now, are we actually using stablecoins? 

No. When we make daily card transactions, we still use Hong Kong dollars or the credit card limit. 

Stablecoins do not appear on the front end but are used in the settlement processes between banks. 

What you use remains the same,
but what has changed is the way funds flow behind the scenes. 

V. What Does This Represent in Terms of Transformation? 

In the past, the crypto world and traditional finance were two separate systems. But now, a convergence is beginning to take place: traditional financial institutions are starting to adopt blockchain technology. And stablecoins are precisely the tool that connects the two. 

When large financial institutions start to adopt new technologies, it indicates that these technologies have gradually matured. Future technologies may not necessarily replace old systems, but they will drive the entire system forward.