The Interchange: Visa wants to be a network of networks. It's winning the connection to public digital asset networks

Visa often notes a core strategic priority of the company is to be a network of networks. 

News this week that Visa will be powering BlockFi's long-awaited bitcoin rewards credit card and integrating Circle APIs to support USDC for B2B (business-to-business) transactions only further accentuates the desire the company has placed this year on making blockchain-based stablecoin payment systems a part of its broader Visa network. 

Looking back over the past 12 months, the company has arguably secured center-stage in positioning as the core bridge between legacy payment infrastructure and the digital asset ecosystem. A key part of this initial success has come from the willingness to work with digital asset companies to provide card-based network access.

Taking a look at all the crypto cards currently in the market, or announced for 2021, Visa has become the clear winner in terms of market share in standing up crypto cards worldwide. The payment network supports over 32 different card programs by our last estimate, which is more than 4 times over as many crypto card programs than its direct competitor Mastercard.

Starting in February, Coinbase UK became the first crypto company to become a Visa principal member for its original debit card product. Principal members enjoy the benefits of being allowed to control broader aspects of a member's own card program without having to rely on a sponsored issuer (another bank).

Through direct access to Visa's network by way of a principal membership, Coinbase UK has the ability to reduce transaction fees, offer p2p payments over Visa direct (ability to offer the option to receive payments instantly for a fee, a feature used in Venmo and Cash App), among other things. 

Beyond providing Coinbase with principal membership, Visa this year has continued to expand its Fast Track program, a strategic initiative of the firm to allow the "next generation of fintechs" to launch Visa cards. Falling under the company's desire to make advancements to its approach to digital currencies — as detailed in Visa's first public communications of its digital currency outlook this summer — several companies that are building within the digital asset ecosystem (BlockFi, Crypto.com, eToro Money, Fold, Ternio.io, Zap and ZenGo), have joined the Fast Track program this year. According to Forbes, Visa now has onboarded 25 cryptocurrency wallet providers to its Fast Track program.

While many of those digital card offerings to date have been directed towards retail payment users, what stuck out from yesterday's news that Visa is partnering with Circle to let card issuers integrate USDC payment capability is the intention to focus on B2B use-cases. According to Forbes:

The partnership is an attempt to not only make stablecoins easier for businesses to use but also provide an environment to test applications of USDC for B2B use-cases and see if any can facilitate a payment flow that is hard to do with legacy solutions today. An example could be cross-border real-time payment of digital bearer assets or access to a dollar-based borderless small business account.

As stablecoins are on pace to clear more than $1 trillion in total transaction volume on public blockchain infrastructure in 2020, what's remarkable to consider is the incremental growth potential in capturing even a few basis points of traditional B2B payment flow share. While Visa may not be able to own public blockchain rails themselves, the company is positioning itself to own the endpoints of the infrastructure in order to participate in the digital asset ecosystem and ultimately advance the adoption of digital currencies.

With Visa as the credentialed on and off-ramp, and with Circle providing enterprise-grade payment gateway APIs that can access whitelisted wallet addresses, we may finally get evidence of material adoption of USDC for B2B transactions in 2021.