Visa, Circle and Ripple invest millions in stablecoin startup

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Visa, Circle and Ripple invest millions

A bet on stablecoins

Velocity is building infrastructure that allows banks and payment companies to use stablecoins for settlement, liquidity management and corporate treasury operations. At the same time, clients do not need to fully replace their existing payment systems.

Interest from major financial companies in the startup is growing alongside the stablecoin market itself. Total stablecoin supply has already exceeded $300 billion. While these tokens were once used mainly by crypto traders to move dollars between exchanges, they are now being used more and more in international payments, money transfers and corporate treasury management.

Visa’s participation is especially notable. Velocity does not believe stablecoins will replace bank cards. Instead, digital dollars could gradually move into the background infrastructure that handles the flow of money between banks, payment networks and businesses.

Stablecoins instead of old payments infrastructure

Before founding Velocity, Queathem worked at Worldpay, which processes more than $2 trillion in payments annually. According to him, over the past 15 years most investment in the payments industry has gone toward improving the user experience, while the underlying infrastructure has changed very little.

“All this capital has flowed into payments over the last 15 years, and nearly 100% of it has been focused on improving the consumer experience. But no one has fixed the back-end layer,” Queathem said.

Visa’s global head of growth products and strategic partnerships, Rubail Birwadker, said stablecoins are playing an increasingly important role in reshaping how money moves across the Visa ecosystem. According to him, Velocity is building infrastructure that will allow businesses to use stablecoin-powered payments.

Users may not even notice the change

Velocity expects much of the shift to the new infrastructure to remain invisible to ordinary users. Chief Growth Officer Matt Larson said people will not necessarily need to switch en masse to their own stablecoin wallets.

Instead, stablecoins could be used for funding and settlement within existing card networks. For the customer, the payment would still look like a normal card transaction, while the movement of funds between financial companies would happen through blockchain rails.

Queathem predicts that within five years, almost every global company will hold at least part of its capital onchain. Even a small shift of corporate money onchain would require new systems for reconciliation, treasury management and connecting digital assets with traditional financial infrastructure.

Two players dominate the market

The stablecoin market is currently dominated by Tether and Circle. According to DefiLlama, the sector’s total market capitalization stands at about $305 billion, of which roughly $183 billion comes from USDT. That gives Tether around 60% of the market. Second place belongs to Circle’s USDC, with a market capitalization of about $74 billion. Together, the two largest stablecoins control more than 80% of the entire market.

The gap with other projects remains huge. The next-largest stablecoin, USDS, has a market capitalization of about $10 billion, while USDe is worth less than $5 billion. At the same time, USDT and USDC are already deeply embedded in payments, crypto trading and cross-border transfers, which makes Circle’s participation in Velocity especially revealing: one of the largest stablecoin issuers is directly investing in infrastructure for their further use in traditional payments.

Earlier, it was reported that by 2027, investment in stablecoin infrastructure could reach $8 billion.

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