Japanese investment bank Mizuho called Visa (V) “the stablecoin of stablecoins,” arguing that the payments giant has become a core part of the global stablecoin infrastructure.
The expansion of Visa’s network of stablecoin-linked card programs, which now numbers more than 130 in more than 40 countries, with spend quadrupling year-over-year, gives it a central role in blockchain-based payments, according to a Wednesday report.
Stablecoins are cryptocurrencies whose value is tied to another asset, such as the US dollar or gold. They play a major role in cryptocurrency markets, provide payment infrastructure, and are also used to transfer money internationally. Tether’s USDT is the largest stablecoin, followed by Circle Internet (CRCL) USDC.
The bank has an Outperform rating on Visa shares with a $425 price target. The stock was down 1%, at about $343.30, at the time of publication.
Analysts Dan Dolev and Alexander Jenkins wrote that Visa could emerge as one of the biggest beneficiaries of stablecoin adoption, helped by the Genius Act and its long-running Visa Direct initiative. He said Visa Direct has grown about 50% annually since 2016 and now accounts for about 15%-20% of global debit volume, or more than $1.1 trillion.
With a growing array of stablecoins ranging from USDT and USDC to PayPal’s PYUSD and various central bank projects, analysts said a centralized hub like Visa offers a powerful competitive advantage.
Analysts also pointed to Visa’s move to allow banks to mint and burn their own stablecoins using its tokenized asset platform, suggesting that individual stablecoins like USDC are becoming interchangeable, and networks like Visa or MasterCard (MA) will ultimately capture the most value.
Visa currently supports four stablecoins on its platform, USDG, PYUSD, EURC, and USDC. Mizuho said this is just the beginning.
As stablecoins become more commoditized, the bank sees Visa’s role as a “network of networks” or “stablecoins of stablecoins” as a key long-term growth driver.
The bank’s analysts reiterated their view that USDC issuer Circle (CRCL) is overvalued, maintaining an Underperform rating and an $84 price target.
Circle shares were down 3.45%, trading around $131.37 at the time of publication.
Read more: Visa Pilots Pre-Funded Stablecoins for Cross-Border Payments