With a deep understanding of the intricate dance between financial regulation and technological innovation, Kofi Ndaikate has become a leading voice on the integration of digital currencies into mainstream payments. As giants from Visa to Klarna make significant moves into the stablecoin space, his perspective is crucial for understanding the real-world implications of this digital shift. We explore the driving forces behind this recent surge in adoption, delving into the strategic choices companies are making between building their own digital assets or partnering with established players. The conversation also uncovers the practical mechanics of how these stablecoins are revolutionizing transactions and what it took to change the minds of previously skeptical industry leaders.
The data shows a truly astronomical leap in stablecoin circulation since 2019, and while legislation like the “Genius Act” certainly provides a tailwind, it can’t be the whole story. What underlying market forces and technological advancements are making this the pivotal moment for giants like Visa and Mastercard to finally commit to stablecoins for cross-border payments?
That’s the core of the issue, isn’t it? The legislation provides air cover, but the real driver is a perfect storm of market pull and technological maturity. The numbers are staggering—we’re talking a jump from just 2.6 billion in circulation to 273 billion. That isn’t a niche market anymore; it’s a tidal wave of capital and user adoption that no major player can ignore. For years, the promise of faster, cheaper cross-border payments was theoretical. Now, the infrastructure is robust enough to deliver. More importantly, the market demand is undeniable. Businesses are tired of waiting days for a SWIFT transfer to clear and losing a significant percentage to fees. They see a way to move money almost instantly, 24/7, even outside of banking hours, and they are demanding that capability from their payment providers. It’s no longer a question of if but when, and for Visa and Mastercard, the answer had to be now to stay competitive.
We’re seeing two very different playbooks emerge. Fiserv is developing its FIUSD stablecoin for a very specific, internal use case—settling domestic payments between banks. In contrast, Stripe is targeting customer-facing subscription payments, which are ultimately converted to fiat. Could you walk us through the distinct technical and operational hurdles each of these models presents?
They are fundamentally different beasts, each with its own set of challenges. Fiserv’s approach is about creating a walled garden, a highly controlled, closed-loop system. The technical challenge there is building a secure, private ledger that their partner banks can trust implicitly, ensuring there’s always liquidity for FIUSD, and integrating this new rail deep into their existing core banking infrastructure. It’s a massive plumbing project, focused entirely on back-end efficiency. Stripe, on the other hand, is building a bridge to the outside world. Their challenge is more about managing the on-ramps and off-ramps. They need to integrate with dozens of different consumer crypto wallets, manage the user experience, and, critically, handle the instantaneous conversion to fiat to shield their merchants from any crypto exposure. Operationally, this means robust customer support for a new class of user and a compliance framework that can navigate the Wild West of unhosted wallets while still satisfying regulators.
This brings up a fascinating strategic fork in the road: the classic “build vs. buy” dilemma. Klarna and Fiserv are investing in building proprietary stablecoins, while a titan like Mastercard is opting to partner with established names like Paxos and Circle. What are the critical financial and operational trade-offs here, and what factors might push a company down one path over the other?
The “build versus buy” decision really comes down to a company’s core strategy, risk appetite, and desired speed to market. When you see Fiserv or Klarna building their own, you’re seeing a long-term play for control and efficiency. By building KlarnaUSD, for example, Klarna can tailor it precisely to their internal needs, like reducing the cost of their own international payment flows, and they won’t have to share a slice of the pie with a third party. The trade-off is a colossal upfront investment in talent, technology, and navigating the regulatory labyrinth. On the flip side, Mastercard’s partnership model is about speed and leveraging existing trust. By integrating with Paxos and Circle, they tap into established, liquid, and regulated stablecoins almost overnight. It allows them to offer crypto services to their 3.5 million eligible cardholders immediately. The trade-off is a reliance on partners and a less customized solution. The ultimate decision hinges on whether the goal is to optimize a specific internal process or to quickly launch a broad, market-facing product.
Visa’s pilot program using Visa Direct for stablecoin settlement sounds transformative. Can you paint a picture of what a transaction looks like in that system, and how it directly stacks up against a conventional international wire transfer that relies on the SWIFT network?
Let’s imagine a U.S.-based company needing to pay a supplier in Latin America. The old way, using SWIFT, is a slow, opaque journey. The payment leaves the U.S. bank, gets routed through one or maybe two intermediary correspondent banks, each taking a fee and adding a day to the process, before finally landing, several days later and a bit lighter, in the supplier’s account. Now, contrast that with the Visa Direct pilot. The U.S. company uses its financial institution to initiate a payment using pre-funded stablecoins. That transaction is sent over the network and settled on the blockchain almost instantly. The supplier in Latin America receives the funds directly in their stablecoin wallet in a matter of minutes, not days. The chain of costly intermediaries is gone. The cost is a fraction of the original, and the settlement is near-real-time, which is an absolute game-changer for cash flow and business operations.
It’s particularly striking to see Klarna enter this space, especially given its CEO’s public concerns about crypto back in 2021. What specific evolutions in stablecoin technology, their practical use, or the regulatory environment have been powerful enough to convert a prominent skeptic into an active developer of a proprietary digital asset?
That shift in perspective is incredibly telling. The key is understanding that the conversation has fundamentally changed. The CEO’s original concern was likely aimed at the speculative frenzy around volatile assets like Bitcoin, where young people were investing money they couldn’t afford to lose. What has emerged since then is the clear distinction of stablecoins not as a speculative investment, but as a utility—a piece of financial infrastructure. The utility is now undeniable; Klarna itself identified a clear use case in reducing its own internal cross-border payment costs. Furthermore, the technology has matured, and critically, the regulatory fog is beginning to lift with frameworks like the one called for by the “Genius Act.” It’s no longer a conversation about risky bets. It’s a pragmatic business decision about using a more efficient, stable, and increasingly regulated technology to solve a real-world financial problem. It’s a tool, not a lottery ticket, and that’s a language any CEO can get behind.
What is your forecast for the role of proprietary, company-issued stablecoins versus universal ones like USDC in the next five years?
I believe we’re heading toward a dual-track ecosystem where both will thrive, but in different domains. Universal, highly regulated stablecoins like USDC will become the dominant force in the open, consumer-facing economy. They’ll function as the internet’s base-layer money—interoperable, liquid, and trusted across countless platforms and wallets. However, the proprietary stablecoins, like Fiserv’s FIUSD or KlarnaUSD, will flourish within specific, large-scale commercial ecosystems. Think of them as the ultimate tool for B2B and internal optimization. A company like Klarna can use its own stablecoin to streamline payments within its vast network of merchants and partners, capturing efficiencies and data in a way that’s impossible with a universal asset. So, we’ll see universal stablecoins for the “public” internet of value and proprietary ones for “private,” high-volume corporate networks.
