JPMorgan and Visa’s Cuy Sheffield on Stablecoins: The Bridge Between Crypto and Traditional Finance
In the world of crypto, very few individuals manage to gain the respect of both traditional financial circles and the blockchain community. One of those rare figures is Cuy Sheffield, Head of Crypto at Visa.
As one of the earliest advocates for the integration of blockchain and stablecoins within Visa, Sheffield has not only witnessed the industry’s evolution—from hype to cool-down to pragmatism—but has also led efforts to build bridges connecting on-chain assets with the real world. Recently, in the “Money Code” podcast, he had an in-depth discussion with hosts Chuck Okpalugo and Raj Parekh, systematically illustrating how stablecoins have transformed from speculative tools to core components of global financial infrastructure.
This article condenses the two-hour interview into an insightful overview, helping you understand why the true battleground for stablecoins isn’t at merchant POS systems, but in areas like USD accessibility, cross-border settlements, on-chain credit, and even the future of the AI-powered economy.
1.Wallets Don’t Want You to Spend with Stablecoins: The “Negative Incentive” Dilemma
Imagine this: You open your wallet app and use USDC to pay directly at a coffee shop. Sounds great, right? But for wallet providers, this is a “losing deal.”
Sheffield points out that when users spend stablecoins directly, funds flow out of the platform, and wallets lose out on interchange fees—the revenue generated when users swipe their cards. They also bear the costs of risk control, customer service, and compliance. This leads to a decrease in Assets Under Management (AUM), zero revenue, and increased risks—a typical case of “negative incentives.”
In contrast, traditional card networks create a closed-loop of benefits through the interchange mechanism:
- Merchant pays → Issuing bank earns fees → User receives rewards → All parties continuously reinvest in experience optimization.
“Without economic incentives, no technology, however good, can scale,” Sheffield says. This is why Visa chose a more pragmatic approach: stablecoin-linked cards.
2.Stablecoins + Visa Cards: The Fastest Path to the Real World
Rather than convincing 150 million global merchants to overhaul their systems to accept on-chain payments, Visa’s approach is simpler: let users keep swiping their familiar Visa cards, with funds coming from on-chain stablecoin balances.
This “stablecoin card” model creates a win-win for all involved:
- Users: No need to learn new processes, simply tap to pay.
- Merchants: No tech changes needed, they can continue using existing payment systems.
- Wallets: Retain AUM and, for the first time, earn card-issuing revenue.
- Visa: Expands network value while maintaining risk control and dispute resolution capabilities.
Sheffield believes this is not just a transitional solution but the prototype for the next generation of global bank cards—similar to Revolut or Stripe in 2015, except the underlying asset is now an on-chain stablecoin.
3.Payments Aren’t a TPS Race; It’s an Ecosystem War
“We can process 50,000 transactions per second, faster than Visa!” This is a common boast among many crypto projects. However, Sheffield sees this as a fundamental misunderstanding of the essence of payments.
The real barrier isn’t technical performance; it’s the decades of ecosystem development:
- How do you get every country’s acquiring banks, payment gateways, and tax systems to support you?
- How do you handle chargebacks, fraud disputes, and reconciliation?
- How do you meet KYC/AML, data privacy, and local regulations?
“The essence of a payment network is coordination, not computation,” he says. “It’s easy to write an EVM-compatible chain, but getting a small merchant in the Philippines to accept your payment is hard.”
4.The Greatest Use Case Isn’t Payments, But “USD Accessibility”
In the U.S., it’s hard to understand why people would rather hold USDT than their national currency. However, in countries like Argentina, Nigeria, and Turkey, the ability to hold dollars safely and at low cost is a rare privilege. Stablecoins solve this pain point by offering regular people a “digital dollar account” without the need for bank permission.
Sheffield reveals that USDT already has around 500 million users, many of whom view it as a savings tool rather than a speculative asset. He predicts that in the next 2–3 years, global stablecoin users will exceed 1 billion.
This, according to Sheffield, is where stablecoins find their most solid and inclusive value.
5.Cross-Border Payments: Hybrid Models Lead the Way, Full On-Chain Settlements Are Gaining Momentum
Currently, cross-border payments primarily use a “fiat → stablecoin → fiat” three-step model: the payer converts local currency into stablecoins, transfers them on-chain, and the recipient exchanges them back into their local currency. This model has been implemented in several countries, significantly improving efficiency.
But Sheffield believes the real tipping point will come with wallet-to-wallet pure on-chain settlements. When global users widely hold interoperable wallets and are willing to keep their balances in stablecoins, cross-border payments will become as simple as sending a message.
6.Banks Are Waking Up: From Defense to Offensive
Banks around the world have different attitudes toward stablecoins:
- U.S. Banks: Often impacted by regulatory uncertainty, these banks are in a “catching up” phase, with limited demand from domestic clients for dollar-pegged stablecoins.
- Emerging Market Banks: Facing direct competition from local FinTechs and crypto wallets, especially as young people increasingly turn to platforms like OKX and Binance to hold stablecoins.
Sheffield warns, “If regulation continues to block this, local banks will lose financial sovereignty.” He calls for banks to proactively push for policy reform, seeking the right to issue local currency stablecoins (like BRL, SGD) to counter the impact of “dollarization.”
In the future, the global market may see two types of stablecoins coexisting:
- Global USD Stablecoins (provided by FinTech)
- Local Currency Stablecoins (issued by national banks)
7.On-Chain Credit is No Longer an Experiment: $670 Billion in Loans Prove Its Feasibility
Many still view DeFi lending as “casino-like,” but Visa’s research shows that $670 billion worth of loans have been issued globally through smart contracts in the form of stablecoins. Though much of this is collateralized by crypto assets, the automated settlement, interest rate models, and risk management systems are already highly sophisticated.
Sheffield believes, “The impact of stablecoins on the credit system will be much greater than their impact on the payments system.” After all, credit is the core source of profit for banks.
In the future, we will see the rise of “permissioned on-chain credit”:
- KYC users + whitelisted pools + frozen assets + compliant arbitration. In emerging markets with no credit scoring systems, the combination of on-chain collateralized loans, stablecoin balances, and Visa card consumption could spawn a new generation of inclusive financial products.
8.AI Agent Economy: Stablecoins Will Become the Language of Machines
Finally, Sheffield discusses a more futuristic direction: Agentic Commerce (Agent-Based Commerce).
Imagine two scenarios:
- Human → AI agent → Merchant: You ask AI to book a flight or buy a gift, and it makes the payment automatically using a tokenized Visa card.
- AI agent ↔ AI agent: One AI calls another AI for weather services, paying a small micro-fee (e.g., 0.0001 USD).
Such scenarios require small, instant, programmable, and 24/7 operational currency—something stablecoins are naturally suited for. While platforms like X42 are currently focused on meme trading, just as early Solana attracted developers through speculation, real-world use cases will emerge.
“Stablecoins will be the preferred payment tool for AI agents,” Sheffield asserts.
9.Visa’s Four Strategic Pillars: From Payment Network to Digital Currency Network
Looking ahead to the next five years, Visa plans to build its stablecoin ecosystem around the following pillars:
- Stablecoin Card Products: Becoming mainstream consumer gateways.
- On-Chain Settlement Networks: Currently settling $2.5 billion annually, targeting billions in volume.
- Cross-Border B2B Integration: Enhancing remittances, revenue splits, and marketplace payouts.
- Banking Infrastructure: Providing blockchain integration, custody, and compliance services for financial institutions.
Visa is no longer just a “card network”; it is evolving into the infrastructure layer connecting traditional finance with the on-chain world.
In this intersection of payments and crypto, true transformation is just beginning. Stablecoins are no longer a fringe experiment; they are the foundational protocol reshaping global finance.
Author Bio: The author, Lao Sun, is a multilingual cryptocurrency and Web3 observer, content creator, and industry evangelist based in Hong Kong. Fluent in Chinese, English, and French, he is dedicated to interpreting the development trends of the global blockchain ecosystem from a cross-cultural perspective, with a particular focus on Hong Kong’s unique positioning and potential as an international financial hub in the Web3 wave.
Article Link: https://mp.weixin.qq.com/s/zfO6ysSCrAD4fL_ioCqwJA
Disclaimer:This article is reposted content and reflects the opinions of the original author. This content is for educational and reference purposes only and does not constitute any investment advice. Digital asset investments carry high risk. Please evaluate carefully and assume full responsibility for your own decisions.
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