Visa is testing whether privacy-enabled blockchain networks can support institutional stablecoin settlement without exposing sensitive transaction data, in a proof of concept with stablecoin infrastructure company Brale and the Canton Network, a permissioned ledger backed by major Wall Street firms.
The project, announced Thursday, uses SBC, a US dollar-backed stablecoin issued by Brale, to simulate institutional payment flows on Canton as Visa evaluates whether SBC could become another stablecoin option in its settlement program.
The initiative extends Visa’s earlier experiments using stablecoins for settlement on public blockchains, which began in 2021 with USDC settlement on Ethereum but now target banks and market infrastructure providers that want onchain efficiency without broadcasting counterparties, positions or flows on a public ledger.
The push comes as policymakers and analysts anticipate a broader shift in how payment stablecoins are used.
S&P Global Ratings said in a Thursday report that global stablecoin issuance has already surpassed $300 billion across currencies, with most demand still tied to crypto trading.
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US payment stablecoins that comply with the Guiding and Establishing National Innovation in US Stablecoins (GENIUS) Act are poised to expand into merchant remittances and certain types of commercial payments once rules are finalized, the report said, with one of the most promising near-term use cases being cross-border payments. However, such flows currently represent only a minimal, if growing, share of global international payment volumes.
Canton network at center of institutional privacy push
Canton, developed by Digital Asset, connects permissioned blockchain applications operated by institutions including JPMorgan, Goldman Sachs, BNP Paribas and the Depository Trust & Clearing Corporation.
Visa and Brale explore private stablecoin settlement. Source: Businesswire
Unlike public chains, Canton is designed so that only transaction participants and authorized regulators can see specific deal data, while still allowing atomic settlement across tokenized assets, cash-like instruments and other financial contracts.
The proof of concept will assess how Canton’s privacy architecture can support faster, more programmable settlement while allowing financial institutions and payment companies to retain strict control over the visibility of sensitive transaction and settlement data, Visa and Brale said in the release.
For banks, the stakes go beyond technology experimentation. Over time, S&P Global said stablecoins could threaten a portion of banks’ payments income and shift funding from insured retail deposits toward more concentrated wholesale balances.
Banks that issue stablecoins or tokenized deposits themselves may also capture new fee and funding opportunities, driving large financial institutions to test privacy-preserving settlement networks that can support GENIUS-style payment stablecoins and tokenized deposits, according to the report.
Cointelegraph reached out to Visa, Brale and Digital Asset, but had not received a response by publication.
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