Visa will join (USDG): Background, significance and industry impact discussion

On April 14, 2025, global payment giant Visa announced that it would join the Global Dollar Network (USDG Stablecoin Alliance) led by Paxos and become the first traditional financial institution member of the alliance. This news not only marks another milestone in the integration of traditional finance and blockchain technology, but also injects new variables into the competitive landscape of the stablecoin market. In this article, Aiying Payment will deeply analyze the background, significance, potential impact of Visa joining the USDG Alliance, and how this cooperation will bring changes to the global financial ecology.

1. The rise of the USDG Alliance: a new model of open and incentivized stablecoins

The Global Dollar Network (USDG Alliance) was launched by Paxos in November 2024. It is an open network with the US dollar-pegged stablecoin USDG as its core. Alliance members include cryptocurrency exchanges such as Kraken, Bullish), retail trading platforms such as Robinhood, digital asset service providers such as GalaxyDigital, AnchorageDigital, and Nuvei. In early 2025, DBS Bank, the largest bank in Southeast Asia, became the reserve custodian of USDG, further enhancing its compliance and credibility. USDG is unique in its innovative revenue-sharing model. While traditional stablecoins such as Tether (USDT) retain all interest income from reserve assets (such as U.S. Treasuries), USDG distributes part of its income to companies that participate in the construction of network liquidity and connectivity. This incentive mechanism encourages partners such as exchanges, payment platforms and wallets to promote the use of USDG, thereby increasing the overall activity of the network. Paxos CEO Charles Cascarilla once said that the goal of USDG is to be "open to everyone" and accelerate the popularization of blockchain technology at the social level by incentivizing the use of global stablecoins.

As of April 2025, USDG's market capitalization has reached $245.6 million, up more than 300% since the beginning of the year, making it one of the fastest growing stablecoins. Despite a recent drop in trading volume of 22.46% and price fluctuations of about -23.69%, its listing on more than 10 exchanges around the world (such as XT, EarnBit, PDAX), as well as its integration with mainstream trading pairs such as USDT and BTC, show strong market potential.

Second, Visa's joining: the "blockchain turn" of traditional finance

The joining of Visa is undoubtedly a key turning point in the development of the USDG Alliance. As a leader in the global payment industry, Visa has a huge payment network covering more than 200 countries and regions, processing hundreds of billions of dollars in transactions each year. Its interest in blockchain technology is nothing new: as early as 2021, Visa worked with Circle to support the payment function of USDC; in 2023, Visa tested a stablecoin settlement solution on the Solana blockchain. However, joining the USDG Alliance is the first time that Visa has deeply participated in a stablecoin ecosystem as an alliance member. This is not only an endorsement of Paxos and USDG, but also reflects the profound change in the attitude of traditional financial institutions towards blockchain technology. The following are some thoughts from Aiying:

1. Why choose USDG?

Visa's choice of the USDG Alliance may be based on the following considerations:

• Compliance and credibility : USDG is issued by Paxos in Singapore and is strictly regulated by the Monetary Authority of Singapore (MAS). The reserve assets are held by DBS Bank, and transparent reserve reports are published monthly. This high standard of compliance is critical to a global company like Visa.

• The attractiveness of revenue sharing

  : USDG's revenue sharing model provides economic incentives for partners. Visa can get a share of reserve revenue by integrating USDG, which provides a new business model for its exploration of blockchain payments.

• Openness and flexibility: The USDG Alliance is open to any qualified enterprise, allowing Visa to participate in a multi-party collaborative ecosystem without sacrificing control.

• Market growth potential: Although USDT and USDC dominate the stablecoin market (combined accounting for about 90%), USDG's rapid growth and differentiated positioning make it a new player worth betting on.

2. Visa's role and contribution

Although the specific details of the cooperation have not been disclosed, Visa may bring value to the USDG Alliance in the following aspects:

• Global payment network integration: Visa's payment infrastructure can make USDG more easily embedded in cross-border payments, merchant settlements and consumer transaction scenarios, significantly enhancing the practicality of stablecoins.

• Brand endorsement: Visa's joining adds the authority of traditional finance to the USDG Alliance, which may attract more support from banks, payment companies and even regulators.

• Technical synergy: Visa's blockchain experiments (such as settlement pilots based on Ethereum and Solana) can be combined with USDG's multi-chain expansion plan to optimize transaction efficiency and costs.

• Market education: Visa's global influence will help popularize the concept of stablecoins to consumers and businesses and accelerate its mainstreaming.

3. The integration of traditional finance and blockchain: opportunities and challenges

Visa joining the USDG Alliance is a microcosm of the integration of traditional finance and blockchain technology. This trend has become increasingly evident in recent years: JPMorgan Chase launched the blockchain platform Onyx and the stablecoin JPM Coin; PayPal issued PYUSD; and asset management giants such as BlackRock actively invested in crypto infrastructure. However, Visa's move is of special significance because it directly participates in a multi-party collaborative stablecoin network rather than developing a closed system alone. 1. Opportunity: The global potential of stablecoins As an important application of blockchain technology, stablecoins are reshaping the global financial landscape. Here are the opportunities that the Visa and USDG alliance could unlock:

• Cross-border payments revolution: Traditional cross-border payments have been criticized for high fees and settlement delays. USDG's instant settlement and low-cost features, combined with Visa's global network, may significantly optimize international remittances, e-commerce payments, and inter-enterprise settlements.

• Financial inclusion: In areas underserved by traditional banks (such as Southeast Asia and Africa), USDG can provide access to digital dollars for people without bank accounts through Visa's payment channels.

• Enterprise-level applications: Visa's participation may promote the application of USDG in enterprise scenarios such as supply chain finance and trade finance. For example, USDG can be used to pay suppliers in real time or optimize cash flow management.

• Opportunities for regulatory cooperation: Visa's compliance experience and global influence will help the USDG Alliance communicate with regulators and promote the legalization and standardization of stablecoins.

2. Challenges: Competition and Uncertainty

Despite the bright prospects, the cooperation between Visa and USDG Alliance also faces multiple challenges:

• Market Competition: The market dominance of USDT and USDC is difficult to shake. Tether's market value exceeds US$110 billion, USDC is about US$35 billion, and USDG's US$245.6 million is still small. How to attract users and merchants to switch to USDG is a long-term issue.

• Regulatory pressure: Global regulation of stablecoins is becoming increasingly stringent. The United States has not yet issued clear stablecoin regulations, and although the EU's MiCA framework has come into effect, its specific implementation is still uncertain. Visa and Paxos need to remain compliant in a multi-national regulatory environment.

• Technical bottleneck: USDG currently runs mainly on Ethereum, and high transaction fees and network congestion may limit its expansion. Planned multi-chain support (such as Solana) needs to be implemented as soon as possible.

• Market volatilityRecent USDG trading volume and price fluctuations show market instability, which may affect user confidence and the alliance's promotion rhythm.

Fourth, the future of the USDG Alliance: the ambition to reshape global finance

The joining of Visa has injected new impetus into the USDG Alliance, but this is only the starting point of its grand vision. Paxos plans to further expand the influence of USDG through the following strategies:

• Attract more traditional financial institutions: Visa's demonstration effect may lead other banks or payment giants (such as Mastercard and PayPal) to join and form a broader alliance.

• Embedded in mainstream payment scenarios: Paxos has partnered withStripe to integrate USDG into the "Pay with Crypto" product. Visa's payment network may further accelerate the application of USDG in e-commerce, travel and subscription services.

• Expanded blockchain support: USDG plans to support high-performance blockchains such as Solana to reduce transaction costs and improve user experience.

• Global Market Penetration: Through cooperation with partners such as Kraken and Robinhood, USDG has been launched on exchanges in North America, Asia, and Europe, and may target emerging markets such as Latin America and Africa in the future.

More importantly, the openness and revenue-sharing model of the USDG Alliance give it a unique competitive advantage. Unlike the centralized model of USDT and the institutional orientation of USDC, USDG closely connects exchanges, payment platforms, and custodians through an incentive mechanism, building a collaborative and win-win ecosystem. This model not only lowers the entry threshold for partners, but also lays the foundation for the long-term growth of stablecoins.

V. Conclusion: The Next Decade of Stablecoin Market

Visa joining Paxos' USDG Alliance is not only a milestone in the cooperation between the two companies, but also a symbol of the integration of traditional finance and blockchain technology. In the wave of digital transformation of the global financial system, stablecoins are becoming a bridge connecting tradition and the future. With its compliance, openness and innovative revenue sharing model, the USDG Alliance is expected to open up a new world between USDT and USDC.

However, the road to success is not an easy one. USDG needs to prove its value in the fierce market competition while coping with multiple challenges of regulation, technology and user trust. Visa's participation adds confidence to this goal, but the ultimate success or failure depends on whether the alliance can turn its vision into reality - a faster, fairer and more open global financial network.