Tokenized Podcast
Visa Announce Stablecoin Prefunding and Payouts With zerohash
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TL;DR
Research summary
▶ Visa and zerohash announce partnership
Cuy Sheffield, Visa’s head of crypto, introduces Edward Woodford, zerohash’s founder and CEO, to discuss a partnership covering stablecoin payouts and merchant prefunding through Visa Direct. Woodford says zerohash views wallets as connective tissue for people globally and says its Stablecoin Momentum Report estimates about 2.5 billion stablecoin-enabled wallets worldwide. He gives Revolut, Robinhood, new bank wallets, and GCash as examples, and says Visa Direct can pay stablecoins to those wallets for holders to spend with a Visa-issued card, hold as stablecoins, or convert to local currency. He says zerohash has worked on this technology since 2017. Sheffield describes Visa Direct’s expansion from push-to-card to push-to-account and fiat wallets, and asks how customers can pay out to wallets without themselves managing keys, compliance, or licensing.
▶ Distribution and stablecoin payout use cases
Sheffield says Visa Direct aims to be a large global money-movement platform and that adding stablecoin wallets extends its existing payout capabilities. He observes that some businesses want customers to receive payouts into wallets but prefer to interact in fiat and avoid directly handling stablecoins or blockchains. He asks what happens behind the scenes when a customer supplies a friend’s wallet address for a payout.
▶ Abstracting complexity and reaching wallet users
Woodford says Visa Direct has billions of endpoints and covers over 190 countries, giving large financial-services companies and enterprises access to stablecoins while abstracting questions such as what a stablecoin is and which chain to use. He cites two-sided payroll and marketplace businesses, including Gusto, as use cases: freelancers with accounts at services such as Revolut or a new bank could receive stablecoins instantly, with the provider handling the last mile. He contrasts this with the stablecoin sandwich concept he says people were excited about two or three years ago; in this partnership, stablecoins can move to a wallet and be spent through a Visa-issued card. Woodford says accessibility within familiar apps has shifted over the last two years, and anticipates more US banks accepting stablecoins as a rail. He describes stablecoins as a global, instant, real-time rail that could enable faster or otherwise unavailable payments and access to a dollar account.
▶ Stablecoin-in, fiat-out funding
Sheffield frames two directions for integrating stablecoins into money-movement platforms: fiat in and stablecoin out for payouts such as creator and payroll payments, and stablecoin in with fiat out, which they call prefunding or account funding. He asks Woodford about the benefits when someone funds with stablecoins and receives a fiat payout.
▶ Merchant prefunding and the money-movement stack
Woodford says the announced merchant-prefunding capability lets a merchant fund an obligation instantly and at low cost, without securing a credit line or tying up capital. He says the relationship rounds out the money-movement stack, connecting stablecoins across card, merchant, and network flows. He names zerohash-powered Marqeta-issued cards, downstream merchants including “Koshi,” and payment service providers such as Worldpay. He distinguishes the merchant-prefunding announcement from account funding, which he says zerohash already supports for brokerage and prediction platforms, naming Interactive Brokers and “Koshi.” He describes instant, real-time access to money as the shared benefit.
▶ Last-mile fiat payouts and combining rails
Sheffield says stablecoin payment companies and remittance-orchestration providers around the world need last-mile fiat payouts. He describes Visa’s role as a bridge: a stablecoin company can send stablecoins and Visa can enable a fiat payout in a jurisdiction where that company lacks licensing or connections. He says global money-movement companies will need stablecoins as another rail, and argues that clients need options to combine fiat and stablecoins according to corridor and customer choice. He says this is still at a very early stage.
▶ Onchain interoperability and tokenized instruments
Woodford calls Visa an interoperability layer across accounts, fiat types, and money-movement mechanisms, and describes zerohash as a narrower onchain interoperability layer, powered by its C3 engine. He gives examples including USDC to USDT, USDC to dollars, and cross-chain transfers, then discusses interoperability across instruments such as stablecoins, onchain bank deposits, and onchain money-market funds. He says that the day before or the day before that, zerohash announced an expanded partnership with BlackRock involving stablecoins and tokenized, yield-bearing BlackRock instruments. He closes by emphasizing interoperability and abstracting complexity so people can move money from A to B.
▶ Closing and contact information
Sheffield thanks Woodford for the partnership. Woodford says zerohash is on LinkedIn and X and gives Edwardzerash.com as a contact. Sheffield gives his X handle and visa.com/crypto, then invites viewers to subscribe to Tokenized and says the show will continue covering stablecoins and tokenized real-world assets. The episode ends with thanks to listeners.
Full transcript
[0:30] think is going to change the way that people think about um stable coins. Um so the initial announcement is around two things. The first is stable coin payouts um and the second is around merchant preunding. And so on stable coin payouts, we view um wallets as a connective tissue for people anywhere in the world. And the ability to use Visa Direct to pay to those wallets um is incredibly exciting. So Zero Hash put out a stable coin momentum report that I know that you've read very diligently,
[1:00] Kai. And um we predict that there's about 2.5 billion stable coin enabled wallets globally. So a Revolute wallet, a Robin Hood wallet, a new bank wallet, a G-Cash wallet. And now with Visa Direct, you can pay stable coins out to those wallets and then you could, for example, spend those spend those assets on a Visa issued card. You could obviously hold them in stable coins. You could convert them into your local currency. So for me, it's really about um the the drive of more accessibility towards the use cases and utility of stable coins now that this technology
[1:31] has reached this critical distribution that you know, Zero Hash has been helping build and hopefully been at the front of since since 2017. And when we think about Visa Direct in, you know, the the vision of of the platform over time, it's like we want to be one of the largest most powerful global money movement platforms in the world. And we've been doing this for push to card, you know, I think that's been a business we've been in for a while. We've expanded to push to account. We've expanded to push to to fiat wallet with a number of wallets across the world. So, it just makes a ton of sense to
[2:01] expand to stablecoin wallets as well. And so, it's great to have partners that we could work with to help power those flows. And I think one thing that that I'm seeing, I don't know if you've you've just seen the market of there are a set of customers who want to give, you know, their customers access to pay out to a wallet, but they're not ready to directly hold or interact with stable coins and blockchains themselves. So, they just want to be able to interact in fiat. And so, can you talk a little bit about like what actually has to happen behind the scenes to enable a capability
[2:32] where the customer could just say, "Hey, my friend has a wallet. here's the address, you know, I want the payout, you know, to go to that wallet, you know, without some of the institutions and companies that are in the flow having to manage and navigate private keys and compliance and licensing, you know, which, you know, is not an easy thing for for a lot of companies to do. >> Yeah. So, I think the partnership one is it creates massive distribution. And I mean Visa Direct has um you know billions of connective um endpoints around the world and covers over 190 countries and obviously some of the
[3:03] largest financial services companies and enterprises leveraging this that you know will have access to stable coins with the exact points that you mentioned which is technical ease and abstraction away the complexity around um what is a stable coin what chain am I send on and that's incredibly powerful um you know the use cases that excite me I think you know zero hash has helped drive um growth for example two-sided payroll companies or to any two-sided marketplace like Gusto that we power. And so what this does, it allows for example a freelancer that may have a
[3:34] Revolute account or a new bank account to receive those stable coins instantly and then effectively the last mile um could be done by those providers. So, you know, I think maybe 2, three years ago, people got very, very excited about the stable coin sandwich, which I still think is exciting, but this partnership today is around moving a stable coin and then the last mile could, for example, just be on a stable visa issued um, you know, card. So, it's it's less about um, less for us about the last mile. It's more about getting stable coins as this connective tissue and the number of
[4:05] endpoints. And I think that's what's fundamentally shifted in the last two years is just access accessibility to a stable coin within an application that people already have an account with and people already familiar with. And I think what you're going to see in the United States is more and more um any bank accepting stable coins as a rail as well. So for me this is really about stable coins being a global instant realtime rail um that unlocks a lot of potential use cases. People getting paid quicker, people getting paid at times when they otherwise wouldn't. um getting
[4:36] and and access to effectively a dollar dollar dollar account and and that is incredibly powerful for lots and lots of people around the world. The way I look at it's like any modern money movement platform today, you've got to you have some stable coin integration into it. And so there's fiat in, stable coin out. You know, that's payouts. You know, what we just talked about many use cases around, you know, creators and payroll. We're just seeing more demand to hit those endpoints. But then the other one is stable coin in, fiat out. And so we usually call that preunding. I know
[5:07] we've talked about this concept of account funding. Can you talk a little bit more about how you view those use cases of you when someone wants to fund with the stable coin, what the benefits are and then being able to pay out in fiat from that? >> Yeah, so the the announcement today really covers merchant preunding. Um, so that is an ability for a merchant to fund an obligation um instantly um and at low cost um without either needing to secure a credit line or to tie up capital. And that's incredibly powerful for for merchants um globally. And the
[5:39] way I think about this more holistically from the zeroash lens is zeroash I think what this does is really round out the money movement stack. So now that visa is accepting this through zeroash um in kind of preunding this helps tie out the endto-end flow of money movement. So for example, Zash powers, Marqueta um issued cards. Um then you have merchants downstream like Koshi. Then you have PSPs like World Pay that also use Zero Hash. And so the beauty here is really about this end to
[6:10] end um accessibility of stable coins all the way from the life cycle of a card to a merchant and now directly to the network. And I think that's incredibly exciting. In terms of other elements of account fun that that you referenced um you know we would call that account funding um and you know we power this now for brokerage platforms prediction platforms groups like interactive brokers and Koshi and you know we hope that's part of an expanded relationship um with Visa in terms of a metome
[6:40] movement um in terms of as opposed to a merchant account funding flow that we're announcing today. Um and I think all these things the commonality is instant real-time um access uh to money and and that's a powerful unlock. >> I think on this use case what we've seen is you know there there just more and more stable coin payment companies remittance orchestration providers across the world and what they need more than anything are last mile fiat
[7:10] payouts. Uh, and so that's where it's like, you know, the beautiful thing about Visa is, you know, we want to sit in the middle and and be able to to be a bridge between stable coin companies and the broader ecosystem. And the stable coin companies are coming to us and they're saying, "Hey, like, can you help us with payouts in, you know, random jurisdiction that they have no licensing, no connection to, they want to be able to do a last mile you off-ramp?" we say, "Sure, send us a stable coin and then we'll be able to pay out in fiat and being able to enable that flow, which I think is is very
[7:40] different than you talk to a financial institution and they're saying, you know, I want to send you fiat. That's what I do today." But then I want my customers to be able to enable and pay out in stable coins. And so I I think it's just it's going to become table stakes for every, you know, global money movement payments company you to have this as as another rail. And I guess my perspective on it is I I think that the winning combination is how do you bring fiat and stable coins together? And I think it's going to be hard for most clients to go out and have a stable coin
[8:11] only provider over here and a fiat only provider over there. It's it's really like how do you pick depending upon the corridor, the customer choice, being able to have the options that you can go stable coin, you could go fiat, you can combine them them together. And I think we're just still at the very very early innings of of how this plays out. >> Yeah, I think that's a great point and I think that's what we call our you know at the end of the day Visa is effectively interoperab interoperability layer across any account any type of fiat any type of mechanism of movement of money and zeroash is a more narrow
[8:42] part of that interoperability stack which is effectively the interoperability of onchain money is the way that we frame it and so we call that our C3 engine. So a great example is cross asset. So effectively USDC to USDT, USDC to dollars, crosschain. So there's this fragmentation in terms of the same asset on the same chain. And then I think what we're starting to see even actually explode even more is cross instrument. So for example, a stable coin which is a legally defined term now to for example an onchain bank deposit
[9:12] and creating that interoperability there or even for example a stable coin to an onchain money market fund. And yesterday or the day before we announced a broadened partnership with Black Rockck for exactly that which is stable coins into tokenized uh Black Rockck yieldbearing um instruments. So again I think this all comes back to interoperability and the abstraction and at the end of the day just allowing people to move money from A to B and and that complexity being abstracted by you know Visa Zero Hash um together in the stable coin flow
[9:43] >> for sure. So that's all the time we we have today but thank you Edward really appreciate the partnership. Yeah, we love working with you guys and and excited to to expand it. Uh, and thanks everyone for for watching. Edward, where can people find more about you and and this partnership? >> So, you can follow us on LinkedIn or X. It's just zeroash, one word. Um, or please feel free to reach out. It's just Edwardzerash.com. Hope to hear from you. >> And you can find me on X at Kai Sheffield and visa.com/crypto. So, if you haven't already, subscribe to T tokenized on YouTube, Apple, Spotify, or
[10:13] wherever you get your podcasts. uh excited to keep bringing more stable coin and tokenized RWA content uh to you. Please leave us a review, give us feedback. Yeah, thank you all for listening. Take care.