Visa vs. Circle: No GENIUS Act Rules, a $2 Trillion Stablecoin Fight | Dana Love, PhD

[00:00:00]The stable coin turned 12 years old this week. Happy birthday. It's grown to a market of over $300 billion. It's getting big. And this year might be the most consequential since BitUSD launched the first dollar pegged stable coin on July 21st, 2014.

[00:00:17]Circle built USDC. Ripple built RLUSD.

[00:00:22]Visa is now helping build something completely different. a consortium issued stable coin connected directly to the world's largest payment network.

[00:00:32]Until last week, every stable coin that mattered was a single issuer coin.

[00:00:37]Regulated companies like RI uh Ripple and and Circle on one side, unregulated ones like Tether on the other, and they went at it. Now, as the stable coin regulating genius act passes its one-year anniversary, Visa's new platform starts with OpenUSD.

[00:00:54]It allows financial institutions to mint, burn, hold, transfer, and manage stable coins inside a visa controlled environment. That is not simple adoption. That is a reach for the issuer economics, the reserves, and the distribution layer simultaneously.

[00:01:13]Why? Standard Chartered projects the stable coin market could reach $2 trillion by the end of 2028. The Genius Act created the legal framework for that expansion. That's a legal framework whose entire rule book is late being published, but whose go live date is fixed by law.

[00:01:31]Let me break it down for you. On July 10th, Circle received final approval for the from the OC to operate a national trust bank. That's a crypto company that became a federally regulated bank. July 16th, Visa launched the Visa stablecoin platform. That's a payment network that started life as a consortium of banks and now decided to go into business and into the business of minting digital dollars. July 18th, the deadline for every federal stable coin rule under the Genius Act. Five agencies. I don't have enough fingers for 11 proposed rulemakings. I have enough for this one.

[00:02:10]Zero final rules. The Federal Reserve, a primary regulator under the law, has proposed nothing at all yet.

[00:02:18]What does this look like to you? To me, Visa wants to make Circle and Ripple replaceable.

[00:02:25]Three things that I'll prove today and one question that I will answer. Visa rebuilt its original structure, a consortium to mint a dollar token without being the issuer. The company that used its everywhere you want to be as a marketing slogan wants to go back to its roots. Apparently, they know what works.

[00:02:45]I really hope that's their slow and Mastercard was master of the possibilities. So I'm like 95% sure that's right.

[00:02:52]Visa profits whichever stable coin wins and circle only wins if USDC does.

[00:03:00]Circle has built a powerhouse in the crypto space. But look at the open USD partner system. Visa and Mastercard which are both halves of the card duopoly. They're sitting in the same consortium. Circle went from AAA bowl to the pros in one day.

[00:03:16]The rules due last Saturday, never arrived. The scorecard is set, but the rule book isn't. What could possibly go wrong? It means the final rules won't pick the winners, they'll document them.

[00:03:30]And the question, where does this leave XRP and CC? The Canton network is excluded from this contest right now.

[00:03:39]Ripple is absolutely involved, though I know of no plans to weigh in materially.

[00:03:44]I'll show you what I found. Stable coins and money movement are two of the three big areas I see for crypto in the next two years. Tokenization is the third, which also uses stable coins. That list expands if clarity passes because the rigged crypto funding mechanism opens up a broad range of new businesses that could launch. Right now though, this battle is for the very core of crypto.

[00:04:12]I'm Dana Love. This channel is the one place connecting these dots in real time. Subscribe if you want analysis like this in your feed and occasional jokes. Hit the notification bell to see it first. Let's get forensic. President Trump signed the Genius Act on July 18th, 2025. It was public law 119-27.

[00:04:34]It's the first comprehensive federal framework for payment stable coins in American history. Full one to one reserve backing, licensing for issuers, monthly attestations, bank grade anti-moneyaundering programs, and section 13 gave the regulators exactly one year to write the implementing rules. That year ended last Saturday.

[00:04:55]Here is the scoreboard as of July 17th.

[00:04:59]Five agencies, 11 proposed rulemakings, one advanced notice, and 10 proposed rules, zero final rules.

[00:05:07]Zero.

[00:05:09]But the go live date doesn't wait.

[00:05:12]Section 20 sets the act's effective date as the earlier of two triggers. 18 months after enactment, which is January 18th, 2027, or 120 days after the primary regulators issue final rules.

[00:05:27]run the math backward from January 18th because that's what we're going to have to be in. Final rules have to land by roughly September 20th, 2026 to beat that backs stop.

[00:05:37]Three comment periods are still open past the deadline itself. The OCC's AML rule closes July 24th, the FDIC's compliance framework August 4th, and a joint customer identification rule August 21st. No agency finalizes their rules before their own comment window closes. So what happens when regulators miss a statutory deadline?

[00:06:04]Nothing.

[00:06:06]That's the answer and it's the answer that matters. Section 13 has no penalty clause. There's no fallback rule kick.

[00:06:13]Nothing that kicks in. There's no sanction that lands on anyone. The only legal lever is a lawsuit to compel agency action under the Administrative Procedure Act. And no court moves fast enough to matter here. And so at current course and speed, the January 18th starting line seems more likely than the rules being done by September. Now, the agencies would say this is the process working, not failing. Notice and comment rulemaking exists so that a 12 figure industry gets heard before the rules bind it. Congress handed five agencies a one-year deadline for 11 coordinated rulemakings covering reserves, capital, custody, redemption, sanctions, and state certification.

[00:06:59]That timeline was ambitious the day it was signed. Rushing final text to hit a date with no penalty attached would be malpractice, not diligence, they might reasonably say. Sure, but it sounds a lot to me like the the swamp in Washington people talk about doing whatever it wants, elected officials be damned. But even if we accept the argument, it's biased.

[00:07:24]Badly biased because the delay is not neutral. Ask who it squeezes, not the agencies. The act attaches no cost to their miss. It squeezes the issuers.

[00:07:39]Here's the mechanism. To operate under Genius, an issuer needs permitted status. Permitted status requires an approved application.

[00:07:49]And the application machinery, the forms, the review criteria, the processing standards lives inside the rules that don't exist.

[00:07:58]The statute obligates a regulator to decide within 120 days of a complete application, but nobody can file into a framework that hasn't been written. So, every month of agency delay shortens the industry's build window while the January 18th start date stays bolted to the calendar. The regulator slack is the issuers's squeeze.

[00:08:22]And into that squeeze in a single eight-day window, the two biggest moves in the history of regulated digital dollars happened anyway.

[00:08:31]A crypto company be finished becoming a bank. A payment network started becoming a digital dollar mint. Neither one rate waited for the rule book. Why would they? The rule book wasn't coming. They knew it. because they've been making moves, regulatory moves, technology moves, partnership moves since before President Trump signed the bill. I'll show you one example next of that.

[00:09:00]Visa's corporate website says, "Our journey begins in 1958."

[00:09:05]That's the year Bank of America mailed 60,000 unsolicited Bank America cards to the residents of Fresno, California. the famous, if you ever been in payments, Fresno Drop, the first mass market card with revolving credit.

[00:09:22]Now, if you're a regular on the channel, you know that I've I started a payments company that was based on Ethereum. So, this is an area near and dear to my heart, and Visa is frankly a fascinating company.

[00:09:33]But notice what that sentence on their website does. Visa didn't exist in 1958.

[00:09:40]Bank of America did. Visa adopted a forebears invention as its own origin story. Now I know the move when I worked at GTE when we bought Bolt Barannica Newman and then we said we invented the internet. What actually happened is more interesting than the marketing and it's key to what happened last week. By 1966, Bank of America was licensing Bank America to other banks. The licences revolted in 1970. They took the program away from BFA and formed National Bank America Incorporated, a memberowned consortium where competing banks jointly ran one shared payment network. That consortium renamed itself Visa in 1976.

[00:10:28]It stayed a bankowned cooperative for 38 years until the 2008 IPO turned it into a public company.

[00:10:36]Visa's real invention wasn't the credit card. Diners Club beat them by eight years. Visa's invention was the consortium, the structure that lets rivals share one network, share its economics, and grow it together.

[00:10:52]That structure built a company now worth more than half a trillion dollars. On June 30th, 2026, Visa rebuilt it.

[00:11:03]That's the day Open Standard announced OpenUSD, a dollar stable coin governed by a consortium of more than 140 companies.

[00:11:12]Visa, Mastercard, Stripe, Black Rockck, BNY, Google, Coinbase, Standard Chartered, Ripple, an independent company, Open Standard operates it with a board composed of the partners. Zero fees to mint or redeem, no volume caps, and the design choice that changes everything. Nearly all the interest earned on the reserves flows back to the partners minus a management fee. If you called the interest earned on the reserves an interchange fee and called open standards management fee a network fee or assessment fee, you'd have a direct map to the current visa structure. The OpenUSD entity is built a heck of a lot like Visa 2.0.

[00:12:02]And how much are we talking?

[00:12:05]Tether keeps its float and made more profit than BlackRock in 2023.

[00:12:10]Circle keeps its float minus what it shares with Coinbase.

[00:12:14]Open USD pays the float to its distributors. It converts every partner from a customer into a shareholder of the money itself.

[00:12:24]Surprisingly, Circle stock fell 15% within hours of that announcement. Then 16 days later, Visa built the machine room. On July 16th, the Visa stable coin platform launched. Mint, burn, hold, transfer, redeem wallet infrastructure with dual approvals and audit logs.

[00:12:45]Direct plumbing into Visa's settlement, Treasury, and fraud systems. the same rails that reach 15,000 financial institutions and 200 million merchants.

[00:12:57]And note the coin list. The platform starts with OpenUSD and supports circles USDC and Paxos's USDG alongside it.

[00:13:10]That coin list is the tell.

[00:13:13]Visa doesn't need OpenUSD to beat USDC.

[00:13:17]If USDC wins, it wins inside Visa's platform and Visa takes platform economics. If OpenUSD wins, Visa takes a partner share of the float. Visa is the house. The house doesn't bet on hands.

[00:13:33]Now, OpenUSD is announced, not live. Launch is planned for later this year. The partner list started shedding within 72 hours. Samsung and Korean exchange operators denied formal involvement and we have seen a giant consortium coin before. It was called Libra. Facebook led it and Washington strangled it in the crib. Consortium announcements are cheap. Settlement volume is expensive.

[00:14:01]There's an interesting wrinkle buried in all this. Nobody in the USD consortium has disclosed which regulated entity will actually issue the token. Under a statute written entirely around identifiable licensed issuers, the biggest names in American finance announced a dollar token with no named issuer. In 2019, that pretty much got Libra killed. In 2026, with 11 proposed rules and zero final ones, nobody can say what rule it even breaks.

[00:14:33]Circle spent a decade of crypto regulation becoming the issuer of record. Visa spent 68 years learning you'd rather own the network the issuers need.

[00:14:46]One of these companies read the Genius Act as a compliance road map. The other one read it as a market structure memo.

[00:14:53]Which brings us to the question I promised. If the fight is Visa versus Circle, where does that leave XRP and where does that leave Canton's coin? If you're this far into the video, you notice that the angle is very different.

[00:15:08]And uh the reason for that is that the entire other side of the room is a complete mess. Um no book problems.

[00:15:15]Thank God. I'm a Catholic, so you know.

[00:15:17]Um it's getting better.

[00:15:23]Ripple and Canton. The Ripple guys, they sometimes look like they're playing every game at the same time and sometimes they're either on both teams on the field or they are both teams on the field. That's a level of effort that's impressive to me.

[00:15:39]Ripple has RLUSD, its own regulated stable coin, which is issued by Standard Custody and Trust Company under New York Trust Charter. Ripple was in the OC's December cohort with Circle, conditionally approved for a national trust bank. In that group, Bitco converted to a full charter pretty much immediately. Circle converted just July 10th. Ripple, Paxos, and Fidelity are all still waiting. Ripple's also on the Open USD partner list.

[00:16:11]Multiple teams Ripple built I mean it's kind of amazing. Ripple built its own singleisssuer coin, is seeking its own federal charter, and simultaneously took a seat in the consortium whose whole design makes single issuer coins replaceable.

[00:16:28]That's not confusion. That's the same hedge Coinbase made. It's super smart.

[00:16:33]Coinbase is uh Coinbase co-ounded USDC's original governance body with Circle in 2018 and still shares USDC revenue with Circle today. and they joined the OpenUSD consortium. Anyway, the insiders with the most information about stable coin economics are all buying the same insurance. A stake in the consortium in case the consortium wins. When the people who know the business best refuse to bet on one issuer, that tells you what they think of issuer Moes.

[00:17:04]So, what does this do to XRP the token?

[00:17:07]The XRP thesis has always been the bridge. value moving between currencies needs a neutral middle asset. A zero feed consortium dollar wired into Visa's settlement rails plumbed to 15,000 financial institutions is aimed at exactly that corridor in domestic payments. It doesn't kill the bridge thesis. It builds a toll-free highway next to the bridge. Ripple the company hedged XRP the token cannot.

[00:17:39]Now Canton the Canton network is the institutional chain built by digital asset the one running tokenized treasuries and repo for the biggest names in traditional finance. Canton is not in the open USD consortium but do not read that as Canton sitting out the stable coin fight. Canton already picked the digital dollar and it picked circles.

[00:18:02]USDCX, a USDC backed token with the privacy controls institutions require is live on Canton today through circles X reserve.

[00:18:13]Canton was the first chain to integrate it. There's already a completed onchain treasury financing transaction with USDC as the cash leg. And watch what the banks did in the 3 weeks before Visa's launch. June 29th, BNY, the largest custody bank on Earth, made USDC the first stable coin on its digital asset custody platform. July 2nd, Standard Chartered became the first globally systemic bank to offer institutional USDC minting and redemption.

[00:18:51]The same Standard Chartered whose true trillion dollar forecast opened this video. Now check the OpenUSD partner list. BNY is on it. Standard Chartered is on it. The biggest banks in the world joined Visa's consortium and built on Circle's coin in the same month.

[00:19:11]Why would they do this?

[00:19:14]Because they're buying every ticket in the raffle.

[00:19:18]So the OpenUSD fight is a public chain fight for now. Salana, Stellar base, Polygon, not Ethereum. The institutional universe, the one where tokenized treasuries actually settle, currently runs on Circle's dollar, which is mostly on Ethereum. That's Circle's real moat, and it it's the one that Visa hasn't reached yet. When OpenUSD shows up on an institutional chain, that's the escalation. That's a video of its own.

[00:19:45]Subscribe now so you don't miss it. So, let's pull the four threads together.

[00:19:51]Circle becomes the regulated issuer.

[00:19:54]Visa becomes the network above the issuers. Ripple bought a ticket to both futures and the institutional chains where real world assets settle are already running circle's dollar which means Visa's consortium won the announcement war while Circle was quietly winning the bank integrations.

[00:20:13]But the the fight is far from over and it's far from just those two entities.

[00:20:19]Obviously XRP with bank integrations is a huge thing. Don't count out Cantoncoin. There are other coins that are up and coming that you probably should not count out. This is going to be an ongoing battle. The matter is far from settled.

[00:20:34]And the $2 trillion stable coin market is still in play. I told you I'd prove three things. Visa rebuilt its founding structure, the consortium, to reach for stable coin economics without becoming the issuer. They're just on the other side of the consortium. Visa profits, whichever coin wins, while Circle needs USDC to win.

[00:20:56]They're a much bigger stack. And the rules due last Saturday, never came.

[00:21:00]Which means when final rules arrive, they'll be describing a market that already picked the architecture.

[00:21:06]Here's what would prove me wrong. And as you always do, hold me to it. If firms outside that December OC cohort start winning charters on the same timeline, the insiders first read weakens.

[00:21:21]It would surprise me to do a somebody cut the line story, but government is a strange strange place.

[00:21:29]If the final rules land materially tighter than the proposals, the rules of the documentation chain weakens and somebody's actually decided they want to regulate.

[00:21:41]And if USD if OpenUSD misses its launch window or sheds more of its partners or sheds its anchor partners, the Visa threat deflates into a press release. So watch those three markers with me. The stable coin is 12 years old. For 11 of those years, the question was whether crypto payments would ever be regulated.

[00:22:03]That question is now answered. So the question now is who owns the regulated version? And that fight started before the referee showed up and before the referee had a rule book.

[00:22:15]I'm Dana Love, Ph.D. My book is on Amazon. Thanks for inviting me onto your screen and I'll see you in the next one.

[00:22:23]Thanks very much for watching. As you can tell, my home office is still coming together. The water leak has been resolved and now just things have to get put back together and eventually stuff needs to be patched and painted once it all dries out. No mold, apparently. no lasting damage and uh you know I don't have a fountain in my house.