Stablecoin Disruption Thesis Debunked for Visa & Mastercard by Dan Dolev

Disagreement with Stablecoin Disruption Thesis

• 💡 Dan Dolev, senior fintech analyst at Mizuho, expresses strong disagreement with the idea that stablecoins will disrupt major payment networks like Visa and Mastercard.
• ⚠️ He notes that many have been proven wrong when shorting these companies based on similar theses in the past.

Stablecoins: Niche Disruption, Not Broad Impact

• 🎯 Stablecoins are seen as disruptive, but primarily in specific niches like remittances and B2B cross-border payments.
• 🚫 They are not currently disrupting consumer-facing international payments, which are not well-serviced by existing networks.
• 💰 The potential for stablecoins to disrupt interchange fees (around 3%) is questioned, as consumers are indifferent and networks offer benefits like rewards points.

Yield and Monetization Challenges for Stablecoins

• 📈 The yield offered by stablecoins is dependent on current interest rates, making their monetization difficult if rates are cut.
• 📉 As rates decrease, the business model for stablecoins becomes significantly less viable.

USDC Market Cap vs. Narrative

• 📊 There's a significant disconnect between the narrative and reality for stablecoins, exemplified by the USDC market cap remaining stagnant since April.
• 💰 While Tether is larger, its business is also highly dependent on current high interest rates.

Coinbase's Dominance in Stablecoin Revenue

• 🤝 Coinbase holds a favorable revenue-sharing agreement for USDC, receiving 100% of revenue on its platform and 50% from Circle's platform.
• 🔒 This