Dive Brief:
- Fiserv said Monday it will launch a digital asset platform – including a new stablecoin, dubbed FIUSD – alongside its existing payments infrastructure by year’s end, with no extra cost to merchant clients and financial institutions.
- In a related announcement, Fiserv and PayPal Holdings said they’ll partner “to build future interoperability” so consumers can move funds with the FIUSD coin on PayPal. The partnership aims to “expand the use of stablecoins and programmable payments around the globe,” the companies said.
- “With our scale, reach, and technology leadership, Fiserv is uniquely positioned to advance stablecoin-powered payments and help democratize access to blockchain financial services,” Chief Operating Officer Takis Georgakopoulos said Monday in the press release.
Dive Insight:
Fiserv said its network’s extensive reach – about 10,000 financial institutions and six million merchant locations with 90 billion yearly transactions – “will provide instant scale” for the FIUSD digital coin.
Fiserv also said it’s “exploring the use of deposit tokens to maintain the benefits of stablecoins in a more capital-friendly structure for banks.” The Milwaukee-based company is also talking with other potential partners to expand the use cases for stablecoins and tokenized deposits, the release said.
The embrace of stablecoins by large fintech players like Fiserv “may be quite important to stablecoin adoption for consumers/merchants/businesses,” and could increase wider use of the technology, Baird analysts wrote Monday in a client note.
Earlier this month, Fiserv CEO Mike Lyons told investors the company was developing stablecoin capabilities in response to customer interest in cryptocurrency as a potential means of lowering merchant interchange fees. “It’s a great opportunity that plays right into our strengths,” Lyons said June 3 at the Baird Global Consumer, Technology and Services conference.
A combination of blockchain programmability and the stability of fiat currency will make the use of stablecoins and tokenized deposits expand rapidly “due to their ability to settle 24/7, streamline processes, increase efficiency, and power use cases where existing options may be limited,” according to the Fiserv release.
The new coin won’t affect Fiserv’s financial performance this year, but demonstrates the company’s rapid innovation, “which should reinforce its ability to retain share among merchant & financial institution customers as digital asset tech becomes more widely adopted,” TD Cowen analysts Bryan Bergin and Harrison Vivas wrote Monday in a note to clients.
Last week, the largest U.S. bank, JP Morgan Chase, announced the launch of its new JPMD, a stablecoin-like token for institutional clients. PayPal and Circle, along with several other companies, have also launched their own stablecoins.
Fiserv’s stablecoin platform will include technology infrastructure from Paxos Trust and Circle Internet Group. The latter went public earlier this month and has seen its shares soar amid investor fervor for the nascent digital-asset industry, following the embrace of digital assets by President Donald Trump.
Fiserv’s former CEO, Frank Bisignano, joined the Trump administration this year when he was confirmed last month as the new head of the Social Security Administration.
The new Fiserv coin will also be available on Solana, a blockchain platform widely used for stablecoins.
In their release, Fiserv and PayPal said they’ll “strive to identify key opportunities for integrating FIUSD and PYUSD into payment flows, including cross-border transactions, payouts, and merchant solutions.”
Last week, the U.S. Senate passed the GENIUS Act, an initial step in Congress approving regulations for the cryptocurrency industry. The law, if enacted, is seen as creating wider adoption of stablecoins and more use cases among large banks, retailers, investors and others.
The Trump administration has also sought to promote digital assets and blockchain technology, through regulatory agencies by way of a January executive order.
