Gartner pushes stablecoins ahead of Bitcoin

Gartner, one of the biggest research organisations, has “poured cold water” on Visa’s recent move to include Bitcoin trading on its network. It suggests that the real revolution in payments is more likely to be in stablecoin transactions on the blockchain, and that this is where centralised financial entities should be focusing their efforts.

Visa outlined its plans to pilot its new suite of crypto APIs last week, following PayPal and Square into the crypto arena. Although Gartner believes this is a welcome move and will increase “technical rails between consumers, businesses and blockchains, and help prepare the transition to future payment infrastructure,” Avivah Litan, a Gartner analyst, said it was “hardly a revolution.”

She also remarked that the idea of centralised entities, such as Visa, earning revenue from crypto transaction fees, goes against the ideals of peer-to-peer blockchain payments, writing, “Potential users are left to wonder if, in the future, they will have to pay these centralised services additional transaction fees for moving cryptocurrency across peer-to-peer blockchain networks, defeating the promise of blockchain.”

Litan’s solution is to provide the on and off ramps for payors and payees using stablecoins, because they would then not be involved in the actual payments happening on the blockchain. In this scenario, Visa would still make money “from issuers and acquirers using services such as risk management, onboarding and protections for balances.”

The Gartner analyst concluded her views by saying: “The question remains: will these centralised financial services companies go forward in line with the spirit of blockchain peer to peer payments at the risk of cannibalizing their existing central-clearing house based-revenue streams? The answer will depend on whether or not these firms have any practical choice.”

Gartner, one of the biggest research organisations, has “poured cold water” on Visa’s recent move to include Bitcoin trading on its network. It suggests that the real revolution in payments is more likely to be in stablecoin transactions on the blockchain, and that this is where centralised financial entities should be focusing their efforts.

Visa outlined its plans to pilot its new suite of crypto APIs last week, following PayPal and Square into the crypto arena. Although Gartner believes this is a welcome move and will increase “technical rails between consumers, businesses and blockchains, and help prepare the transition to future payment infrastructure,” Avivah Litan, a Gartner analyst, said it was “hardly a revolution.”

She also remarked that the idea of centralised entities, such as Visa, earning revenue from crypto transaction fees, goes against the ideals of peer-to-peer blockchain payments, writing, “Potential users are left to wonder if, in the future, they will have to pay these centralised services additional transaction fees for moving cryptocurrency across peer-to-peer blockchain networks, defeating the promise of blockchain.”

Litan’s solution is to provide the on and off ramps for payors and payees using stablecoins, because they would then not be involved in the actual payments happening on the blockchain. In this scenario, Visa would still make money “from issuers and acquirers using services such as risk management, onboarding and protections for balances.”

The Gartner analyst concluded her views by saying: “The question remains: will these centralised financial services companies go forward in line with the spirit of blockchain peer to peer payments at the risk of cannibalizing their existing central-clearing house based-revenue streams? The answer will depend on whether or not these firms have any practical choice.”

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