The advancement of the GENIUS Act has thrust stablecoins into the spotlight, with Fiserv being the latest firm to enter the market, hoping to reach a wide range of financial institutions that face pressure from fintechs and large banks.
Fiserv said it would launch a digital asset platform, including a stablecoin, FIUSD, that will be part of Fiserv's banking and payments menu by the end of 2025. Additionally, the bank technology company and PayPal plan to make their stablecoins, FIUSD and
Both of these moves, announced Monday morning, would add drastic scale, opening stablecoins to thousands of financial institutions and PayPal's base of more than 430 million consumers and 36 million merchants. It also joins a fast-growing market of stablecoin issuers that includes a
"Not having a stablecoin is like not having a Rolex years back," Elias Ghanem, global head of Capgemini Research Institute for Financial Services, told American Banker. "Announcement doesn't mean adoption, but early adopters, early launchers, will have higher adoption."
What is Fiserv's FIUSD?
With stablecoins, part of the battle is to quickly
Fiserv plans to make FIUSD available through its existing payment technology at no added cost. FIUSD will use stablecoin infrastructure from
"Together with our other cloud-native banking and merchant platforms, we believe FIUSD will provide our clients with the efficiency and optionality they need to thrive in the evolving banking and payments ecosystem," Takis Georgakopoulos, chief operating officer of Fiserv, said in a release. Fiserv did not respond to a request for comment.
Nonbank issuers have dominated the stablecoin market, a trend threatening traditional bank deposits if the stablecoin market were to grow dramatically. The expectation that banks will need to respond provides a potential way for Fiserv to expand its client relationships by supporting banks' issuance of FIUSD and by enabling banks to use Fiserv's digital asset platform to issue their own branded stablecoins.
"After the GENIUS Act was passed last week, we expected to see a flurry of announcements," Gareth Lodge, an analyst at Celent, told American Banker, adding that integrating the stablecoin into Fiserv's existing offerings for banks and merchants is "a huge step forward and democratizes the opportunity."
Fiserv also plans to partner with other stablecoins, announcing an initial collaboration with PayPal, which issues PYUSD, as well as with Paxos. PayPal has spent the past two years partnering with other payment firms to add
PayPal did not return a request for comment by deadline. "Together with Fiserv, we will help bridge the gap between traditional financial systems and new technologies, enabling faster, more cost-effective, and globally accessible payment options for merchants," Frank Keller, executive vice president at PayPal, said in a release.
"There will be no one stablecoin that is universally accepted, so interoperability between Fiserv and PayPal is a major step, but also increases the pressure on others to follow suit," Lodge said.
In addition to stablecoins, Fiserv will support deposit tokens, which it said will "maintain the benefits of stablecoins in a more capital-friendly structure for banks."
That would enable community banks, credit unions and other financial institutions in Fiserv's network to counter large banks such as
More than stablecoins for Fiserv
The stablecoin could help Fiserv's broader position among smaller banks against other financial technology vendors, Jeffries said in an analyst research note.
"While the digital asset platform should provide small community banks/credit unions with a way to stay up to speed with stablecoins/digital assets, we'd expect the adoption curve among smaller banks to be slower than large banks," Jeffries said. "If anything, we think the announcement could help with branding among smaller banks as FI can pitch offering smaller banks similar tech that is being developed by their larger competitors."
Fiserv's strategy will soon face counter moves. Competitors will likely announce more deals such as Fiserv's stablecoin and partnerships with PayPal and Circle, William Blair analysts said in a research note.
"These initiatives will only gain traction, however, if they are pursued on a universal platform, in our opinion. This is why we like Fiserv's deal with Circle, the issuer of USDC, but question the decision to launch a branded stablecoin," Jeffries said. "We see little shared functionality or value in a market littered with individual coins when USDC offers a liquid, functional standard with an established issuer who is building a potentially viable ecosystem."
The ability to support stablecoin commerce via Fiserv's Clover point of sale system and offering smaller financial institutions an ability to compete in the stablecoin market are "smart moves," William Blair said.
Joey Pizzolato contributed to this story.
