Stablecoins complement rather than disrupt credit networks
Lynn Alden argued that stablecoins will complement rather than disintermediate traditional payment networks like Visa and Mastercard over the next five years.
The argument
While she is moderately bullish on stablecoins reaching a $1 trillion market cap within five years, she notes that traditional payment networks offer essential features like transaction reversibility and fraud protection that consumers and institutions demand. She remains constructive on Visa and Mastercard, particularly during valuation dips.
The thesis, stress-tested
✓ What validates it
- ✓Visa and Mastercard maintaining high return on equity (ROE) and profit margins
- ✓Stablecoins being integrated into traditional banking and payment rails rather than replacing them
▸ Risks discussed
- ▸Regulatory crackdowns on stablecoin integration
- ▸Long-term structural shifts in payment technology beyond the five-year horizon
Hear it yourself
"And so I think the overall return on invested capital will be lower, and the market, I think, is rightly spooked about that. It's it's I don't think it's overly bearish. I don't think it's euphorically bullish anymore. I think it's it's it's become more right sized and more company differentiated. I mean, it's not that long ago that that people were very bearish on Google getting disrupted from AI, And then very quickly, Google became an AI darling. So I think it'll it'll become down to how well each one is doing rather"
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