1、EQUITY RESEARCHJune 26,2025Early thoughts on the stablecoin boogeymanThe networks are still deeply embedded in the stablecoin futureOur view:Visa and Mastercard shares are facing pressure due to the growing narrative around thepossible impacts of stablecoins following the passage of the GENIUS Act i

2、n the US Senate,whichopens the path for large retailers(Amazon,Walmart,etc.)to issue their own stablecoins and possiblycircumvent the networks.Our early thoughts are that the concerns are likely overblown.While we viewstablecoins as a potential benefit to cross-border commerce and issuer to acquirer

3、 settlement,we arenot fully convinced of stablecoins being used in consumer payments.Our pushback on the threat isbased on 1)consumer behavior being sticky,especially when cards have a degree of trust that has notbeen proven with stablecoins;2)adoption likely being driven by merchant funded rewards,

4、especiallywith the friction of having to fund digital wallets in order to use stablecoins,which would cut into thesmall potential savings gained from using stablecoins;and 3)the networks have already leaned intostablecoins to act as enablers,which we believe keeps them well positioned in the payment

5、 flow.The use of stablecoins is not compelling to US consumers.In our view,and looking solely at the USmarket,stablecoins would not replace the use of credit cards,but could be used as a substitution fordebit cards.However,we see stablecoins as having a similar friction point as Pay by Bank adoption

6、,which is that cards are already a highly optimized mode of payment they are widely accepted,areintegrated into digital wallets(Apple Pay)and banking apps,and most importantly,provide merchantsand consumers with strong protections such as zero liability for unauthorized transactions,tokenization/enc