Original Title: Why Circle believes the next phase of cryptocurrency will focus on payments rather than speculation
Original Author: @benfoxrubin, MasterCard
Compiled by: Peggy, BlockBeats

Editor's Note: As the scale of stablecoins continues to expand, blockchain is gradually transitioning from speculative narratives to becoming a financial infrastructure. Recently, $MasterCard (MA.US)$ launched the Crypto Partner Program, collaborating with multiple institutions including $Circle (CRCL.US)$ to promote the practical implementation of digital asset applications, reflecting that traditional payment systems are reevaluating the role of blockchain.

In the view of Kash Razzaghi, Chief Business Officer of Circle, the widespread adoption of stablecoins will not come in the form of "crypto products," but rather as an invisible financial "pipeline" embedded within the payment system. This article discusses this trend, exploring the path for stablecoins to evolve from transaction tools into payment infrastructure and why traditional financial institutions are beginning to actively participate in this transformation.

Below is the original text:

Circle’s most well-known product is its stablecoin $USDCoin (USDC.CC)$ . Currently, the circulation scale of USDC has exceeded 77 billion USD, making it one of the largest stablecoins globally. However, Circle's ambitions extend beyond this.

The company is committed to building a comprehensive infrastructure to drive the mass adoption of blockchain-based payments and financial services. Specifically, Circle provides developer tools, has launched the Circle Payments Network, and developed its own blockchain, Arc, offering companies blockchain-based payment capabilities and financial functionalities, enabling almost any business to access the on-chain financial ecosystem.

Kash Razzaghi, Chief Business Officer of Circle (responsible for the company's partnerships and strategy), stated: "We are building a system referred to as the internet finance platform, with the goal of significantly accelerating and promoting the trend of money flowing on-chain."

In his view, migrating financial infrastructure to blockchain could enable faster, lower-cost, and more transparent movement of funds. However, he noted that reshaping the entire payment ecosystem is not something any single institution can accomplish independently. Therefore, Circle is collaborating with multiple enterprises, including Mastercard, to expand the use and acceptance of stablecoins globally. This week, Mastercard announced its new Crypto Partner Program, with Circle becoming one of its members.

Razzaghi added: "This requires participation from the entire ecosystem. The involvement of Mastercard brings significant credibility to what this technology can become and how the industry might evolve in the future."

Kash Razzaghi (COO of Circle): When stablecoins and the broader set of technologies achieve mainstream adoption, they will function like 'water and electricity pipelines'—becoming underlying infrastructure that people use without even realizing they are interacting with stablecoins.

Kash Razzaghi was interviewed by the Mastercard News Center shortly after returning from the World Economic Forum (Davos) in January. During his time in Davos, he engaged with numerous individuals from the financial and financial services sectors, aiming to attract more institutions to join the growing blockchain ecosystem.

The following Q&A has been edited for brevity and clarity.

How do you view the current freely floating cryptocurrency market?

Market volatility is to be expected. In fact, speculation has been the primary driver throughout most of the history of the cryptocurrency industry.

What truly excites us, however, is that the industry is transitioning from speculation to infrastructure. Of course, trading and speculation will not disappear entirely, nor should they. The key point is that the industry is undergoing an evolution: moving gradually from a speculative market to becoming part of the financial infrastructure.

The cryptocurrency market has indeed experienced periods of prosperity as well as more volatile phases. These cycles have always existed. If some participants choose to exit, new participants will inevitably enter — this is simply how markets operate.

What were the main points of discussion regarding blockchain at Davos this year?

Nearly all discussions at Davos this year revolved around infrastructure.

The focus was on how blockchain technology and digital assets can address real-world problems or enhance capabilities in fund transfers, value storage, and access to financial systems.

This year's Davos gathering felt highly positive. As regulations increasingly pave the way for institutional participation, the advantages of blockchain infrastructure are becoming more evident. The conversation has shifted away from speculation to focus on practical applications.

How to utilize this technology to transfer tens of billions or even trillions of dollars in value instantly, securely, and at a low cost

How to upgrade the financial system infrastructure that has seen almost no fundamental changes over the past 75 years

The industry generally believes that this transformation will benefit the entire ecosystem. Whether they are financial infrastructure companies, financial market participants, or financial service institutions, all can leverage this technology to upgrade their operations and provide better services.

For a long time, the narrative in the market was: Will blockchain replace banks? Will it replace card organizations? Will it replace the traditional financial system?

But reality is not like that.

What is truly exciting is that the discussion today has shifted to how to upgrade and collaborate on top of the existing financial system. Banks, financial institutions, traditional exchanges, and card organizations are embracing this technology because everyone anticipates that the cost of fund transfers will approach zero and the speed of fund movement will significantly increase.

If the financial system is truly about to be upgraded, what does this mean for Mastercard? How can both parties cooperate to achieve mutual benefits?

At its core, what does Mastercard provide?

Trust.

You have established a global trust network. I personally own a Mastercard. When I swipe my card, merchants feel secure because they know the funds will definitely arrive — because Mastercard guarantees it.

In my view, the importance of trust will never fade.

Mastercard's role in this ecosystem is not only to continue maintaining this network of trust but also to provide more advanced technologies for transactions, simplify payments, make financial services more inclusive, reduce intermediary steps, lower friction costs, and even decrease transaction costs further over time.

As for Circle, the benefits lie in the popularization of stablecoins and digital assets.

We believe that an increasing amount of fund flows will occur on-chain in the future. We think that, in the long term, on-chain fund flows will be more efficient.

Of course, achieving this will require completing many tasks, such as infrastructure development, regulatory frameworks, and compliance systems.

At present, we have not fully reached that stage. However, when Mastercard begins to truly build on-chain products and provide on-chain services to its customers, it will greatly accelerate the adoption of stablecoins.

What are the main use cases for stablecoins currently?

There are three main use cases currently.

Trading and investment

The largest application scenario for stablecoins remains trading and investment in crypto assets.

If you invest in $Bitcoin (BTC.CC)$、$Ethereum (ETH.CC)$ and other digital assets, using USDC as a transaction medium is highly convenient. You can seamlessly switch between different assets and park your funds in a stable-value asset when needed.

Payment (especially cross-border payments)

The second scenario is payment, particularly cross-border payments. If you need to transfer money from one country to another, whether for institutional fund transfers or personal remittances, stablecoins provide a highly efficient solution.

Transferring funds on the blockchain can: reduce intermediaries, lower fees, and shorten settlement times from days or even weeks to just seconds or minutes.

We are already witnessing large-scale fund transfers across almost all industries. Even a large institution that needs to transfer funds from Singapore to New York can complete the transaction via stablecoins without being constrained by banking hours.

In the future, stablecoin payments will not only be used for cross-border scenarios but will also extend to nearly all areas of payment.

Store of value

The third scenario is its role as a store of value.

This demand primarily arises in countries experiencing severe depreciation of their local currency, such as Iran (my birthplace), Venezuela, and Argentina.

In these high-inflation countries, residents often lose trust in their national currency and prefer holding U.S. dollar assets as a hedge. Stablecoins provide an ideal digital tool for storing value in dollars.

We believe that the demand for payments and value storage will drive the stablecoin market size far beyond today's levels.

When do you think stablecoins will achieve mainstream adoption?

There is a viewpoint that when stablecoins, as well as the entire blockchain technology, truly achieve mainstream adoption, they will become underlying infrastructure. In other words, people will simply be holding and sending US dollars without realizing that what they actually hold are stablecoins.

We often use an analogy: when you visit a website, there is HTTP before the URL. But most people do not understand the HTTP technology; they simply use the internet.

A similar situation may arise in the future for stablecoins, where on-chain finance becomes infrastructure, yet users hardly perceive its existence.

Your career spans multiple industries. How has this helped you in your current role?

In reality, there is no such thing as a 'standard career path.' Career development requires both luck and timing, as well as continuously accumulated experience.

If you look back at my career trajectory, it appears quite diverse: the apparel industry, sports social platforms, video distribution platforms, and the cryptocurrency sector.

However, the common thread across these experiences is: entrepreneurial spirit, go-to-market capabilities, business development, and sales expertise.

I have always enjoyed building things from scratch and participating in projects that can impact large numbers of people.

Six years ago, when I joined Circle, I wasn’t particularly 'crypto-native' nor an expert in cryptocurrency. However, once you truly grasp the potential of this technology, it becomes inspiring and fosters a growing sense of mission.

Editor/Rocky