Solana offers solutions to banking’s ‘bizarre inefficiencies,’ says Mumtaz

Mumtaz insists Visa’s recent expansion of stablecoin settlements to Solana is good for all of crypto

article-image

Pimen/Shutterstock modified by Blockworks

share

Talking to the average person on the street about “still” being in crypto, Garrett Harper says he mostly hears expressions of sympathy for his predicament. 

“I feel sorry you’re still there.”

But Harper insists plenty of positives are still to be found in the space, including the recent news that Visa — the largest payments processing network in the world — is expanding their stablecoin settlement tech to the Solana network.

“It’s not just good for Solana,” Mert Mumtaz, co-founder of RCP company Helius, says. “It’s good for crypto.”

On the Lightspeed podcast (Spotify/Apple), the co-hosts talk about how Visa’s expansion of stablecoin settlement capabilities to Solana is a “no-brainer.” 

A few months ago, Mumtaz says he learned of Visa piloting a number of use cases for the Ethereum blockchain. On X, formerly Twitter, Mumtaz posed the question, “Why aren’t they using Solana for this?”

“I’ve worked in all kinds of different stacks of the payments infrastructure and engineering,” he says, and Solana seemed like an obvious choice to him.

Replies promptly followed, one in particular suggesting Mumtaz was delusional to imagine Solana was even a viable option for Visa to consider. As soon as Mumtaz saw Visa’s announcement post on X, he says, “I went back to that tweet and then I replied with it. So that was fun.”

Bizarre inefficiencies in the banking system

In the legacy banking system, sending money internationally requires multiple “hops,” Mumtaz says, with each step encountering fees and varying regulatory barriers. “There are pretty bizarre inefficiencies with that system,” he says. “If you use Solana for something like this, you basically pay no fee.”

“Solana’s average fee is 0.00025 dollars,” Mumtaz says, “and the blocks finalize in 400 milliseconds. It’s open 24/7 (‘hopefully,’ he adds).”

“Not only is it better for the merchants who can now get paid instantly instead of having the money wait in their acquirer account,” he says, “but it’s actually good for Visa because now they can save money.”

Mumtaz’s favorite part of the story, however, is seeing Solana receive validation from the leading payments provider in the world after being “through the ringer” following the FTX fiasco.

“We always knew [the technology] would work with things like this and would enable those cases,” Mumtaz says. But Solana needed “pioneers in the field to get the stamp of approval.” 

“And that’s essentially what Visa has done here.” 

The move acts as a “social signal,” Harper says, giving other companies the “thumbs-up” to go ahead with their potential projects. He notes that most applications will likely be at the business-to-business (B2B) level, at least initially, before reaching the retail level.

“At some point,” he says, “you want to get where normal people like me and you are holding onto USDC and having a reason to spend actually at the point of sale level. That would be like if I go buy, I don’t know, a t-shirt, I’m actually using USDC.”

This sort of transaction would happen “behind the scenes,” Harper says, where Visa facilitates stablecoin payments to merchants if they decide to opt in for advantages such as lower fees and faster settlement speeds.

“This is [the] backend that’s setting everything up.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Though the opposing flow trend is likely to slow over time, industry watchers note, bitcoin fund assets could one day eclipse the $90 billion gold ETF space

article-image

Celestia had the first mover advantage. EigenDA has staked ether. What sets Avail apart?

article-image

Bitcoin moved 1% higher Monday morning in New York, Matrixport analysts say $62,000 could happen next month

article-image

It’s hard to believe right now that crypto — even with all of its flexibility and massive capabilities — could ever be like cash on the internet

article-image

Michael Saylor announced Monday morning that MicroStrategy bought 3k more bitcoin after the X account was compromised over the weekend

article-image

Plus, Pudgy Penguins grows its brand and a group of Autoglyphs sell for $14.5 million