Fiserv stock jumped for a second straight day Tuesday, leading the S&P 500 as it rolled out its third stablecoin partnership in two days, this one with Mastercard. MA stock also climbed as Wells Fargo came to its defense, adding to a string of research reports downplaying the retail impact of stablecoins as being "way overblown."
The frenzy of activity comes as Congress appears close to advancing the GENIUS act, providing a framework to regulate digital tokens pegged to the value of the U.S. dollar. The legislation passed the Senate last week in a 68-30 vote. It still needs to pass the GOP-controlled House.
Fiserv-Mastercard Partnership
Mastercard said in a news release that it will offer FIUSD across its global payment network, enabling people and business to use Fiserv's newly announced stablecoin across more than 150 million merchants.
"This work with Fiserv is setting the stage for a new era, where stablecoins are as ubiquitous and trusted as fiat currencies, driving choice and innovation for all," Chiro Aikat, Mastercard's copresident in the Americas, said in a statement.
Fiserv announced its new stablecoin on Monday, saying it plans to launch by the end of the year. The payments firm said it would use stablecoin infrastructure from new IPO Circle Internet Group. Fiserv's effort will "democratize access" to stablecoin technology, affordably providing it to its 3,000 community and regional bank customers, Chief Operating Officer Takis Georgakopoulos told the Wall Street Journal, which broke the news.
Also Monday, Fiserv and PayPal announced plans to build interoperability between their respective stablecoins, FIUSD and PayPal USD.
Stablecoin Threat To Mastercard, Visa
Mastercard and Visa, and to a lesser extent Fiserv, sold off earlier this month as the WSJ reported that Amazon and Walmart were considering issuing their own stablecoins.
On Tuesday, Wells Fargo recommended buying Mastercard and Visa on stablecoin-related weakness, calling it "way overblown."
On Monday, Wolfe Research reiterated an outperform rating and 655 price target for MA stock, saying that the risk from stablecoins is focused on select cross-border business-to-business payments and remittances, according to TheFly. Wolfe downplayed the potential for consumer payments disruption.
In a June 13 note, William Blair analysts including Andrew Jeffrey wrote, "We do not believe stablecoins are well suited for B2C commerce, even as merchants view them as a potential means of lowering card acceptance costs."
Jeffrey added that "Visa and Mastercard are building stablecoin infrastructure that can support commerce on their (payment) rails, positioning them to continue partnering with banks for issuance while possibly lowering merchants' acceptance costs."
S&P 500 Rally
Fiserv stock raced up 3.8% to 177 in early Tuesday stock market action, making it the No. 1 early performer among S&P 500 stocks. FI jumped 4.4% on Monday, but closed 28.5% below its 52-week high from early March.
MA rose 2.6% in early action, while Visa gained 1.4%. Both Mastercard and Visa had failed breakouts earlier this months and knifed through their 50-day lines, with Mastercard falling all the way to its 200-day moving average.
Circle Internet Group was off 7.7% to 243.25 early Tuesday, after surging 9.6% on Monday, with an intraday high just shy of 300.
The S&P 500 rally continued early Tuesday with a 0.7% gain on hopes that an Israel-Iran cease-fire will take hold. The S&P 500 rallied nearly 1% on Monday, finishing less than 2% below its Feb. 19 all-time closing high.
