Fiserv stock surged Monday on a Wall Street Journal report that the S&P 500 payments giant will launch a stablecoin platform, as well as its own stablecoin, aiming to make the cryptocurrency accessible to its roughly 3,000 regional and community bank customers. Fiserv plans to team with the blockchain platform Solana and Circle Internet Group, the new IPO that issues the second largest stablecoin.
The report said that Fiserv also plans to announce a separate stablecoin partnership with PayPal, and further details emerged early Monday. Talks on stablecoin partnerships with card networks are also underway, the Journal said. Shares of Circle rallied in premarket trade.
GENIUS Act Fuels Stablecoin Race
Fiserv intends to launch the stablecoin platform with Solana and Circle Internet by the end of the year, the WSJ said. 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.
Circle Internet was featured as IBD's IPO Stock Of The Week on Friday. The Cathie Wood holding surged around 80% on the week.
Speaking a June 3 Baird investor conference, Fiserv CEO Michael Lyons said the company would reveal plans to develop infrastructure giving financial institution clients "the basic capabilities to custody, to create wallets, more P2P (peer-to-peer payments) on stablecoin," as well as giving stablecoin capabilities to merchant clients.
Fiserv has "13,000 supersmart engineers and you give them a project and they can put — stand up a solution really fast," Lyons said, according to a FactSet transcript.
Fiserv's new effort will "democratize access" to the stablecoin market by making the technology accessible and affordable even for smaller banks, Chief Operating Officer Takis Georgakopoulos told the WSJ.
The Journal said that Fiserv's stablecoin platform won't raise the cost of licensing its technology. It expects to earn transaction fees and "part of the yield earned through reserve investments" that back the value of a stablecoin, such as Treasurys.
Stablecoins are seen as a way to reduce the cost of transferring funds over traditional payment rails, putting pressure on credit card giants.
Fiserv-PayPal Stablecoin Tie-Up
Fiserv and PayPal announced plans to build interoperability between their respective stablecoins, FIUSD and PayPal USD.
Fiserv's Georgakopoulos said the expanded relationship with PayPal "furthers our mission to scale stablecoin-powered payments."
PayPal Executive Vice President Frank Keller said the two companies will work to enable "faster, more cost-effective, and globally accessible payment options for merchants."
Fiserv stock jumped more than 8% to above $171 in early Monday stock market action. Fiserv shares have been beaten down after a great run ended in early March. FI stock closed 31.5% below its 52-week high on Friday.
CRCL stock skipped ahead nearly 5% to around 244. Circle Internet came public on June 5, finishing its first session up about 168% from the offer price at 83.23. CRCL has yet to consolidate long enough to form a buy point.
CRCL is on the watch list of the IBD Leaderboard portfolio of elite stocks.
PYPL gained 0.6%.
