Interview: Inside Fiserv’s Stablecoin Strategy

On Monday, Fiserv announced plans for of its own stablecoin, FIUSD, and a series of partnerships with Circle, Paxos, PayPal, and Mastercard. The move positions one of the most entrenched infrastructure providers in U.S. banking to bring digital asset capabilities to its network of 10,000 financial institutions and six million merchants.

As a global leader in financial technology and payments, Fiserv provides the core systems that power banking, payments, and commerce — from account processing and card issuance to digital banking and merchant acquiring.

We spoke with Cooper Thompson, Head of Embedded Finance and Digital Assets Product, to unpack what’s really behind the announcement.

In our conversation, Thompson explained:

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Cooper, let’s start with the big picture. Why is Fiserv entering the stablecoin and digital asset space now?

We’ve kept a close eye on the digital asset space for years, but as a heavily regulated and trusted infrastructure provider, we took a cautious approach. The evolving regulatory environment, especially with U.S. legislation like the GENIUS Act, created a window for us to move decisively.

For us, stablecoins are the entry point. We see them as digital cash, a new money movement rail. But we’re not stopping there. Our broader strategy includes programmable payments, tokenized deposits, and real-world assets.

Why do you think Fiserv is particularly well positioned in this space?

It comes down to network reach. We serve thousands of financial institutions plugged into our core banking and payment platforms, and millions of merchants globally. No one else has the ability to turn this many endpoints into trusted digital asset nodes.

Importantly, we also see it as our responsibility to empower financial institutions of all sizes — especially those that may not have the same innovation budgets as the largest players. Our goal is to help them enter this space successfully and avoid being left behind by faster-moving competitors.

So how does the stablecoin product actually work? What does the architecture look like?

From a tech perspective, we’re building a stablecoin SDK that works natively on iOS and Android. Banks using our digital banking applications can embed it directly, but we’ll also support third-party integration via APIs.

On the backend, we’re leveraging Finxact, a cloud-native ledger we acquired in 2022, which allows banks to subledger their stablecoin holdings down to individual customers. That means banks keep control of the customer relationship while we manage the complexity in the background.

The customers don’t have to know the concept of a seed phrase, or have a wallet, or even understand what a blockchain address is. We simplify all of that behind the scenes.

Importantly, users will see a separate FIUSD balance. We’re not hiding stablecoins in the backend. We want people to understand what they hold.

What about the economics? Are participating banks going to benefit from the yield on the stablecoin reserves?

Yes, that’s the intent. Circle and Paxos hold the reserves, so the yield flows to them first. But we’re designing the system to share net interest income with participating banks, within regulatory constraints.

There is a lot going on in the GENIUS Act right now when it comes to how interest flows back to entities participating in the network. We’re watching these developments very closely to make sure everything complies.

What kind of use cases are you targeting for banks and merchants?

We’re seeing interest across the board. For banks, it’s about offering borderless payments, faster fund transfers, and programmatic payments like intelligent escrow. Some banks just know they need to be in the space but aren’t sure yet how.

For merchants, the focus is on acceptance and faster settlement. Especially in the SMB space, getting funds faster can be the difference between opening tomorrow or not. Stablecoins help reduce settlement friction.

You’re working with Paxos, Circle, PayPal, and Mastercard. How do these partnerships fit together?

We are collaborating with both Paxos and Circle on the issuance and infrastructure side. Circle brings deep liquidity and network reach with their USDC stablecoin, and Paxos brings interoperability with other stablecoins, notably PYUSD. We will be partnering with PayPal to build domestic and international payments capabilities, bringing the concept of “borderless” transfers to reality.

Mastercard is joining us to explore a stablecoin-backed card product, helping bridge the gap between digital assets and everyday consumer payments. Each of these partners brings unique strengths that enhance our overall offering.

Why did you decide to issue your own stablecoin and not just use existing ones?

Like I said, we have a lot of nodes within our network. We have merchants, we have financial institutions. And so what we want to be able to do is bring them a trusted stablecoin. We are collaborating closely with the stablecoin issuers to white-label and build on top of existing infrastructure. Initially, FIUSD will function similarly to other stablecoins, but over time, we plan to layer on additional controls and functionality tailored to what our clients need.

The tokens we’re integrating with — mainly USDC and PYUSD — are also highly extensible. By launching FIUSD, we gain the flexibility to adapt and expand those capabilities in collaboration with Circle and Paxos. Ultimately, it’s about enabling the specific features that financial institutions and merchants want, and giving them a stablecoin they can trust and control within our ecosystem.

Looking ahead, do you plan to go deeper into DeFi or offer access to more onchain financial products?

In the near term, most use cases will be permissioned and controlled. Think escrow, smart contract-based disbursement, or stablecoin swaps like FIUSD to USDC or PYUSD. True DeFi integrations depend on regulatory clarity. But we are very interested in tokenized deposits. They let banks retain deposits on balance sheet while enabling new financial services.

Final question: Do you see a future where most payments and treasury operations are fully onchain?

We want to enable that future, yes. But we’re grounded in today’s reality. Community banks still fund farmers through ag loans, and that requires deposits. If the world moves onchain, they need to come along too. That’s our mission: build the rails and tools so no institution is left behind.