A turf war is breaking out in the vast world of digital payments – and the incumbents are suddenly on defense. Tech firms and crypto startups are moving in on territory long dominated by Visa and Mastercard, powered by a new type of currency – the stablecoin – and a pitch merchants can’t ignore: lower fees, faster settlement and a way to bypass the big two altogether.It’s a tech threat and a financial threat. Digital tokens, which are typically pegged to the dollar, allow consumers to pay merchants directly from their crypto wallets – without routing payments through a bank or card network. Last year alone, US businesses paid an estimated $187 billion in swipe fees, most of it via Visa and Mastercard’s systems. Stablecoins promise to make that toll much lower, or even obsolete. “It’s clear that eventually this entire space could be a threat to TradFi providers,” said Christian Catalini, founder of MIT Cryptoeconomics Lab. That pressure is prompting Visa and Mastercard to brand themselves – not as old-school toll collectors – but as the backbone for all kinds of digital transactions, including those originally designed to bypass them. With Trump poised to sign the legislation that creates formal federal oversight of stablecoin issuers, they’re touting enhancements to longstanding efforts in areas including stablecoin settlement and crypto-linked cards. Visa and Mastercard have also highlighted initiatives in cross-border payments, one of the most popular use cases for stablecoins. Visa Ventures invested in stablecoin infrastructure provider BVNK earlier this year. Mastercard recently announced it’s joining the Paxos Global Dollar Network, allowing Paxos to help institutions on its network mint and redeem a stablecoin known as USDG, while also backing stablecoins including Fiserv’s FIUSD, PayPal’s PYUSD and Circle’s USDC.