Visa, Mastercard Aren't The Real Casualties In Citrini's AI-Stablecoin Scenario

Core Viewpoint - The economic rationale behind Citrini's thesis suggests that AI agents will optimize transactions for cost and efficiency, potentially favoring cheaper transaction methods like stablecoins over traditional card networks [1][4]. Group 1: Impact on Financial Institutions - Card-focused banks such as American Express, Synchrony Financial, Capital One, and Discover are identified as having the highest exposure to this shift, as their business models rely heavily on interchange fees [2]. - The interchange fees of 2-3% are significant in machine-to-machine commerce, and if these fees compress, the pressure will primarily affect issuers and intermediaries rather than the networks like Visa and Mastercard, which take a smaller cut [2][6]. Group 2: Market Reaction - Following the publication of Citrini's scenario, financial markets reacted negatively, with shares of Mastercard, Visa, American Express, and DoorDash falling between 4% and 6% [3][5]. - The S&P 500 index also experienced a decline of more than 1% on the day following the news [3]. Group 3: Future Transaction Economics - The shift towards software-controlled transactions is expected to reshape transaction economics over time, as companies explore stablecoins and alternative transaction methods to achieve cost savings of 1-2%, which can significantly impact low-margin businesses [6].