Sept 30 (Reuters) - Visa said on Tuesday it will

start testing a new way for businesses to fund international

payments by allowing them to use stablecoins instead of

pre-depositing cash in local accounts.

The move signals growing acceptance of these digital tokens

among major businesses, who have been emboldened by the United

States passing the Genius Act, a law that set clear rules for

stablecoin issuers.

"The Genius Act changed everything. It made everything so

much more legitimate. Before that regulatory clarity, all the

big institutions were sort of on the fence," Mark Nelsen, head

of product for Visa's commercial and money movement solutions,

said in an interview with Reuters.

The company is working with some unnamed partners and

plans to expand the pilot program next year, it said.

The pilot initiative will allow banks, remittance firms and

other financial institutions to pre-fund accounts with

stablecoins instead of traditional currencies.

Such a move could make cross-border transactions faster and

free up cash, as companies often have to lock funds in multiple

currencies worldwide to cover local payouts.

Stablecoins are digital tokens designed to keep a constant

value. They are often backed by traditional assets such as the

U.S. dollar or Treasuries.

Their utility in moving money quickly across borders has

fueled concerns that they could erode the market dominance of

some payment companies and regional banks.

"Stablecoins are moving from crypto gimmick to financial

plumbing. It's one of the reasons we launched an inverse

regional bank exchange-traded fund as I think the regionals are

in trouble," said Matthew Tuttle, CEO of Tuttle Capital

Management, referring to a fund designed to profit when regional

bank stocks decline.

Visa's pilot program, however, highlights how some

incumbents are focusing on collaboration instead of competition,

turning stablecoins into a tool to reinforce their own

infrastructure.

"The amount of software and technology that's been deployed

globally for payments is hard to recreate. So it seems more

likely to just incorporate stablecoin technology into existing

flows," Nelsen said.