Visa announced the use of USD Coin to settle transactions with Visa directly on the Ethereum blockchain as part of a new service, reported by Reuters. The move is part of a pilot program to make life easier for cryptocurrency businesses, said Visa. It wants to eliminate the hassle of requiring customers to convert their cryptocurrency holdings into fiat currency. Users have to convert their cryptocurrencies in fiat like U.S. dollars, before settling up their accounts on the Visa network. Visa plans to extend the offer to additional partners later this year.
Usually, Crypto.com has to sell cryptocurrencies to cover its obligations to Visa in cash. But this new program will allow the company to pay in USDC. Through this program, the credit card issuer’s partners will have the ability to exchange USD Coin (USDC) through its payments network. Visa is seeking to make the system available to Fintech companies that deal in cryptocurrency, in particular, USDC, Bitcoin, and Ethereum.
Increasing Adoption of Cryptocurrency
Mastercard, BlackRock, and Bank of New York Mellon have also embraced cryptocurrencies recently. Many have started to speculate that they will become a standard part of investment portfolios soon. Tesla CEO Elon Musk announced last week that customers could use bitcoin to buy their electric vehicles. It’s a key step toward broader use of cryptocurrency.
Jack Forestell, Visa’s Chief Product Officer, said in an announcement that “crypto-native fintechs want partners who understand their business and the complexities of digital currency form factors.” “The announcement today marks a major milestone in our ability to address the needs of fintechs managing their business in a stablecoin or cryptocurrency.”
Cuy Sheffield, head of crypto at Visa, said “We see increasing demand from consumers across the world to be able to access, hold and use digital currencies and we’re seeing demand from our clients to be able to build products that provide that access for consumers.”
Traditionally, if a customer uses a Crypto.com Visa card for payment, cryptocurrency from wallet have to convert into fiat. The cryptocurrency wallet will deposit fiat currency in a bank account, to be wired to Visa at the end of the day to settle any transactions, adding cost and complexity for businesses.
Visa’s latest step will use the ethereum blockchain. It will strip out the need to convert digital coins into traditional money for the transaction to be settled. It said it has partnered with digital asset bank Anchorage and completed the first transaction this month — with Crypto.com. They completed the transaction sending USDC to Visa’s Ethereum address at Anchorage.
Anchorage co-founder and President Diogo Monica said in a statement that Visa came to them in 2019. They have this idea to “make secure, efficient and seamless settlement payments possible in digital currency”. The payment company wanted to connect its treasury with Anchorage’s custody platform. It will provide “the next generation of crypto native issuers the option to directly settle with Visa in a digital currency over a public blockchain.”
