Global payments giant Visa today announced it would allow the settlement of cryptocurrencies on its network, as per a report on Reuters.
The firm has selected the USD Coin (USDC) as part of the first cryptocurrency to be settled. The USDC is a stablecoin that’s pegged on a 1:1 basis with the US dollar and is a joint project of crypto firms Circle and Coinbase.
The pilot is in collaboration with the payment and crypto platform Crypto.com. Visa plans to offer the option to more partners later this year, the report added.
“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,” said Cuy Sheffield, the head of crypto at Visa.
Previously, CRYPTO.COM converted all customer payments from crypto-to-fiat on a near-instant basis whenever they paid with the firm’s Visa card for goods or services. This meant providers like Crypto.com deposited fiat currency in a bank account and wired the funds to Visa at the end of the day to settle any transactions, adding cost and complexity for overall businesses.
The above is very similar to how traditional or crypto exchanges work, meaning the crypto itself was just converted to cash instead of being transferred. But now, Visa’s new move will see all payments occurring directly on the Ethereum blockchain itself.
That would, in turn, strips out the need to convert cryptocurrencies into fiat money in order for the transaction to be settled.
Visa said it has partnered with digital asset bank Anchorage and completed the first transaction this month — with Crypto.com sending USDC to Visa’s Ethereum address at Anchorage.
(This story is developing and will be updated shortly.)
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