Visa moves to enable payment settlements using cryptocurrency
Visa Inc said on Monday that it would allow the use of the USD Coin cryptocurrency to settle transactions on its payment network, the latest sign of the growing acceptance of digital currencies by the mainstream financial industry.
The company told Reuters that it has launched the pilot program with the payment and encryption platform Crypto.com and plans to offer the option to more partners later this year.
Bitcoin, the most popular cryptocurrency, hit a one-week high in the news, rising 4.5% to $58,300 and falling back to a record high of over $61,000 reached earlier this month.
Visa then confirmed the news in a statement.
The USD coin (USDC) is a stable cryptocurrency whose value is directly linked to the US dollar.
Visa’s move comes as finance companies including BNY Mellon, BlackRock Inc and Mastercard Inc take steps to make more use of cryptocurrencies for investment and payment purposes.
Tesla Inc boss Elon Musk, a big proponent of cryptocurrencies, said last week that customers can buy his electric vehicles with Bitcoin, hoping to encourage more everyday use of digital currency.
“We are seeing an increasing demand from consumers around the world to be able to access, hold and use digital currencies and we are seeing a demand from our customers to be able to create products that provide this access to consumers”, Cuy Sheffield, Head of crypto at Visa, said.
Traditionally, if a customer chooses to use a Crypto.com Visa card to pay for coffee, the digital currency held in a cryptocurrency wallet must be converted to traditional currency.
The cryptocurrency wallet will deposit traditional fiat currency into a bank account, which will be wired to Visa at the end of the day to settle all transactions, adding cost and complexity to businesses.
Visa’s final step, which will use the Ethereum blockchain, removes the need to convert the digital coin to traditional currency for the transaction to settle.
Visa said it had partnered with digital asset bank Anchorage and completed the first transaction this month – Crypto.com sending USDC to Visa’s Ethereum address in Anchorage.
