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Visa announced Monday that it is now settling payments in the USDC stablecoin on the Ethereum blockchain.
This development means that Visa has become the first major payments network to use stablecoin as a settlement currency. Until now, Visa has settled payments in fiat currencies only.
For its new USDC settlement capability, Visa is initially working with Crypto.com as part of a pilot program, allowing the crypto company to run its card business now entirely in digital assets.
Previously, Visa’s standard settlement process required Crypto.com to settle in fiat currency, adding cost and complexity to the business. From now on, Crypto.com will no longer have to go through conversations and settle with Visa directly at USDC.
“Today’s announcement marks a major milestone in our ability to meet the needs of fintechs running their businesses in a stable currency or cryptocurrency,” said Visa Chief Product Officer Jack Forestell. “And it’s really an extension of what we do every day, securely facilitating payments in all different currencies all over the world.”
Crypto.com Co-founder and CEO Kris Marszalek said the company wants to enable “millions of consumers around the world to access and use digital currencies, “and Visa the ability to “accept and interact directly with digital currencies” enables it to maximize the benefits of digital currencies.
Visa’s settlement agent for USDC capacity is Anchorage Crypto Bank. This means that Crypto.com sends USDC to Visa’s Ethereum address in Anchorage.
“Visa came to us in 2019 with an idea: to make secure, efficient and transparent settlement payments possible in digital currency by connecting Visa’s treasury to the Anchorage custody platform,” said Diogo Mónica, co-founder and president of Anchorage. “This would give the next generation of native crypto issuers the ability to pay directly with Visa in digital currency on a public blockchain.”
Visa said the new service was “a small step forward” for its settlement platform, but “a giant leap” in integrating digital assets.
After further testing and additional conversations with its customers, partners and members of the regulatory community, Visa hopes to launch USDC settlement capability for other partners as well “in the coming year.”
Ultimately, Visa also plans to settle payments in central bank digital currencies (CBDCs). Earlier this month, Visa CEO Alfred Kelly said the company also aims to hedge bitcoin and other cryptocurrencies, as well as stablecoins.
Rival Visa Mastercard also intends to seize business opportunities in the crypto and stablecoins space, as well as the future CBDC space.
© 2021 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.
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