TL;DR Breakdown
- Visa now accepts USDC stablecoin as a settlement currency.
- The company said its customers are increasingly demanding access to digital currencies.
Digital currencies are becoming almost unavoidable for many financial companies, following the growing interest and acceptance across many countries. Today, Visa Inc. has become the first major payment network to support a stablecoin, precisely the USD Coin (USDC), as a settlement currency. Previously, transactions on the network were only settled through fiat currencies such as the US dollar (USD).
Visa now settles payments in USDC
USDC is a stablecoin pegged 1:1 to the US dollar. Per the announcement on Monday, the payment company incepted the new USDC settlement service Crypto.com on the Ethereum blockchain. Previously, Crypto.com Visa card users incur more fees when trying to purchase items using the card because Visa doesn’t accept cryptocurrencies at the time. Hence, the cryptocurrencies had to be converted to fiat currencies.
However, following the development today, this additional cost will be cut, as the payment company now accepts cryptocurrency (i.e., USDC) directly. The USDC sent to the payment company goes into its Ethereum address with Anchorage, a digital asset bank. Head of crypto at Visa, Cuy Sheffield, commented on the development:
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.
Financial companies are joining the crypto space
Cryptocurrencies face much criticism during the early years, especially from financial companies that thought they are threats to financial systems. However, in recent months, some banks have shown strong interest to support the industry, including the likes of BNY Mellon, MasterCard, and many others. Many other major payment networks are likely to follow Visa’s move today.
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