Visa Embraces Cryptocurrency Payment System
The move represents Visa’s launch of a pilot project in a business partnership with the digital assets company Crypto.com. Visa said it plans to offer the USDC settlement capability to other business partners later this year.
Visa’s move to support digital currencies as a new type of settlement capability marks a significant leap forward for the company, its network, as well as the entire cryptocurrency ecosystem. Visa has been focused on bringing differentiated value to its company portfolio while making a system based on cryptocurrency as a mainstream means of payment.
“Crypto-native fintechs want partners who understand their business and the complexities of digital currency form factors,” said Jack Forestell, executive vice president and chief product officer of the company.
“The announcement today marks a major milestone in our ability to address the needs of fintechs managing their business in a stablecoin or cryptocurrency, and it’s really an extension of what we do every day, securely facilitating payments in all different currencies all across the world.”
The company has been working on a new pathway for cryptocurrency settlements within its own infrastructure, which sees billions of dollars being moved each day across thousands of institutions in over 200 markets and 160 currencies.
In partnership with Anchorage, the first federally-chartered cryptocurrency bank and its settlement partner, Visa rolled out a pilot that enables Crypto.com to transfer USDC to Visa to settle a part of its obligations for the Crypto.com Visa card program.
This capability to settle transactions with USDC helps Crypto.com and other companies switch to completely new business models that don’t require fiat money in their settlement workflows.
Startup Savant reported earlier that Visa rival Mastercard will start offering business support for select cryptocurrencies on its platform later this year. The online payments platform Wirex became the first cryptocurrency platform to become a Mastercard principal member, enabling it to directly issue payment cards.
Mastercard’s move came after its rivals made similar announcements, including Tesla’s $1.5 billion purchase of Bitcoin. Just a few days ago, Elon Musk’s carmaker said that its clients are now able to buy Tesla cars using Bitcoin.
“You can now buy a Tesla with Bitcoin,” said Musk in a tweet.
A support page on the carmaker’s website provides instructions on how clients can buy Tesla cars with Bitcoin. Musk said non-US citizens will be able to buy Tesla cars with Bitcoin later this year.
Bitcoin price gained over 4%, Ethereum moved more than 5% higher, while Crypto.com’s native token CRO surged about 10% in today’s cryptocurrency trading session.
Visa announced today it will allow cryptocurrency transaction settlements using the USD Coin (USDC) on its payment network. The credit card company launched the pilot program in collaboration with the cryptocurrency platform Crypto.com and intends to offer the capability to other business partners later this year.
About the Author
Luigi Wewege is the Senior Vice President and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an instructor at the FinTech School which provides online training courses on the latest technology and innovation developments within the financial services industry. Luigi is also the published author of "The Digital Banking Revolution."