Visa conducts first settlement transaction in crypto

Visa

Visa going for the homerun! Visa has said that it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network. The payments giant plans to introduce this new service to its partners later this year.

Reuters reports that Visa has processed a cryptocurrency payment directly on the Ethereum blockchain.

The move is the latest sign of increased adoption of digital currencies by the old guard financial industry, and it bumped the prices of both Bitcoin and Ethereum, roughly 5% each. The former was up 3.14% in the last 24 hours at the time of the writing.

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As Visa Chief Product Officer Jack Forestell notes:

“Crypto-native fintechs want partners that understand their business and the complexities of digital currency form factors. 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.”

Per the press release, Crypto.com sent a USDC transaction on Ethereum to an account at Anchorage custody under Visa’s name. Crypto.com issues crypto backed Visa cards that allow its users to spend the coins in their Crypto.com wallet.

Usually, Crypto.com has to sell cryptocurrencies to cover its obligations to Visa in cash. But this new program will allow the company to pay in USDC.

The pilot could be a bellwether for mainstream acceptance of crypto native payment methods, as it marks the first time Visa has accepted a cryptocurrency payment in lieu of cash for its services. Then again, of the credit card giants, Visa is the one pushing most aggressively into crypto.

USD Coin is a stablecoin, meaning its value is pegged directly to the US dollar.

It is the second-largest stablecoin with an $11 billion capitalization, pegged 1-to-1 with the dollar.

First launched in 2018, USDC is managed by a consortium called Centre, founded by peer-to-peer payments company called Circle, and including cryptocurrency exchange Coinbase and Bitcoin miner company Bitmain, which is an investor in Circle.


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