Global payments giant Visa announced that it would accept stablecoin USD Coin to settle transactions on its network, which is another big step towards wider adoption of cryptocurrencies.
Visa noted that it was only the start of the journey, and one day it may support Central Bank Digital Currencies (CBDCs) when they become available.
Visa Shares “Some Historic News”
Several years ago, when some major banks or fintechs, such as Morgan Stanley or Barclays, launched blockchain trials, most of them made sure to explicitly detach their blockchain efforts from the crypto industry. Today, Visa presents its cryptocurrency adoption plan as “some historic news,” which is another demonstration that digital assets are not only a marginal phenomenon anymore.
On Monday, Visa said that it executed the first transactions settled in USDC – a stablecoin launched in 2018 by Coinbase and Circle. It is pegged to the US dollar with a 1:1 ratio. Currently, it is the 12th largest cryptocurrency by market and is the most dominant stablecoin in Decentralized Finance (DeFi), which has been the fastest-growing sector within the crypto space.
Visa is collaborating with Crypto.com, a cryptocurrency exchange and payment platform that provides Visa cards to its users. Visa said it would make its option accessible to more partners by the end of this year.
Cuy Sheffield, head of crypto at Visa, commented:
“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.”
Thus, users of Visa-backed crypto cards will be able to use digital currencies to pay at merchants and the transactions will be settled in USDC on blockchain. Previously, if a client used Crypto.com’s Visa card to pay at a merchant, the cryptocurrency held in the digital wallet had to be converted into fiat money.
To build the infrastructure, Visa partnered with Anchorage, which is the first US federally charted digital asset bank. Visa uses Anchorage’s custody platform.
Stablecoins Will Continue to Play a Major Role
Visa’s move demonstrates once again that stablecoins are poised to play a major role, as they act as a bridge between traditional finance and the crypto world. USDT, the oldest stablecoin, is currently the third-largest cryptocurrency after Bitcoin and Ethereum, which reflects the huge demand for digital assets with fixed prices.
Visa selected USDC after analyzing stablecoins based on three main criteria: demand, stability, and security.
The payment giant noted that one day it might support CBDCs when they become available.