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Visa is embracing cryptocurrency by inviting customers to settle transactions with USD Coin (USDC) over the Ethereum blockchain.
In partnership with federally chartered digital asset bank Anchorage, Visa has launched a pilot program that allows Crypto.com to send USDC, a regulated stablecoin backed by the US dollar, as payment.
Settlement, according to a Visa blog post, is the “unsung hero of the payment lifecycle.” For most people, settling up is as easy as tapping your card and having your payment accepted. But behind the scenes, the settlement process ensures that, at the end of the day, those charges are totaled, converted into the appropriate currency, and sent to the right merchant bank.
This system has served the traditional financial sector for decades, but we’ve entered a new era of fintechs and neo-banks, cryptocurrency and blockchains. And Visa wants to help bridge the gap between crypto-native companies and digital currency.
“Visa came to us in 2019 with an idea—make secure, efficient, and seamless settlement payments possible in digital currency, by linking Visa’s treasury with Anchorage’s custody platform,” company co-founder and president Diogo Mónica said in a statement. “This would give the next generation of crypto native issuers the option to directly settle with Visa in a digital currency over a public blockchain.”
After months of planning, the financial services corporation recently completed its first successful settlement transaction, with Crypto.com sending USDC to Visa’s Ethereum address at Anchorage. “One small step forward for Visa’s settlement platform, one giant step forward for the integration of digital and traditional fiat currencies,” the blog said.
“Crypto-native fintechs want partners who understand their business and the complexities of digital currency form factors,” Visa’s chief product officer Jack Forestell said. This announcement “marks a major milestone in our ability to address the needs of fintechs managing their business in stablecoin or cryptocurrency,” he continued. “And it’s really an extension of what we do every day, securely facilitating payments in all different countries all across the world.”
Mastercard last month announced similar plans to support payments using cryptocurrencies, in an effort to help people save, store, and send money in new ways. The firm, which previously created crypto cards, is no stranger to the digital asset; it already holds 89 blockchain patents, and has another 285 pending.
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