Visa Inc (NYSE: V) will begin using the USD Coin cryptocurrency for payment settlement on its network. This is the latest sign that established financial firms are starting to accept digital currencies. Q4 2020 Hedge Fund Letters, Conferences, and More Visa Begins Using USD Coins for Payment Settlements According to CNBC, Visa has the […]
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March 29, 2021 3 min read
This story originally appeared on ValueWalk
Visa Inc (NYSE: V) will begin using the USD Coin cryptocurrency for payment settlement on its network. This is the latest sign that established financial firms are starting to accept digital currencies.
Q4 2020 hedge fund letters, conferences and more
Visa begins using USD coins for payment statements
According to CNBC, Visa launched the pilot program with Crypto.com, a payment and crypto platform. The companies plan to offer more partners the ability to use USD Coin to process transactions later this year. The value of the USD coin is pegged to the US dollar.
Mastercard, BlackRock, and the Bank of New York Mellon have also launched cryptocurrencies recently, so many have begun speculating that they will soon become a standard part of investment portfolios. Elon Musk, CEO of Tesla, announced last week that customers could use Bitcoin to purchase their electric vehicles. This is an important step towards a wider use of the cryptocurrency in trading.
Visa crypto chief Cuy Sheffield told CNBC that global consumer demand for access to, use and holding of digital currencies is increasing. He also said they see their customers’ demand to be able to “build products that give consumers this access”.
How the partnership with Crypto.com will work
Previously, the cryptocurrency had to be converted to fiat currency when customers used a Crypto.com Visa card to pay for something. The cryptocurrency wallet deposits traditional money into a bank account and is then transferred to Visa at the end of the day to process transactions. The process adds costs to businesses and complicates things.
Visa’s new plan will be finalized on the Ethereum blockchain. It eliminates the need to convert digital currencies into fiat money to process the transaction. The credit card company announced that it has partnered with Anchorage, a digital asset bank, to complete the first USD Coin transaction this month. Crypto.com was used to transfer the digital currency to Visa’s Ethereum account in Anchorage.
Jack Forestell, Visa chief product officer, said in a statement that today’s announcement “marks an important milestone in our ability to meet the needs of fintechs managing their business in a stable coin or cryptocurrency.”
Anchorage Co-Founder and President Diogo Monica said in a statement that Visa came to them in 2019 with the idea of ”enabling secure, efficient and seamless billing payments in digital currency”. The payment company wanted to connect its treasury to the Anchorage depository platform and “offer the next generation of crypto issuers the opportunity to settle directly with Visa in a digital currency via a public blockchain”.