Visa has confirmed that it will allow cryptocurrency payments to settle transactions on its network. However, this is only limited to USD Coin, a stablecoin that is backed by the US Dollar.
The company states that this shows their growing support for Blockchain technology. They also want to make their platform more accessible to crypto wallets.
Visa tells Reuters in a statement that it has launched the program that accepts crypto payment alongside Crypto.com. This is in line with their plan to expand to newer markets and acquire more partners later this year with the hope of increasing their ever-growing client base.
The company doesn’t yet accept other cryptocurrencies such as Bitcoin. This is despite it being the most popular coin.
Visa did not release any reason for this, but experts believe this might be due to the crypto’s extreme price volatility. However, Visa works with crypto platforms and wallets that support Visa V to allow existing customers to use crypto assets.
Visa’s acceptance of USD Coin allows crypto platforms to directly send payments to their system without having to convert digital currencies into fiat.
What about Bitcoin?
Bitcoin’s price jumped by 4.5 percent to $58,300 as soon as Visa announced its new crypto payment settlement program. Financial analysts then expect Bitcoin’s price to reach near its $61,000 record-high it attained earlier this month.
USD Coin is a cryptocurrency that runs on the stablecoin platform. And unlike other coins, its value is equal to the US Dollar and experiences minuscule price fluctuations.
Visa’s recent move isn’t surprising, though. It comes as other financial firms like Mastercard, BNY Mellon, and BlackRock have also moved towards crypto adoption for payments and investments.
Greater mass adoption
Tesla is one of the many other companies that has tilted towards crypto. Tesla CEO and Founder Elon Musk is a major proponent of Blockchain and crypto.
Musk released a statement last week saying that his company’s electric vehicles can now be purchased using Bitcoin. Musk states that the decision stems from his goal of expanding mass crypto usage around the globe.
Meanwhile, Visa Crypto Chief Cuy Sheffield says that the company has observed an increasing demand for clients to access, hold, and use digital currencies for various payments. It then made sense for the financial firm to create a system that would cater to the market’s demands.
What usually happens when a client uses a Crypto.com Visa card to pay for something is that the coin in the wallet is converted into fiat currency.
The crypto wallet then deposits the traditional currency into a bank account, which is then wired to Visa. This makes the process more expensive and complex, which is why it makes sense for both parties to resort to direct crypto payment.
Visa uses the Ethereum Blockchain to facilitate USD Coin payments in its system. This simplifies the process and removes its dependence on digital coin conversion for payment settlements.
Furthermore, the California-based finance giant confirmed that it has partnered with Anchorage in completing its first crypto transaction this month.