Visa, a major player in the payments industry, has announced its further foray into the world of cryptocurrencies, this time by integrating the stablecoin USD Coin (USDC) and the Solana blockchain into its operations.
In its recent announcement, Visa revealed its collaboration with various merchants to facilitate the use of USDC, which is currently the sixth largest digital asset with a market cap of $26 billion, as reported by CoinGecko. Additionally, Solana’s native token, SOL, experienced a 4% increase following this news.
Visa Will Use USDC
Visa is partnering with merchant acquirers, namely Worldpay and Nuvei, to enable them to settle transactions using USDC rather than traditional fiat currencies. In the context of financial transactions, “settlement” refers to the process in which the issuing bank transfers funds from the cardholder’s account, via a payment gateway, to the bank that accepts card payments on behalf of the merchant.
USDC is categorized as a stablecoin, meaning its value is pegged to a stable asset, in this case, the U.S. dollar. Circle, the company behind USDC, maintains a reserve of dollars to back every USDC token in circulation. Stablecoins are widely used in the cryptocurrency world, providing traders with a means to exit transactions when they do not have immediate access to fiat currencies stored in traditional banks.
A Modern Way to Make Payments
Cuy Sheffield, Visa’s head of crypto, emphasized the company’s commitment to leveraging stablecoins such as USDC and global blockchain networks like Solana and Ethereum to enhance the efficiency of cross-border settlements. This move aims to offer Visa’s clients a modern option for sending or receiving funds from Visa’s treasury.
Furthermore, the announcement highlighted Visa’s earlier collaboration with the crypto exchange Crypto.com, allowing it to utilize Ethereum for settling cross-border payments with Crypto.com Visa cards.
Visa’s treasury and settlement systems play a crucial role in facilitating the clearing, settlement, and movement of substantial sums of money on a daily basis. These systems ensure that the correct amount in the preferred currency is received from the issuer and sent to the acquirer.
FTX Made Via Pivot
Visa had previously planned to introduce cryptocurrency debit cards in 40 new countries through a partnership with the now-defunct crypto exchange FTX. After FTX filed for bankruptcy, Visa appeared to pause its crypto initiatives but later signaled a renewed commitment by advertising for a senior software developer role within its crypto team earlier this year.
Image by Marco Verch Professional Photographer, click for license.
