Visa says it has nailed a major industry first in bridging the worlds of digital and traditional fiat currencies: the use of USD Coin (USDC), a stablecoin backed by the US dollar, to settle a transaction with Visa over Ethereum—one of the most actively used open-source blockchains.1
Visa is piloting the capability with Crypto.com, a Visa partner and one of the world’s largest crypto platforms, and plans to offer the USDC settlement capability to additional partners later this year.
Support for digital currencies as a new type of settlement currency marks an important step forward for Visa’s network of networks strategy, which is designed to enhance all forms of money movement, whether on the Visa network, or beyond.
Visa says it is focussed on adding differentiated value to the ecosystem and making cryptocurrencies more secure, useful, and applicable for payments.
The company has spent the last year establishing a pathway for digital currency settlement within Visa’s existing treasury infrastructure, a platform that moves billions of dollars each day across thousands of institutions in more than 200 markets and 160 currencies.
Working with Anchorage, the first federally chartered digital asset bank and an exclusive Visa digital currency settlement partner, Visa has launched a pilot that allows Crypto.com to send USDC to Visa to settle a portion of its obligations for the Crypto.com Visa card program.
Visa’s standard settlement process requires partners to settle in a traditional fiat currency, which can add cost and complexity for businesses built with digital currencies. The ability to settle in USDC can ultimately help Crypto.com and other crypto native companies evaluate fundamentally new business models without the need for traditional fiat in their treasury and settlement workflows. Visa’s treasury upgrades and integration with Anchorage also strengthen Visa’s ability to directly support new central bank digital currency (CBDC) as they emerge in the future.
“Crypto-native FinTechs want partners who understand their business and the complexities of digital currency form factors,” said Jack Forestell, executive vice president and chief product officer, Visa.
“The announcement today marks a major milestone in our ability to address the needs of FinTechs managing their business in a stablecoin or cryptocurrency, and it’s really an extension of what we do every day, securely facilitating payments in all different currencies all across the world.”
“Anchorage’s platform has been purposefully built for institutions like Visa to build new products in crypto. We’ve been with Visa every step of the way since 2019 and are extremely pleased to see these first stablecoin payment rails come to life through Anchorage APIs,” continued Diogo Mónica, Co-Founder and President of Anchorage.