Visa becomes first card network to settle transactions in cryptocurrency
We missed this earlier: Visa Inc. became the first major card network to settle transactions in crypto-currencies, with the direct acceptance of payments in USD Coin (USDC), the company announced on March 29. The card payments network used the Ethereum blockchain to carry out the settlement.
USD Coin is a stablecoin whose value is pegged to the US dollar. Visa chose USDC as its first digital asset because of its demand, stability, and security, the company said in a separate blog post. Visa has partnered with Crypto.com to offer the USDC settlement service and is expected to add more partners later this year.
“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”—Jack Forestell, executive vice president and chief product officer, Visa
Visa currently supports more than 160 currencies and moves billions of dollars a year across thousands of institutions. It has been working over the past year with Anchorage, the first federally chartered digital asset bank, towards using Visa’s existing treasury infrastructure to support digital currencies, the release stated. Earlier, Visa’s settlement process required partners to settle in a traditional fiat currency, adding additional cost and complexity to partners dealing with digital currencies. For example, if a customer used a Crypto.com Visa card to pay for a coffee, Crypto.com had to convert digital currency into traditional money to settle this transaction with Visa. But now Crypto.com can directly send USDC to Visa’s Ethereum address at Anchorage to settle its obligations.
“We’ve seen record-breaking growth in our business and the broader crypto ecosystem over the last year. To continue accelerating the world’s transition to cryptocurrency, we need partners who understand the opportunity and the tools that will help us get to market faster and more efficiently. Having been a Visa partner for several years, we’re excited to deepen that relationship through our global agreement and to pioneer an exciting world-first in stablecoin payments”—Kris Marszalek, Co-founder and CEO of Crypto.com
Back in January, Alfred F. Kelly, Jr, chairman and chief executive officer at Visa, stated that he wants the company to lead the way in ensuring cryptocurrencies become widely accepted, safe, and convenient to use. “Our strategy here is to work with wallets and exchanges to enable users to purchase these currencies using their Visa credentials or to cash out onto a Visa credential to make a Fiat purchase at any of the 70 million merchants where Visa’s accepted globally,” he said.
Visa’s move is the latest sign of growing acceptance of digital currencies by mainstream payment companies. Its biggest competitor Mastercard is also working on supporting crypto-currencies on its network.