Visa Inc just announced it will allow the use of the cryptocurrency USD Coin (USDC) to settle transactions on its payment network which is monumental and is another sign of growing acceptance of digital currencies by the mainstream financial industry.
I saw the news on twitter as crpto.com tweeted successfully conducted the first settlement about 2 hours ago!
Visa has launched the pilot program with payment and crypto platform Crypto.com and plans to offer the option to more partners later this year. It will be interesting to see who joins that list. This move comes as other major finance firms including BNY Mellon, BlackRock Inc and Mastercard Inc have embraced some digital coins, sparking predictions that cryptocurrencies will become a regular part of investment portfolios and every day use.
“We see increasing demand from consumers across the world to be able to access, hold and use digital currencies and we’re seeing demand from our clients to be able to build products that provide that access for consumers,” Cuy Sheffield, head of crypto at Visa, said.
So if you can't understand why this is so big here's how the Crypto.com Visa card has traditionally worked. If a customer chooses to use a Crypto.com Visa card to pay for an item, the digital currency held in a cryptocurrency wallet needs to be converted into fiat. The cryptocurrency wallet will deposit traditional fiat currency in a bank account, to be wired to Visa at the end of the day to settle any transactions, adding cost and complexity for businesses. Visa’s latest step, which will use the Ethereum blockchain (I wish they would of used ALGO), strips out the need to convert digital coin into fiat in order for the transaction to be settled.
Visa said, it has partnered with digital asset bank Anchorage and completed the first transaction this month — with Crypto.com sending USDC to Visa’s Ethereum address at Anchorage as proof form their tweet.
I think we will see other financial institutions following in VIsa's footstep. I don't think the Ethereum blockchain is the optimized for this type of work, but I do understand it's the big boy next to Bitcoin. I would much rather see XLM, ALGO or HIVe with cheaper faster transaction handle the work.