Payments giant Visa has announced a significant industry first towards interconnecting digital and traditional fiat currencies with the use of USD Coin (USDC) to settle a Visa transaction.
USDC is a stablecoin being developed by Centre with support from fintech firm Circle and digital currency exchange platform Coinbase. Visa is piloting the capability with Crypto.com, a Visa partner and one of the world’s largest crypto platforms, with plans to offer the USDC settlement capability to additional partners later this year.
As a part of its ‘network of networks’ strategy, Visa is focused on adding differentiated value to the ecosystem and making cryptocurrencies more secure and applicable for payments.
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 use traditional fiat currency, which adds costs and complexity for businesses built with digital currencies. The ability to settle in USDC can ultimately help Crypto.com and other crypto native companies to form fundamentally new business models without the need for traditional fiat in their treasury and settlement workflows.
Visa anticipate its treasury upgrades and integration with Anchorage will 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 at 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,” he added.
David Puth, CEO of Centre, said: “Visa is leading the market with its innovative approach to payments in many forms. We are very impressed with their efforts. Having USDC on the Visa network is an outstanding next step in our mission to connect the world using stablecoins built on Centre standards, starting with USDC.”