International payment system Visa announced it is in the midst of testing payment settlement in USD Coin (USDC), becoming the first major platform to conduct transactions directly in a stablecoin.
As the mainstream financial system becomes more receptive to digital currencies, Visa’s latest pilot program shows promising results. Earlier this month, Visa conducted a settlement in USDC— a 1:1 ratio pegged to the US dollar— via the Ethereum blockchain, according to a joint announcement between the payments giant and its partner, Crypto.com. The transaction consisted of the crypto platform sending USDC to Visa’s Ethereum address at Anchorage, its digital asset bank.
“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,” said Visa executive vice president and chief product officer Jack Forestell in a statement.
Initially, the process required Cryto.com to settle the payment in a fiat currency, resulting in added costs and increased complications for institutions. However, the latest pilot project now allows payments to be conducted directly in USDC, bypassing the need to convert the cryptocurrency into traditional money.
Going forward, Visa revealed it plans to broaden the program to eventually offer USDC settlement to more partners, after additional successful tests and detailed discussions with clients. Moreover, the ongoing efforts with stablecoins could one day allow Visa to support sovereign digital currencies, or Central Bank Digital Currencies (CBDC), as an increasing number of countries look to develop their own coins.
Following the news, Bitcoin rose to above US$58,000.
Information for this briefing was found via Visa. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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