Visa Enables Use of Cryptocurrency for Transactions
By Ahmed Rahma
A week after Tesla disclosed that it has started to accept cryptocurrencies as a means of payment for its electric cars, Visa Incorporated on Monday disclosed that it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network.
The USD Coin (USDC) is a stablecoin cryptocurrency whose value is pegged directly to the United States dollar.
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 said.
Reuters reported that Visa’s move comes as major financial 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.
“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.
The report explained that traditionally, if a customer chooses to use a Crypto.com Visa card to pay for a coffee, the digital currency held in a cryptocurrency wallet needs to be converted into traditional money.
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, strips out the need to convert digital coin into traditional money 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.
However, with the growing acceptance of digital currency, some countries including Nigeria has placed a ban on the currency which seem like a threat to paper money.