Visa payments network will soon be open to a settlement with digital currencies, as the card issuer announced today it has completed a transaction using USDC over the Ethereum blockchain.
Visa now settles payments in USDC stablecoin on Ethereum blockchain
Visa has spent the last 18 months establishing a pathway for digital currency settlement over its treasury infrastructure, according to a press release today. The card issuer said it will be working with Anchorage, a digital-assets bank, as a settlement partner as well as Crypto.com as a payment gateway.
Visa also says that these upgrades to its treasury infrastructure will allow the support for central-bank digital currencies (CBDCs) as they roll out in the future.
Jack Forestell, Visa’s chief product officer, stated:
“Crypto-native fintechs want partners who understand their business and the complexities of digital currency form factors. The announcement today marks a major milestone in our ability to address the needs of fintech managing their business in a stablecoin or cryptocurrency, and it’s really an extension of what we do every day.”
Kris Marszalek, the CEO of Crypto.com, added that his firm had been looking for legacy financial partners to partner with to help with the world’s transition to cryptocurrency and Visa fit the bill because of their understanding of the opportunities digital assets present to the global economy.
Diogo Mónica, Co-Founder and President of Anchorage, stated:
“Visa came to us in 2019 with an idea—make secure, efficient, and seamless settlement payments possible in digital currency, by linking Visa’s treasury with Anchorage’s custody platform. This would give the next generation of crypto native issuers the option to directly settle with Visa in a digital currency over a public blockchain.”
In a blog post, Visa said that determining what digital assets to offer as settlement options came down to three factors: demand, stability, and security. For the latter two, Visa said it is primarily concerned with price fluctuations and liquidity as well as compliance and governance protocols.
USDC, in Visa’s opinion, measured up against all of the criteria. Visa cited that the stablecoin has nearly $10 billion in circulation, with a robust developer community and a clear track record of regulatory compliance. Visa also noted the emergence of new use cases forming around USDC, including cross-border B2B payments, trade settlement, and remittances.
In February, Mastercard announced that it plans to bring select cryptocurrencies to its payment network also noting that most digital assets would not be eligible for selection because they wouldn’t meet the company’s compliance requirements.
Both Visa and Mastercard hold large portfolios of blockchain patents. In May of last year, Visa applied for a digital dollar blockchain patent to settle CBDC payments via blockchain.
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