Visa has announced it will enable customers to settle transactions using cryptocurrency in what the payment company has described as an industry first in bridging traditional and digital money.
The move will let customers make payments using the USD Coin (USDC)—referred to as a stablecoin because it is linked to the actual US dollar in terms of price. If someone owns one USDC, they can always trade it for one dollar of traditional currency.
This sets stablecoins aside from other cryptocurrencies such as Bitcoin which have traditionally had volatile market prices.
USDC's popularity as a coin cannot be measured by its price, but another measure of the coin's popularity could be its trading volume, or how much of the cryptocurrency is traded in the previous 24 hours.
This figure is currently up 10 percent, though it is unclear if the increase is directly linked to Visa's announcement at 5 a.m. EDT, Monday.
Visa said it was piloting the capability to offer USDC payments in cooperation with the Crypto.com trading platform and Anchorage, the federally chartered digital asset bank.
The move could make it easier for companies that trade solely in cryptocurrency to settle transactions using Visa. Usually, Visa requires companies to convert their digital assets into a type of traditional currency first.
Kris Marszalek, co-founder and CEO of Crypto.com, said in a statement: "To continue accelerating the world's transition to cryptocurrency, we need partners who understand the opportunity and the tools that will help us get to market faster and more efficiently.
"Having been a Visa partner for several years, we're excited to deepen that relationship through our global agreement and to pioneer an exciting world-first in stablecoin payments."
Jack Forestell, executive vice president at Visa, said: "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."
The USDC stablecoin was introduced by Coinbase and each one is minted by a group called Centre. USDC is traded on the Ethereum blockchain—chosen by Coinbase because of its wide developer support.
Centre holds $1 for every USDC in a special bank account that Coinbase says is constantly audited. Coinbase also says a benefit of the coin is that they can be traded without a bank account.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
