Visa is to become the first large payments network to use a stablecoin as a settlement currency. By partnering with the popular cryptocurrency exchange Crypto.com, the San Francisco-headquartered giant will offer a crypto settlement system for fiat transactions based on the Ethereum blockchain.
According to the announcement from earlier today, Visa has joined forces with Crypto.com to bring its first-ever non-fiat settlement program.
The companys standard settlement process requires parties to settle in a traditional fiat currency. This can “add cost and complexity for businesses built with digital currencies.”
As such, Visa will provide USDC settlements that can help cryptocurrency companies “evaluate fundamentally new business models without the need for traditional fiat in their treasury and settlement workflows.”
Essentially, the pilot will enable Crypto.com (and other crypto companies in the future) to send USDC to Visa‘s Ethereum address to settle transactions under the exchange’s Visa card program. This will be possible by connecting Visas treasury with the crypto platform Anchorage.
The statement also noted that the financial services giant will be able to “directly support new central bank digital currencies (CBDC) as they emerge in the future.”
“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.” – said Jack Forestell – Visa’s Executive Vice President and Chief Production Officer.
Previously, Crypto.com allowed customers based in Canada to apply for Visa cards. Both parties doubled-down on their relationship earlier this month when the exchange joined Visas network by expanding its crypto debit card program.
Interestingly, today‘s announcement had an immediate positive effect on ETH’s price. The cryptocurrency has spiked above $1750 shortly after the news saw daylight.