Visa has announced the use of USD Coin (USDC), a stablecoin backed by the US dollar, to settle its transactions over Ethereum, an open-source blockchain.
The company is pilot testing the new capability with its partner Crypto.com and intends to offer the USDC settlement capability to other partners later this year. Visa accepting USDC to settle transactions is said to be the industry’s first attempt in filling the gap between digital and traditional fiat currencies.
Visa executive vice president and chief product officer Jack Forestell said: “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 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.”
Visa said that supporting digital currencies is an important step in its strategy and is focused on making cryptocurrencies more secure, useful, and applicable for payments.
Last year, the company has worked on establishing a pathway for digital currency settlement within its existing treasury infrastructure.
In partnership with Anchorage, the first federally chartered digital asset bank and its exclusive digital currency settlement partner, Visa has commenced a pilot programme.
The pilot is designed to facilitate Crypto.com to send USDC to Visa to settle a part of its obligations for the Crypto.com Visa card programme.
Visa said that the capability to settle transactions using USDC would help Crypto.com and other such crypto native companies evaluate fundamentally new business models.
Furthermore, treasury upgrades and integration with Anchorage would strengthen Visa’s capability to directly support new central bank digital currency (CBDC) in the future.
Anchorage co-founder and president Diogo Mónica said: “Anchorage’s platform has been purposefully built for institutions like Visa to build new products in crypto.
“We’ve been with Visa every step of the way since 2019 and are extremely pleased to see these first stablecoin payment rails come to life through Anchorage APIs.”