International payment system Visa has announced that it’s testing the ability to settle payments in USD Coin (USDC), becoming the first major payment platform to accept transactions directly in the stablecoin.
The first such settlement in USDC – a stablecoin pegged to the US dollar at a 1:1 ratio and transacted over the Ethereum blockchain – was conducted earlier this month, Visa and its partner Crypto.com announced on Monday. The crypto platform sent USDC to Visa’s Ethereum address at digital asset bank Anchorage.
The move marks “a huge milestone for the industry as crypto and fiat networks begin to converge,” Visa’s partner Crypto.com said on Twitter.
“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,” Jack Forestell, Visa’s executive vice president and chief product officer, said in statement.
Visa’s settlement process initially required Crypto.com to settle in a fiat currency, which could result in additional costs and complexity for businesses. The latest step would allow payments to be settled directly in USDC without converting the cryptocurrency into traditional money.
Visa plans to expand the program, offering USDC settlement capability to more partners later this year after additional tests and talks with clients, the company said. Work with stablecoins could further allow the payment provider to support sovereign digital currencies, known as Central Bank Digital Currencies (CBDC), as more and more countries are currently developing their own tokens.
The global payments giant and the crypto platform have been partners for several years. In 2018, they launched a Crypto.com Visa card, allowing users’ crypto to be converted into one of the supported fiat currencies.
Digital currencies have become more broadly accepted by the mainstream financial industry in recent months. Visa’s rival credit card giant Mastercard announced in February that it plans to allow payments in certain cryptocurrencies on its network this year. Payments companies Square and PayPal have also backed cryptocurrencies.
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