Visa is rolling out a program that permits payments to be settled in the cryptocurrency USD Coin (USDC), replacing the U.S. dollar's customary role in processing such transactions.
The initiative, a partnership between Visa and Crypto.com, was first reported by Reuters on Monday. Consumers could previously use a Crypto.com Visa card to pay for goods and services, but those payments had to be settled in U.S. dollars (USD). The arrangement added a costly and complicated step in the payments settlement process for so-called crypto natives.
Visa's solution: permit Crypto.com Visa payments to be settled via USDC. Card-carriers previously had to convert cryptos held in digital wallets to USD to make a payment. Visa's latest initiative removes the crypto-to-fiat conversion from the process -- permitting payments to be made and settled without having to bring the dollar into the equation.
Visa partnered with digital-assets banking specialist Anchorage to test the USDC settlements solution earlier this month, the company said. Industry participants are closely following developments after Visa alluded to rolling out the digital-assets settlement ability to additional partners, likely later this year.
“Crypto-native fintechs want partners who understand their business and the complexities of digital currency form factors,” said Jack Forestell, Visa's chief product officer, in a statement.
Visa's crypto-to-crypto conversion process uses the Ethereum blockchain to settle transactions.
The push into stablecoin settlements for Visa could also position the payments processor to support similar digital-assets tied to fiat currencies as they come to the market. The area has been closely watched by central banks and sovereign wealth funds.