The article below was written by Colin Harper who is a holder of Bitcoin and works the Tech Desk at CoinDesk.com. The article was posted to coindesk.com on March 29, 2021.
The Crypto Quartet is dedicated to educating the public about cryptocurrencies and blockchain by creating content and sharing content created by others in the Cryptocurrency Space.
As cryptocurrencies continue their journey into mass adoption by the public, VISA, a giant Financial World is joining the cryptocurrency space by settling payment transactions in USDC on the Ethereum Blockchain.
Unfortunately, a large segment of society stills sees cryptocurrencies as something used by criminals because of the F.U.D. put out by the Banking and Financial Institutions in the early days of Bitcoin.
It will be up to cryptocurrency enthusiasts to help educate the public and small “Mom and Pop” businesses on the advantages of accepting cryptocurrencies as a form of payment.
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Visa Settles USDC Transaction on Ethereum, Plans Rollout to Partners
The pilot marks the first time Visa has accepted a cryptocurrency payment in lieu of cash for its services.
Visa has processed a cryptocurrency payment directly on the Ethereum blockchain as part of a new service the payment giant plans to introduce to its partners later this year.
Per a press release shared with CoinDesk, Crypto.com sent a USDC (+0.02%) stablecoin transaction on Ethereum to an account at Anchorage custody under Visa’s name. Crypto.com issues “crypto-backed” Visa cards that allow its users to spend the coins in their Crypto.com wallet.
United States dollar coin, or USDC, is a stablecoin pegged 1-to-1 with the dollar. It is the second-largest stablecoin with an $11 billion capitalization.
Usually, Crypto.com has to sell cryptocurrencies to cover its obligations to Visa in cash, but this new program will allow the company to pay in USDC. The pilot could be a bellwether for mainstream acceptance of crypto-native payment methods because it marks the first time Visa has accepted a cryptocurrency payment in lieu of cash for its services.
“Crypto-native fintechs want partners [that] understand their business and the complexities of digital currency form factors,” Visa Chief Product Officer Jack Forestell said in the press release. “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 goes in on bitcoin, crypto
Of the credit card giants, Visa has been pushing the most aggressively into crypto.
The payment network’s fast-track program has furnished dozens of crypto companies with resources and Visa cards. In addition to Crypto.com, crypto companies BlockFi, Fold, Bitpanda, and others have Visa cards with bitcoin-back rewards. One upstart called Moon allows its users to buy prepaid digital cards with Bitcoin’s Lightning network to use at any Visa-accepting online merchant.
Visa’s USDC settlement with Crypto.com comes almost two months after news surfaced that the payments company is building out APIs for banks and financial institutions to buy and sell cryptocurrencies for their clients using Visa’s network, the Ethereum blockchain, and Anchorage’s custodial services.
Going forward, Visa plans to flesh out its crypto-native services by “support[ing] reconciliation and currency conversion for stablecoins such as USDC” and creating “settlement reports” with blockchain wallet addresses to verify transactions.
Visa also said in the press release that Anchorage will be its “digital asset settlement agent” and that it will “integrate [its] treasury systems with Anchorage.”
“After further testing and additional conversations with clients, partners, and members of the regulatory community, we hope to launch this capability for other partners in the year ahead,” Visa said in a blog post about the news.