Need to Know
- Visa will now allow the use of the cryptocurrency USD Coin to settle transactions on its payment network.
- USD Coin is a digital stablecoin, which means its value is directly tied to the US dollar.
- The credit card company launched a pilot program with Crypto.com and will offer the option to more partners later this year.
- Visa is the first major payments network to offer the option to settle payments using USD Coin.
In the latest sign that more conventional finance companies are growing to accept digital currency, Visa has announced that it will now allow the use of cryptocurrency for payment settlements.
On March 29, Visa said it will be accepting USD Coin, a cryptocurrency that is aligned with the US dollar, on its payment network. Visa has launched a pilot to accept payments via USD Coin via Crypto.com, a Visa partner; Visa said it will be expanding the option to pay using USD Coin to more partners later this year.
According to a press release announcing the new capability, Visa has spent the last year establishing the ability to accept digital currency payments within its treasury infrastructure. The company collaborated on the cryptocurrency-payment acceptance infrastructure with Anchorage, which is the first federally chartered digital asset bank in the US, which is Visa’s exclusive digital currency settlement partner. Visa aims to directly support more central bank digital currency (CBDC) opportunities as they emerge in the future, using the infrastructure it built with Anchorage to accept USD Coin.
Currently, using a Crypto.com Visa card to pay for a purchase would require the digital currency held in a cryptocurrency wallet to be converted into traditional money. The cryptocurrency wallet will deposit traditional money into a bank account, which is then wired to Visa — steps that add “cost and complexity”, Visa said in its press release. The new capability eliminates the need for cryptocurrency to be converted into traditional money.
“Crypto-native fintechs want partners who understand their business and the complexities of digital currency form factors,” Jack Forestell, executive vice president and chief product officer of Visa, said in a statement. “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.”
The move to accept cryptocurrency is just the latest in a series of digitally-driven partnerships and innovation from Visa, many of which were focused on serving an increasingly remote workforce, or were in response to a huge spike in online commerce due to the coronavirus pandemic.
These include the recent expansion of its Transferwise partnership, which brings Transferwise’s multi-currency debit cards, which are powered by Visa Cloud Connect, to Asia Pacific, Europe, the Middle East, UK, and US. In November Visa launched new virtual card capabilities for businesses, as COVID-19 led to more companies looking for ways to facilitate payments and reconciliation for remote workers. And in September, the company extended its Instant Transfer service, which utilizes Visa Direct to allow PayPal users to transfer funds to their bank accounts within seconds, worldwide.