Visa has announced that it will begin allowing the use of cryptocurrencies on its network to settle payments. It is a major move the global financial behemoth, becoming one of the first traditional financial institutions to begin accepting cryptocurrency as a form of payment settlement.
The news of Visa's cryptocurrency pilot sent global cryptocurrency markets soaring, pushing Bitcoin towards a new all-time-high on the crest of the positive news.
Visa Begins Cryptocurrency Payment Settlement Pilot
Visa will begin a pilot on its vast payment network using U.S. Dollar Coin (USDC), a cryptocurrency stablecoin whose reserves and issue are pegged to 1:1 to actual U.S. dollars.
Visa is working in collaboration with Crypto.com, a major cryptocurrency exchange, and Anchorage, a digital asset bank, to begin accepting the cryptocurrency as payment on its networks using the Ethereum blockchain.
Some form of payment does already exist in kind between Crypto.com and Visa. The Crypto.com Visa card allows cryptocurrency users to make payments from their card as they would normally. Currently, that process involves Visa's partners settling payments in fiat currency, which is converted into or from cryptocurrency.
Each transaction comes with a conversion fee, which adds expense to the overall cost.
Visa's announcement means that Crypto.com Visa users will now be able to settle their payments in USDC directly, without encountering the additional conversion fee. The result is that more users can treat their cryptocurrency holdings, specifically USDC, as a regular currency without worrying as much about painful conversion fees.
Visa isn't the only major fiat payment network beginning to enter the world of cryptocurrency. Mastercard, PayPal, and other payment processing firms have all recently issued statements relating to the introduction or integration of cryptocurrencies. U.S. PayPal users can already use Bitcoin with their regular accounts.
Big Financial Firms Continue Moves Into Cryptocurrency
2021 has been an enormous year for cryptocurrencies. With the price of Bitcoin breaking its all-time high on multiple occasions and crypto-advocates like Elon Musk issuing public support for cryptos, the time appears to be right for more traditional monetary services to enter the ring.
During the previous boom period for cryptocurrency back in late 2017 and early 2018, the market was seen as too young and overly dangerous to invest institutional money.
But now, as these enormous financial networks begin to integrate cryptocurrencies, and as cryptocurrency services such as Coinbase and cryptocurrency mining operations float on the regular stock markets, institutional money can no longer ignore the world of crypto.