Credit card company Visa is going to allow the use of USD Coin to handle transactions on its payment network. With this, digital coins, of which bitcoin is the best-known, gain ground in further acceptance by regular financial institutions.
Visa has started a trial with payment and Crypto.com and plans to offer the option to more partners later this year. The USD Coin (USDC) is a cryptocurrency whose value is pegged to the US dollar.
The step of Visa comes at a time when major financial companies, including BNY Mellon, BlackRock and Mastercard, have embraced a number of digital currencies. It is expected that cryptos will become a fixed part of investment portfolios. Tesla boss Elon Musk said just last week that customers can buy electric vehicles with bitcoin, which is an important step forward for the use of cryptocurrency in trading.
“We are seeing an increasing demand from consumers around the world to be able to access, hold and use digital currencies,” says Cuy Sheffield, head of crypto at Visa. According to him, Visa customers would like to develop products that provide consumers with access.
If a customer chooses to Crypto.com to use Visa card to pay a cup of coffee, the digital currency should normally be converted into traditional money in a cryptocurrency wallet. The’ cryptocurrency wallet ‘ deposits traditional currencies into a bank account, which must be transferred to Visa at the end of the day to settle any transactions. This way of working entails additional costs and complexity for companies.
Visa’s latest step, which will use ethereum blockchain technology, puts an end to the need to convert digital currencies into traditional money to settle the transaction. Visa worked with cryptocurrency Anchorage and completed the first transaction this month.