With its latest move, Visa makes it essential for financial firms like Mastercard, BlackRock Inc, and BNY Mellon to embrace digitization, while cryptocurrency predictions indicate its presence as regular finance investment options.
On Monday, Visa Inc declared that it would authorize cryptocurrency (USD coins) as a payment mode for settling transactions through its networks. This bold move suggests the growing popularity of digital currencies and their increased acceptance rate in the core finance industry.
Visa Inc started its pilot program that will involve payments and the use of Crypto.com as a crypto platform. The pilot program aims to provide these transaction options to its extended partners towards the end of 2021, it said in a statement to Reuters.
Bitcoin has become a famous cryptocurrency and just witnessed a one-week high, increasing up to 4.5% (hitting $58,300) and continuing to hit the record high of $61,000 during the start of this month.
The USDC (USD Coin) continues to be a prominent stablecoin cryptocurrency. The USDC’s value is directly secured against the US dollar.
This digital step by Visa is a result of top finance firms like Mastercard, BlackRock Inc, and BNY Mellon embracing digital coins, indicating that cryptocurrencies as a general way of financial investment portfolios.
According to Tesla Inc CEO, Elon Musk’s statement last week, “customers can purchase its electric vehicles with bitcoin payments.” It marked a significant move towards adapting cryptocurrency in regular commerce.
The crypto department head, Visa Inc, Cuy Sheffield said, “We see increasing demand from consumers across the world to be able to access, hold and use digital currencies and we’re seeing demand from our clients to be able to build products that provide that access for consumers.”
Sheffield indicated the most recent use cases that involved increasing numbers of crypto wallet companies approaching Visa to issue cards. However, the issuance varies from traditional card issuance procedures, as crypto companies have built their foundation based on digital currency.
“[Crypto wallet firms] source consumer dollars in digital currencies, and they operate their corporate treasury in digital currency, so it’s sometimes been difficult for them to have to manage converting digital currencies back into traditional fiat that is deposited into banks just to settle their obligations with Visa through existing bank wires,” said Sheffield.
Conventionally if a person wants to make use of the Crypto.com Visa card to purchase a cup of coffee, it is essential to convert the cryptocurrency held in the crypto wallet to be converted to traditional currency.
The crypto wallet will deposit in a bank account, the traditional fiat currency, which at the end of the day needs to be wired to Visa for settling any day-to-day transactions, which adds complexity and cost for the business.
Visa’s current move will implement the Ethereum blockchain. It will eliminate the need for converting a digital coin into a traditional currency for settling the transactions.
Visa commented that it has collaborated with digital asset bank Anchorage. They have also completed their very first transaction using Crypto.com and sent USDC to the Ethereum address of Visa Inc at Anchorage.