Visa Settles Transactions with USDC Stablecoin

Visa Now Supports USDC for Settlement

Visa, a leading payment card network, has revealed a new capability allowing transactions to be settled using USD Coin (USDC). This stablecoin is built on the Ethereum blockchain, marking a significant step into the digital currency space.

Crypto.com is pioneering this integration, becoming the first company to pilot the new functionality utilizing its Visa-branded cards.

Understanding USDC

USDC is a stablecoin created through a collaboration between Circle and Coinbase, and is overseen by the Centre consortium. Its value is designed to mirror that of the US dollar.

Specifically, one USDC is consistently valued at one US dollar, which is why it’s categorized as a stablecoin.

Maintaining Stability

To ensure the consistent value of USDC, its partners maintain reserves of US dollars in bank accounts. These reserves correspond directly to the number of USDC tokens in circulation.

Regular audits are conducted to verify that the amount of USDC issued is fully backed by equivalent USD holdings.

The Advantages of Stablecoins

Despite the increasing digitization of money, stablecoins offer unique benefits. Like other cryptocurrencies, they provide enhanced flexibility in sending, receiving, and storing value.

A bank account isn’t required, and the system is easily programmable, eliminating the need for legacy systems, bank integrations, and associated transaction fees.

Blockchain Support for USDC

Initially launched on the Ethereum blockchain, USDC now extends support to Algorand and Stellar as well. Currently, Visa is concentrating on the Ethereum version of USDC.

Visa’s Global Currency Support

Visa currently facilitates transactions in 160 different currencies worldwide. This allows cardholders to use their cards seamlessly while traveling internationally.

Card statements display transactions in the user’s home currency, while merchants receive payment in their local currency.

Partnership with Anchorage

Through a collaboration with Anchorage, Visa is incorporating support for its first digital currency. Anchorage recently obtained a federal banking charter, establishing itself as a digital asset bank.

This partnership was likely driven by the need for a reliable and regulated partner, as Anchorage has received regulatory approval.

Benefits for Crypto.com

This new system enables Crypto.com to directly send USDC to Visa. For example, when a Crypto.com customer uses their card with USDC in their wallet, a conversion to USD is no longer necessary.

Crypto.com can transmit USDC directly to Visa’s Ethereum wallet address at Anchorage for settlement. The merchant is then paid by Visa in their preferred currency.

Visa anticipates onboarding additional partners beyond Crypto.com in the future.

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