Visa Testing Crypto-Based Transaction Settlement Systems

The COVID-19 pandemic has done quite a number on the world’s economy, one many parts of society have yet to recover from. The blockchain industry, however, managed to get severely crippled by it and recover to brand new all-time highs directly after. One of the crypto space in general’s key wins, particularly Bitcoin’s was a new frenzy of positive sentiments regarding both companies and institutions, as both started to make heavy investments by the millions of USD into the space.

Visa Seeing Crypto Demand

Many nations tried to counteract the damage of the economic downfall by printing money. They did so by way of various stimulus packages. This, alongside the fears of inflation and the budding NFT space, has growth be the prime idea behind the crypto space at large. The industry itself is growing and people hold fears that the fiat space is weakening. Many a company has now incorporated crypto services into its offering, with Visa being one of the more prominent ones.

Guy Sheffield stands as the Head of Crypto at Visa, and gave a public statement to Reuters about the matter. He highlighted that the demand to hold, use, and otherwise access digital currencies have increased by the company’s customers. Thus, Visa’s clients are demanding products to help provide access to these things for the consumer.

Innovating With The Times

Visa is aiming big, making an announcement on Monday. This announcement revealed that it will allow for crypto-based payment settlements in the future, having partnered with the Anchorage crypto bank and the Crypto.com exchange platform for the pilot as a whole. Users of Crypto.com boasting a prepaid Visa card from said exchange will be capable of paying for goods through it. All they need to do is top it up with their respective crypto balances.

Prior to this move, any sort of settlement like this would involve Crypto.com wiring fiat currency to Visa at the end of each day in order to settle any processed transactions of that day. This pilot, however, will see Visa using USD Coin (USDC) in order to settle transactions. USDC is a stablecoin pegged 1:1 on the USD, making every USDC worth one USD proper.

Through this action, Visa has chosen the Ethereum blockchain to settle its various transactions and completely removing the fiat part of these crypto settlements. This, in turn, means that Crypto.com will now make use of USDC in order to settle transactions.

Plans To Expand

This new settlement service will allow Visa to significantly speed up the speed at which settlements are made, at the same time significantly decreasing its cost. As it stands now, the exact scope and volume of the pilot program between Visa and Crypto.com is unclear, but Visa made it clear that it plans to extend this offering to other partners, as well.