Visa’s partners can now exchange USDC over the payment network to clear the transactions that are made in fiat currency. The major credit provider is piloting a program that will enable partners to use the Ethereum (ETH) blockchain to settle a transaction that is made in fiat.
In a March 29, 2021 announcement, Visa confirmed that it would partner with Crypto.com, a cryptocurrency exchange platform, and the card issuer, to provide a crypto settlement system for fiat transactions later in 2021. Visa’s partners will allegedly have the capacity and ability to exchange USD Coin (USDC) over the payment network to clear fiat transactions.
Based on the announcement by Visa, its standard settlement procedure needs the partners to send fiat currency through wire transfer, which can introduce new costs and complexity for businesses built using digital currencies.
This pilot project will enable Crypto.com to send USDC to Visa’s Ethereum address to settle some of the transactions under the crypto exchange’s Visa card program by integrating Visa’s treasury with Anchorage digital asset platform.
“Crypto-native fintechs want partners who understand their business and the complexities of digital currency form factors,” said Visa chief product officer Jack Forestell. “The announcement today marks a major milestone in our ability to address the needs of fintechs managing their business in a stablecoin or cryptocurrency.”
The company said that it wants to make this system available to Fintech firms and neobanks that deal in cryptos like Ether (ETH), Bitcoin (BTC), and USDC. Visa reports billions of dollars in fiat are involved in settling and clearing transactions daily.
Crypto.com unveiled the partnership with Visa earlier in March in which the crypto exchange would join the Visa network and expand the coverage of its crypto debit card. At that time, the company announced that it would be rolling out a fiat lending program to enable cardholders to use their cryptos as collateral for fiat loans; funds that the users could spend in merchant platforms that support Visa payments.