Jason Simon highlights the importance of Visa's acceptance of USDC settlements

By: WebWire

For years, giant payments processor Visa kept away from cryptocurrencies and, in some respects, it still does. However, over the course of the past 12 months, it has shown a willingness to begin to interact with digital currencies in new ways. Visa appears to be gradually moving toward greater integration and its latest endeavor shows how far it has come. The platform is beginning to test transaction settlements using the USDC stablecoin, and FinTech expert Jason Simon explains why this help could revolutionize the cryptocurrency ecosystem.

Visa is now working with Crypto.com in a pilot program that will see certain transactions settled in the Ethereum-based USDC stablecoin. The digital currency, pegged to the US dollar, could eventually become part of Visa's list of payment options and the platform has already completed its first settlement through USDC. Asserts Simon, who is also a cryptocurrency expert, “This move by Visa has a lot of implications for the digital currency industry. Visa is among the largest payment solutions operating globally today and moves billions of dollars every day across more than 200 markets and 160 currencies. A major financial entity showing support for digital currency as a fiat alternative is bound to generate more excitement.”

Crypto.com offers a Visa card program and will now be able to settle parts of its financial obligations in USDC. The pilot is being facilitated by Anchorage, an exclusive Visa digital currency settlement partner and the first of its kind to be awarded a federal charter. This new ability to settle in the stablecoin will ultimately allow Crypto.com, and other similar companies, to evaluate new business models that don't rely on traditional fiat for settlement workflows. Visa's treasury upgrades and integration with Anchorage will also enhance Visa's ability to directly interact with the entire digital currency ecosystem.

USDC is a stablecoin that was developed by Circle Internet Financial. There is currently $11 billion worth in circulation and it has already been used to settle a number of transactions, including cross-border B2B payments, trade settlements, remittances and more. Its low cost, compared to fiat settlements, and fast transaction times make it an ideal alternative to conventional payment methods.

Adds Simon, “Visa and Circle began working on a partnership last December to explore new ways the stablecoin could be used. The idea behind that partnership was to, eventually, introduce a new Circle Visa corporate card that would allow Circle business customers to make purchases with USDC in lieu of fiat anywhere Visa is accepted. With USDC backed by the nonprofit Center Consortium, founded by Circle and Coinbase, it has a lot of global strength to allow it succeed.”

Ultimately, the incorporation of the USDC could lead to the inclusion of other digital currencies, but most likely those of only a certain type. Specifically, Visa is reportedly considering the integration of central bank digital currencies (CBDC) into its platform, although these have been the source of some debate. At the root is the concern that government-controlled digital currencies do not serve the same purpose as other cryptocurrencies, such as Bitcoin.

The USDC is a stablecoin that is pegged to a government-backed currency, but a CBDC is completely different. It is a digital currency that is created, administered and managed just like all other traditional currencies, which is what the original Bitcoin concept was trying to avoid. Explains Simon, “The idea of Bitcoin was to take control of money out of the hands of governments and put it into the hands of the population. CBDCs do not follow this mantra, but their role in finance cannot be ignored. Over 80% of central banks are now in some stage of CBDC development and, within a few years, these will undoubtedly have a legitimate presence alongside fiat.”

About Jason Simon

Jason Simon is a FinTech and digital payments expert who became involved in cryptocurrencies when they were first introduced.  He enthusiastically follows what is happening in the evolving world of finance, excited about the prospects digital currencies offer global consumerism. When he's not involved in helping advance the digital payments space, he enjoys spending time with his family and improving his community.

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