Visa, a major credit card company, is testing a programme that will enable its partners to settle fiat transactions using the Ethereum (ETH) blockchain. Visa has confirmed that it has approved the first settlement payment in USDC, a cryptocurrency that is 1:1 pegged to the US dollar, from its global crypto wallet partner Crypto.com through the Ethereum blockchain.
Visa's standard settlement mechanism necessitates sending fiat currency through wire transfer, which "can add cost and complexity for businesses built on digital currencies," according to Visa.
The current settlement process allows Visa's business partners to settle transactions in fiat currency that the company agrees, which means that a portion of a partner's crypto treasury assets will have to be converted at an expense.
Visa's partners will soon be able to resolve their commitments with the company directly in USDC, thanks to the update. Coinbase, Crypto.com, BlockFi, and Bitpanda are among the 35 digital currency networks with which the credit card giant has already collaborated. These platforms have a total user base of more than 50 million.
Visa's decision follows the adoption of several digital coins by major financial institutions such as BNY Mellon, BlackRock Inc, and Mastercard Inc, prompting expectations that cryptocurrencies will become a daily part of investment portfolios.
Cuy Sheffield, head of Crypto at Visa said: "Digital currencies have the potential to extend the value of digital payments to a greater number of people and places-and we're eager to work with companies bringing this vision to life. Through our partnership with Crypto.com, one of the largest Visa card programs connected to a crypto exchange available today, we are making it quicker and easier for people to spend digital currency worldwide."