With the direct acceptance of payments in USD Coin, Visa forges new connections between digital and traditional currencies.
Mar 29, 2021
When Dee Hock founded Visa, he envisioned creating the world’s premier system for the exchange of value. In today’s world, that means adapting the Visa network to accommodate new form factors for money. With this in mind, today we proudly shared some historic news about our digital currency efforts: the first transactions settled with Visa in USD Coin (USDC), a regulated stable coin backed by the US dollar and transacted over the Ethereum blockchain. For the crypto-enthusiasts and payment experts among us, the significance of this news may be apparent—but for everyone else, we wanted to take a moment to explain what we’ve done, how we got here, and why we think it’s so significant.
But first, what is a ‘settlement transaction?’ Think of ‘settlement’ as the unsung hero of the payment lifecycle. As cardholders, we all know that magical moment of ‘authorization’: you tap your Visa card at the coffee shop and regardless of currency, continent, or time zone, your payment is accepted! But how does the money for your cappuccino actually leave your account and find its way to the bank account of your local coffee shop? That’s the settlement process at work, and Visa sits at the center—making sure that at the end of the day, all those coffees and cappuccinos, for everyone everywhere, are totaled up, converted into the appropriate currency, and sent to the appropriate merchant bank, who in turn deposit funds to the bank accounts of coffee shop owners across the world.
Billions of dollars are cleared and settled each day with Visa’s settlement service — securely, reliably, and predictably. While it operates behind the scenes, it’s a system that has served the traditional financial sector—and everyday consumers and business owners—for decades. But what about fintechs and neo-banks that run their business in digital currencies like Bitcoin, Ethereum, or USDC? Take Crypto.com for example, the largest provider of crypto payment and trading services.
“Crypto.com wants to enable millions of consumers across the world to access and use digital currencies,” says Kris Marszalek, CEO and Co-founder at Crypto.com. “We believe in the power of this technology to move money efficiently for our customers, which is why we have built our own business and treasury infrastructure on top of digital currencies. Partners like Visa who have the capability to directly accept and interact with digital currencies help enable us to maximize the benefits of digital currencies.”