Visa Launches Pilot Program to Settle Transactions Using Ethereum and USDC
Global payment giant Visa is making waves in the cryptocurrency space with the launch of a pilot program that uses the Ethereum blockchain to settle transactions. The initiative, conducted in partnership with Crypto.com and Anchorage, aims to facilitate seamless fiat transactions using the USD Coin (USDC) stablecoin.
This milestone marks a significant step in integrating blockchain technology into mainstream financial systems.
What is Visa’s USDC Pilot Program?
The pilot program allows Visa’s partners, starting with Crypto.com, to settle transactions using USDC, a stablecoin pegged 1:1 to the U.S. dollar.
How It Works
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Transaction Settlement:
- Crypto.com users can transact via their Crypto.com Visa Card.
- Payments are settled in USDC directly on the Ethereum blockchain.
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Role of Anchorage:
- Visa’s pilot program leverages Anchorage, the first federally chartered digital asset bank, to process USDC transactions.
- Crypto.com transferred USDC to Visa’s Ethereum address at Anchorage during the first live transaction earlier this month.
Advantages of Using USDC on Ethereum
Streamlined Process
Previously, transactions required converting crypto to fiat, adding operational costs. With USDC settlement:
- Transactions bypass traditional fiat currency conversions.
- Payments occur directly on the blockchain, enhancing speed and efficiency.
Reduced Costs
The elimination of intermediaries reduces processing fees, benefiting users and partners alike.
Expanding the System to Fintech and Neobanks
Visa plans to extend the USDC settlement system to other fintech companies and neobanks handling cryptocurrencies like BTC, ETH, and USDC.
Crypto.com Integration
- Visa Card Program: Users can acquire a Visa card by staking Crypto.com’s native token (CRO).
- Fiat Lending Program: Users will soon be able to use crypto holdings as collateral for fiat loans, further enhancing Visa’s crypto capabilities.
Significance of Visa’s Blockchain Move
Visa’s pilot program is a milestone for mainstream cryptocurrency adoption, showcasing how blockchain technology can integrate with traditional financial systems.
Industry Impact
- Broader Use Cases: The success of this pilot could encourage more financial institutions to adopt blockchain for payments.
- Increased Crypto Accessibility: Simplified processes may attract new users to cryptocurrency-based payment systems.
Visa’s Commitment to Crypto
This initiative builds on Visa’s ongoing efforts to integrate blockchain technology, following its partnership with Crypto.com to expand crypto debit card offerings and enable seamless digital asset payments.
Conclusion
Visa’s foray into settling transactions with USDC on the Ethereum blockchain represents a pivotal moment for the financial industry. By leveraging stablecoins and blockchain technology, Visa is setting a precedent for how legacy payment systems can embrace digital currencies to enhance efficiency and reduce costs.
As Visa continues to collaborate with fintech firms and expand its crypto offerings, the pilot program highlights the growing convergence of traditional finance and blockchain technology.
To learn more about innovations in the crypto industry, explore our article on latest news, where we cover the most promising ventures and trends shaping the future of finance.
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