Mar 29, 2021 (Baystreet.ca via COMTEX) -- Credit card giant Visa /zigman2/quotes/203660239/composite V -1.22% is allowing the use of cryptocurrencies to settle transactions on its payment network.
In yet another sign of the growing acceptance of digital currencies by mainstream financial institutions, Visa has launched a pilot program with payment and crypto platform Crypto.com to allow individuals and businesses to use the cryptocurrency "USD Coin" to settle transactions.
USD Coin (USDC) is a stable coin cryptocurrency whose value is pegged directly to the U.S. dollar. Visa's move comes as major financial firms such as BNY Mellon /zigman2/quotes/200171276/composite BK +1.90% , BlackRock /zigman2/quotes/207946232/composite BLK +1.74% and Mastercard /zigman2/quotes/207581792/composite MA -1.80% have embraced some digital coins, sparking predictions that cryptocurrencies will become a regular part of investment portfolios moving forward.
Tesla last week announced that customers can buy its electric vehicles with Bitcoin, marking a significant step forward for that cryptocurrency's use in commercial transactions.
Traditionally, if a customer chooses to use a Crypto.com Visa card to pay for a coffee, the digital currency held in a cryptocurrency wallet needs to be converted into traditional money. The cryptocurrency wallet will deposit traditional fiat currency in a bank account, to be wired to Visa at the end of the day to settle any transactions, adding cost and complexity for businesses.
Visa's latest step, which will use the Ethereum blockchain, strips out the need to convert digital coin into traditional money in order for the transaction to be settled. Visa said it has partnered with digital asset bank Anchorage and completed the first successful transaction earlier in March -- with Crypto.com sending USDC to Visa's Ethereum address at Anchorage.
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