March 29, 2021
VISA announced plans to allow cryptocurrency USD Coin (USDC) for settlement transactions on its payment network, according to an exclusive Reuters report. The company revealed that Crypto.com (CRO) is already collaborating with VISA on a pilot program.
Key Developments:
- USDC Integration: VISA will use the Ethereum blockchain to process USDC payments, bypassing traditional fiat conversions.
- Partnership with Crypto.com: Initial transactions involve transferring USDC from Crypto.com to VISA’s Ethereum address via Anchorage Digital Bank.
- Market Impact: Bitcoin rallied to $58,000 following the announcement.
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VISA’s Crypto Strategy
VISA’s Head of Cryptocurrency emphasized growing consumer demand for digital currency access:
"Clients increasingly seek products that bridge digital and traditional finance."
Previously, Crypto.com card transactions required converting crypto to fiat—a process involving banks and fees. The new system eliminates these steps by settling directly on-chain.
Expert Insights
Anderson Chen, founder of Dapp Pocket and Cappu, noted:
- USDC’s Multi-Chain Presence: Available on Ethereum, Solana, Algorand, and Stellar—though Ethereum’s high fees may limit scalability.
- Banking Implications: By accepting USDC, VISA legitimizes stablecoins for traditional finance, potentially inspiring broader institutional adoption.
Stablecoin Market Share:
- USDT dominates trading volume (~75%), while USDC trails (~15%).
FAQs
1. Why did VISA choose USDC over other stablecoins?
VISA prioritizes regulatory compliance and transparency—key strengths of USDC’s audited reserves.
2. How does Ethereum’s congestion affect this partnership?
Scalability solutions (e.g., Layer 2) may address high fees for mass adoption.
3. Will more banks follow VISA’s lead?
Likely—as crypto-fiat bridges gain credibility, institutions face competitive pressure to adapt.