Visa Wants to Settle Transactions in Cryptocurrencies… Are Dollars on the Way Out?

Well, this is getting interesting.

Visa Inc said on Monday it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network, the latest sign of growing acceptance of digital currencies by the mainstream financial industry.

Visa has launched the pilot program with payment and crypto platform and plans to offer the option to more partners later this year, it said.

The USD Coin (USDC) is a stablecoin cryptocurrency whose value is pegged directly to the U.S. dollar. This isn’t quite settling transactions in volatile bitcoin yet, but it’s a step in that direction.  If more people choose to hold cryptocurrencies instead of dollars, euros, and yen, it could strain national and global financial markets.

Visa’s move comes as major financial firms including BNY Mellon, BlackRock Inc and Mastercard Inc have embraced some digital coins, sparking predictions that cryptocurrencies will become a regular part of investment portfolios.

Cuy Sheffield, head of crypto at Visa, said:

“We see increasing demand from consumers across the world to be able to access, hold and use digital currencies and we’re seeing demand from our clients to be able to build products that provide that access for consumers.”

Traditionally, if a customer chooses to use a 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 coins 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 transaction this month — with sending USDC to Visa’s Ethereum address at Anchorage.

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  1. Elizabeth Sheets

    Why is it necessary to get ride of the U.S. Dollar? Many people are not used to using anything but the money (U.S. Dollar). I think changing to digital is just a way to reduce having to pay people who have jobs in these industries. When Americans need jobs because of the way the Biden Administration wiped out jobs with a stroke of a pen signing E.O., I think Visa should rethink things. It’s just another way to keep people from communicating with each other face to face.

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