Visa announced today that it will allow the use of the cryptocurrency USD Coin (USDC) to settle transactions on its payment network, according to Reuters. Visa currently processes transactions involving cryptocurrencies and fiat currencies by settling the former. This means the cryptocurrency amount sent is converted to fiat currency. This process generates conversion rates and, to prevent this from happening, a partnership has been signed with Crypto.com. Through the partnership, the amounts will be converted into the stablecoin USDC - a cryptocurrency indexed to the US dollar resistant to market fluctuations.
In a test conducted earlier this month, Crypto.com sent a USDC transaction to Visa's Ethereum address. According to the announcement, Visa's use of the Ethereum blockchain eliminates the need to convert digital currencies into traditional cash before the transaction takes place. This model is particularly favorable for companies whose business model is based on cryptocurrencies. Crypto.com said at the same time that it would launch a fiduciary loan program to allow cardholders to use their cryptocurrency holdings as collateral for fiduciary loans - funds that users could spend on commercial platforms that support Visa payments.
The Visa network already has 35 cryptocurrency partner platforms, including in addition to Crypto.com companies like Coinbase, BlockFi and Bitpanda.
