Global payment networks have historically avoided cryptocurrencies, but a recent shift toward stablecoin settlements signals a growing openness in the industry. According to Reuters, Visa—the global payment giant—announced it will now enable cryptocurrency settlements on its network.
Visa’s Crypto Evolution
Visa’s Head of Crypto highlighted increasing consumer demand for digital currency access, emphasizing the company’s commitment to bridging traditional finance with blockchain technology.
Key Developments:
- USDC as the First Settled Cryptocurrency: Visa selected USD Coin (USDC), a stablecoin pegged 1:1 to the U.S. dollar, developed by Circle and Coinbase.
- Pilot Partnership: Collaborating with Crypto.com, Visa plans to expand this settlement option to more partners later this year.
- Ethereum Blockchain Integration: Transactions will now settle directly on Ethereum, reducing the need for crypto-to-fiat conversions.
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Why This Matters
Previously, platforms like Crypto.com had to convert crypto payments to fiat instantly, adding complexity and costs. Visa’s new system streamlines this by leveraging Ethereum’s decentralized infrastructure.
Visa’s Broader Crypto Strategy
Weeks before this announcement, Visa revealed plans to expand into crypto, citing the $1.7 trillion market’s potential. Initiatives include:
- Enabling Bitcoin purchases via Visa credentials.
- Partnering with Bitcoin wallets to facilitate spending at 70 million Visa-accepting merchants.
CEO Al Kelly stated, "We’re making Bitcoin usable as a currency everywhere Visa is accepted."
FAQs
Q: Which stablecoin is Visa using for settlements?
A: Visa’s first choice is USDC (USD Coin), a dollar-pegged stablecoin.
Q: How does Ethereum fit into this?
A: Transactions settle directly on Ethereum, bypassing traditional fiat conversions.
Q: When will this service expand beyond Crypto.com?
A: Visa plans to onboard more partners in late 2023.
Q: Does this mean merchants will accept crypto directly?
A: Not yet—settlements occur off-merchant books, but it’s a step toward broader crypto acceptance.
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The Road Ahead
This move aligns with growing institutional crypto adoption. By reducing friction in crypto settlements, Visa positions itself as a leader in merging decentralized finance (DeFi) with mainstream payment systems.
Key Takeaways:
- Efficiency: Ethereum settlements cut intermediary steps.
- Cost Reduction: Less reliance on fiat conversions lowers operational expenses.
- Market Impact: Signals legitimacy for stablecoins and blockchain-based payments.
As crypto-native users celebrate, the financial landscape continues evolving toward a hybrid digital-traditional ecosystem.
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