Visa has processed a cryptocurrency payment directly on the Ethereum blockchain as part of a new service that the payment giant plans to introduce to its partners later this year.
The move, the latest sign of increased adoption of digital currencies by the old-guard financial industry, bumped the price of bitcoin and ether roughly 5% each. In recent trading, BTC was at $58,018.80, up 3.14% in the last 24 hours.
Per a press release shared with CoinDesk, Crypto.com sent a USDC stablecoin transaction to an account at Anchorage custody under Visa’s name. Crypto.com issues “crypto-backed” Visa cards which allow its users to spend the coins in their Crypto.com wallet.
United States Dollar Coin, or USDC, is a so-called “stablecoin” or “crypto dollar” which is pegged 1-to-1 with dollars and is the second largest crypto dollar with an $11 billion capitalization.
Usually, Crypto.com has to sell cryptocurrencies for to cover its obligations to Visa in cash, but this new program will allow the company to pay in USDC going forward. The pilot could be a bellwether for mainstream acceptance of crypto-native payment methods, as it marks the first time Visa has accepted a cryptocurrency payment in lieu of cash for its services.
“Crypto-native fintechs want partners who understand their business and the complexities of digital currency form factors,” Visa Chief Product Officer Jack Forestell said in the press release. “The announcement today marks a major milestone in our ability to address the needs of fintechs managing their business in a stablecoin or cryptocurrency, and it’s really an extension of what we do every day, securely facilitating payments in all different currencies all across the world.”
Visa goes in on bitcoin, crypto
Of the credit card giants, Visa has been pushing the most aggressively into crypto.
The payment network’s fast-track program has furnished dozens of crypto companies with resources and Visa cards. In addition to Crypto.com, crypto companies BlockFi, Fold, Bitpanda and others have Visa cards with bitcoin-back rewards. One upstart called Moon allows its users to buy prepaid digital cards with Bitcoin’s Lightning network to use at any Visa-accepting online merchant.
Visa’s USDC settlement with Crypto.com comes almost two months after news surfaced that the payments company is building out APIs for banks and financial institutions to buy and sell cryptocurrencies for their clients using Visa’s network and Anchorage’s custodial services.
Going forward, Visa plans to flesh out its crypto-native services by “support[ing] reconciliation and currency conversion for stablecoins such as USDC” and creating “settlement reports” with blockchain wallet addresses to verify transactions.
Visa also said in the press release that Anchorage will be “Visa’s digital asset settlement agent” and that it will “integrate [its] treasury systems with Anchorage.”
“After further testing and additional conversations with clients, partners and members of the regulatory community, we hope to launch this capability for other partners in the year ahead,” Visa said in a blog post about the news.
UPDATED (March 29, 09:58 UTC): Updates with price of bitcoin moving on the news.