in Articles, Crypto
VISA Introduces Cryptocurrency Payments
by Piyush GRCG June 18, 2021, 2:01 pm 2k Views
The cryptocurrency craze continues. Now Visa has announced that it will allow the use of one of the digital currencies to settle transactions on its payment network.
As Reuters reports, Visa Inc. will allow the use of USD Coin to settle transactions. The company has introduced a pilot program with the Crypto.com platform for now. It also plans to offer this option to more partners later this year. It is worth mentioning here that USDC is a currency that is pegged to the US dollar and has a fairly stable base.
This move is not unexpected: companies BNY Mellon, BlackRock Inc. and MasterCard Inc. are also taking steps to leverage the existence of cryptocurrencies in the context of investments and payments. Cryptocurrencies and digital currencies themselves (the former are decentralized, the latter, on the contrary) are increasingly emerging as normal payment options.
Cryptocurrencies have been in the limelight relatively often lately, although they are not always put in a positive light. Bill Gates recently stated that bitcoin is not good for the environment, because its digging consumes a lot of energy. On the other hand, Tesla, Elon Musk's company, has invested heavily in cryptocurrencies, and with them it will be possible to buy the company's cars.
Visa, an international company dealing with payment technologies, announced that it will allow the use of cryptocurrencies to settle transactions in its payment network. It is a pilot program based on cooperation with Crypto.com, a cryptocurrency payment and exchange platform. The exchange will join the Visa network and expand the reach of its crypto debit card. The first currency available through the Visa Crypto card will be USD Coin, a stable cryptocurrency whose value is directly related to the US dollar. Later this year, Visa plans to expand the service with more partners and, most likely, more digital currencies.
In March, just after the partnership between Visa and Crypto.com was announced, the value of bitcoin reached its highest point in the last months. The price of the most popular cryptocurrency increased by approximately 4.5% to approximately $58,000.
Visa's solutions will reduce costs and simplify transactions
Marcin Wituś, one of the creators of the Polish cryptocurrency exchange Geco.one, which offers its customers transactions in more than 16 cryptocurrencies using Bitcoin, argues that the model chosen by Visa and Crypto.com significantly simplifies cryptocurrency payments.
Traditionally, the digital currency must be converted into money regarded as a means of payment at a given bank. This can dramatically increase costs and complicate things for businesses or individual customers with bitcoins in their account. Visa's latest move to leverage ethereum blockchain technology removes the need to convert digital currencies into traditional money for transaction settlement. It is conceivable that this will make it cost-effective to pay for everyday activities, such as paying for purchases.
Visa also announced that it has partnered with digital asset bank Anchorage and has already completed its first USD coin transaction, which took place between Crypto.com and an Anchorage Visa Ethereum account.
The payment card provider announces that it intends to make its system available to fintech and neobanks dealing with cryptocurrencies. This is not the end of the conveniences, as Crypto.com also ensures that it will introduce a fiat lending program to allow cardholders to use their crypto assets as security for traditional financial instruments.
Competition breeds progress
The cooperation with Crypto.com is another signal sent by Visa that it is serious about the future of cryptocurrencies as a means of payment.
Visa's decision came as other major financial companies such as BNY Mellon, BlackRock and Mastercard incorporated digital currencies into their wallets. For Visa, it was a clear signal that cryptocurrencies are an inherent part of the investment portfolio and there is nothing to expect, although the company was not inactive in the previous months.
In late March, Al Kelly, CEO of Visa, said that his company plans to allow direct Bitcoin purchases. Earlier, in February 2021, Visa announced a partnership with First Boulevard, a digital neobank focused on generating generational wealth for the African-American community.
Musk sounds but others are working too
Mastercard announced earlier this year that it will accept Bitcoin and other cryptocurrency assets in 2021. The company has not yet announced exactly which digital currencies are up for grabs. The criteria that will be taken into account will be the level of consumer protection, ensuring consumer privacy and security, compliance with local laws and regulations, and exchange rate stability. Mastercard has been operating in the cryptocurrency market for many years. The company has 89 patents related to blockchain technology. Soon, it may expand them with another nearly 300 solutions.
However, there is no denying that Elon Musk has recently made the biggest stir around cryptocurrencies. First, in February, he reported on Twitter that Tesla had bought $1.5 billion worth of Bitcoin on exchanges, and in March he announced that cars from his factories would be payable with cryptocurrencies. Immediately following this statement, General Motors, another auto industry giant, announced that it was considering making payments in digital currencies available to its customers. Following Musk's decisions, the value of bitcoin on virtual exchanges soared by a total of approximately 20%.
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Written by Piyush GRCG
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