Visa announced today, Monday (29), that it will begin accepting USD Coin (USDC) on transactions made on the Ethereum blockchain. Thus, the chain becomes the first large chain to settle transactions made under the brand banner.
Kris Marszalek, co-founder, and CEO of Crypto.com stated:
USDC settlement is expected to be available to other partners later this year.
Use of cryptocurrencies
The announcement made by Visa could set precedents to further expand the use of cryptocurrencies in the market, in the opinion of David Puth, CEO of Center, the company responsible for overseeing USDC licensing.
“Having USDC on the Visa network is an incredible next step in our mission to connect the world using stablecoins created with Center standards, starting with USDC,” he says, in an official announcement.
To clarify: stablecoins are currencies that have a stable value. Unlike bitcoin, which is highly volatile and can appreciate (or devalue) before the market overnight, stablecoins are commonly linked to other strong and more stable assets, such as the US dollar, the euro, and even gold.
Traditional currencies, in turn, are called fiat currency, or fiat currencies. These are issued by a central body responsible for each country.
For Visa, as a business strategy, accepting USDC is not only a competitive advantage, but is in line with the company’s discourse of becoming “the network of networks”, in favor of promoting solutions that bring improvements to all types. movement of funds, inside or outside your payment ecosystem.
Jack Forestell, Visa Vice President and Chief Product Officer, said:
Last year, the company focused its efforts on creating an internal infrastructure that could enable the settlement of digital currencies.
The ecosystem currently led by Visa moves billions of dollars daily in more than 200 markets and 160 different currencies.
It was thus, in this journey, that the company closed the partnership with Crypto.com, and also with Anchorage, the first digital assets bank licensed by the federal government and the company’s exclusive partner in the digital currency settlement space, resulting in the project- pilot to receive USDC from Crypto.com and be able to settle a portion of its obligations related to the Crypto.com Visa card program.
According to Visa’s explanation, the standard settlement process requires partners to settle in traditional fiat currency, which adds costs and complexity to the processes of companies that operate with digital currencies.
With the ability to settle in USDC, Crypto.com and other crypto-active companies can evaluate fundamentally new business models, as well as settlement workflows without the need to have fiat money in their treasury.
USDC vs. stablecoins
The market for stablecoins, or stable cryptocurrencies, is relatively competitive.
One of the ways that the USDC has to stand out against other currencies in the same category is concerning transparency. According to CoinMarketCap, the coin offers users “the assurance that they can withdraw 1 USDC and receive US$1 in return without any problem”.
The main challenge for the consortium behind the currency is, in fact, to ensure that the value they have in cash corresponds to the number of tokens in circulation so that this promised security can always be fulfilled.
The cryptocurrency is in 12th position among the main ones in the ranking, with a market value of US$10.72 billion. Bitcoin remains sovereign on the list of top virtual currencies, with a market value of US$1 trillion.