Visa Inc. plans to allow for the settlement of transactions in USD Coin, a stablecoin backed by the U.S. dollar, in what the company says is a move intended to make the platform more accessible to cryptocurrency platforms and wallets.
While the payments giant doesn’t directly allow merchants to accept cryptocurrencies like bitcoin, it works with crypto wallets and platforms that issue Visa V, +0.46% cards letting customers spend their crypto holdings. Visa’s new stablecoin pilot program will make it so cryptocurrency platforms don’t have to convert digital currencies into traditional fiat currencies before settling transactions with Visa.
For crypto platforms, that process of converting digital assets to traditional currencies can add “cost, time and complexity,” Visa said in a blog post. Many of the platforms “pay their employees in digital currencies,” store their balances that way, and don’t necessarily want to maintain traditional bank accounts for the purpose of settling transactions with Visa, the company’s crypto head Cuy Sheffield told MarketWatch.
Visa piloted its USD Coin stablecoin program with Crypto.com and plans to bring the capability, which happens over the Ethereum blockchain, to other partners later this year. The company chose USDC based on demand from crypto partners, stability in the price, and the security of its protocols, but Sheffield said that the infrastructure Visa built to support these capabilities will be flexible and ultimately enable Visa to support central bank digital currencies as well.
“The biggest takeaway is that Visa is open for business for crypto partners,” Sheffield said. “We’re committed to making the network more accessible and easier for them to use.”
Mainstream financial services companies have taken somewhat different approaches in their embrace of cryptocurrencies, with Mastercard Inc. MA, -0.88% announcing last month that it plans to let merchants accept some digital currencies directly, though the company plans to be selective about which it enables.
Visa shares are near flat on a three-month basis, as the Dow Jones Industrial Average DJIA, +0.30% has risen 9%.