Cryptocurrencies are increasingly finding their way into daily payment transactions. As one of the largest service providers for money transfers, Visa now also accepts payments directly with a USD Coin (USDC) stablecoin.
The company is thus expanding its position as an innovator in digital payments. In the future, other stablecoins will be supported as well. Still, the focus here is also on the acceptance of Central Bank Digital Currencies (CBDC).
In addition to Visa, Mastercard has also announced that it will integrate digital currencies into the payment process. Above all, regulations and statutory provisions play an important role.
Visa Uses USD Coin for Transactions
For many people, digital currencies are particularly considered to be financial investments and speculative assets. However, the use of cryptocurrencies for payment itself is also becoming increasingly important. With the integration of USD Coin into the Visa network, the company marks another milestone.
Visa’s global transaction service is worth billions of dollars. This makes the company one of the leading payment service providers and plays an important role in international money transfer.
So far, users have only been able to make payments in cryptocurrencies via the Crypto.com provider. With a Visa card, customers can use digital currencies to make their daily purchases. Until now, however, these had to be converted into a currency supported by Visa. This process requires more effort and is associated with additional costs.
By using USD Coin, this intermediate step is omitted, which means that customers can use their cryptocurrencies more effectively for payments.
Crypto.com provider is one of the best-known trading platforms for cryptocurrencies. Through cooperation with Visa, customers of the platform can also use their digital currencies for daily payments made with a credit card.
Visa also announced that they would like to integrate central bank digital currencies into their system in the future. These represent an official national currency in digital form and are currently under development.
How Does USD Coin (USDC) Work?
USD Coin cryptocurrency is a digital form of the US dollar. As a result, the currency is subject to only minor exchange rate fluctuations and is ideal as a store of value and means of payment.
The US dollar plays an important role, especially in countries with a weak national currency. It’s accepted worldwide and represents one of the leading currencies. The digital form facilitates access and reduces costs. You don’t need a bank account to use it, but a suitable wallet on your computer or smartphone. Hardware wallets are suitable for long-term storage, as they ensure greater security.
The Ethereum blockchain represents is the basis of USDC. It’s one of the largest blockchains, which currently processes almost 1.5 million transactions per day. It’s also considered very secure, which makes it the perfect basis for decentralized apps and currencies.
In addition, USDC meets the necessary legal conditions to be considered a secure means of payment in the Visa network. The coin is issued by the Venture Center, which resulted from a cooperation between Circle and Coinbase.
Visa Accepts USD Coin: Who’s Next?
In addition to Mastercard and PayPal, Visa is one of the companies that use digital currencies for money transfer. This is an important step towards gradually integrating them into daily use. It’s therefore very likely that more and more companies will take similar steps to modernize their business processes.
So far, the focus has been on well-known stablecoins such as USD Coin and USD Tether. However, these could be replaced by official national currencies in digital form in the future. So far, the Bahamas are considered the first country to use an official CBDC. China is also still in the test phase with its pilot project of the digital yuan. The European Central Bank has already spoken several times about the possible introduction of the digital euro. Accordingly, these are under development and the ECB is considering introducing them in the future.
Mass adoption could also have a positive effect on prices of cryptocurrencies and digital assets. So far, the market cap of all cryptocurrencies is around $2.4 trillion. This roughly corresponds to the value of the Apple company.