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Visa to Start Accepting Cryptocurrency Payments in Its Network

By Eric Volkman - Mar 29, 2021 at 7:28PM

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The payment card giant has selected USD Coin as the initial "crypto" for the initiative.

Cryptocurrencies received a fresh shot of legitimacy Monday, on the announcement that Visa (V 3.03%) will start accepting them for payment settlements in its network. Specifically, Visa will allow for payments with USD Coin (USDC -0.02%) through the Ethereum blockchain.

USD Coin is a so-called "stablecoin," meaning a cryptocurrency pegged to a more traditional financial asset -- in this case, the value of the U.S. dollar. Bitcoin, by far the most popular cryptocurrency, is nevertheless not a stablecoin.

Woman holding a smartphone and payment card in separate hands.

Image source: Getty Images.

Visa's move feeds into its "network of networks" strategy, its ambition to accept a wide variety of monetary sources -- digital included -- for payments within its ecosystem. 

"Visa's standard settlement process requires partners to settle in a traditional fiat currency, which can add cost and complexity for businesses built with digital currencies," the company explained in its press release trumpeting the cryptocurrency move.

"The ability to settle in USDC can ultimately help Crypto.com and other crypto native companies evaluate fundamentally new business models without the need for traditional fiat in their treasury and settlement workflows," it added.

Like other companies in Big Finance, Visa is stepping lively to keep up with the ever-accelerating pace of consumers' relationship to money. It has been heavily involved in digital payment solutions; at this point, given the popularity of cryptocurrencies, it can't avoid plunging more deeply into that segment too.

This momentum will continue. Visa said that it will leverage the USD Coin arrangement to eventually support central bank digital currencies. As the name implies, these are cryptocurrencies developed and distributed by national central banks.

On Monday, Visa stock slightly outpaced the generally flat performance of the S&P 500 index, closing up by nearly 0.5%.

 

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