- Visa partners with crypto exchange and card issuer platform, Crypto.com to launch the first fiat/crypto transaction settlement system.
- Visa expects to achieve significant savings from the billions of dollars currently spent in clearing & settlement of fiat transactions.
- If the pilot is successful, Visa aims to offer this as a major service to fintechs and neobanks in the future.
According to an announcement earlier this week, Visa shared its plans to conduct the first crypto/fiat settlement transaction over ETH via the popular stablecoin, USD Coin. This marks a huge moment in the adoption roadmap for cryptocurrencies in use for financial operations among major institutions.
Visa Partners with Cryptocurrency Exchange and Card Issuer Crypto.com
This exclusive settlement facility will only be available to Visa’s Partners, who will now be able to exchange the popular stablecoin USDC over Crypto.com’s payment network to clear transactions conducted in fiat currency. The launch of this new settlement system comes as a result of Visa’s partnership with cryptocurrency exchange platform and card issuer Crypto.com.
According to Visa EVP and chief product officer, Jack Forestell, ‘this new facility is simply an extension of the global payment settlement currently in use for various other currencies of the world, and crypto is just another currency to deal with.’
He further added: “The announcement today marks a major milestone in our ability to address the needs of the fintechs who are managing their business in a stablecoin or cryptocurrency, and it’s really an extension of what we do every day, securely facilitating payments in all different currencies all across the world.”
This is certainly going to be a game-changer and, in a way, will serve as an invitation for all crypto-focused merchants as well as payment platforms to engage with Visa more willingly.
Visa’s Ultimate Goal is to Introduce this as a Service for Fintechs and Neobanks
According to Cointelegraph, ‘billions of dollars are spent today for clearing and settling fiat transactions daily.’ The payment giant expects to reduce these costs significantly by using the Ethereum blockchain to settle their fiat transactions.
As per Visa’s current standard operating procedure, partners are required to send fiat by way of wire transfer, which “adds cost and complexity for businesses built with digital currencies.” In contrast, by linking Visa’s treasury with the digital asset platform Anchorage, the proposed pilot program would allow Crypto.com to ‘send USDC to Visa’s Ethereum address’ to settle some transactions under the Visa card program of Crypto.com.
According to Crypto.com CEO, Kris Marszalek:
“Signing the global partnership with Visa and becoming a principal member with the world’s leader in digital payments affirms our commitment to accelerate the world’s transition to cryptocurrency.”
Crypto.com also had intentions of its own on rolling out a new ‘fiat lending program, where the cardholders would be able to use their crypto assets as collateral for fiat loans’ — the user could then use the funds realized from the loan to purchase goods & services within the merchant network that supports Visa payments.