In a groundbreaking move, Visa announced it will allow transactions on its payment network to be settled using USD Coin (USDC), a cryptocurrency pegged to the U.S. dollar. According to a Reuters exclusive, Crypto.com (CRO) has already partnered with Visa to pilot this initiative.
How Visa’s USDC Integration Works
Previously, crypto spending via platforms like Crypto.com required conversion to fiat currency (e.g., USD) before settlement with Visa—a process involving banks and additional fees. The new system bypasses traditional banking by using the Ethereum blockchain for direct USDC settlements.
Key steps:
- Crypto.com transfers USDC to Visa’s Ethereum address.
- Transactions are settled instantly via Ethereum smart contracts.
- Visa collaborates with Anchorage Digital, a federally chartered crypto bank, to custody funds securely.
This shift signals growing institutional adoption of stablecoins and blockchain-based finance.
Market Impact: Bitcoin Rises to $58,000
Following the announcement, Bitcoin (BTC) surged to $58,000, reflecting bullish sentiment around crypto’s integration into mainstream payment systems.
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Expert Insights: USDC’s Rising Influence
Anderson, founder of Dapp Pocket and Cappu, notes:
"USDC is issued across multiple blockchains (Ethereum, Solana, Algorand, Stellar), but Ethereum’s high gas fees may limit scalability. Visa’s acceptance of USDC as a settlement currency legitimizes it in traditional finance, likely encouraging more banks to follow."
USDC vs. USDT: The Stablecoin Gap
Despite being the second-largest stablecoin by market cap, USDC trails Tether (USDT) significantly in:
- Market dominance: USDT holds ~60% of stablecoin circulation.
- Trading volume: USDT accounts for ~80% of daily stablecoin transactions.
| Metric | USDC | USDT |
|-----------------|------------|------------|
| Market Cap | ~$25B | ~$80B |
| Daily Volume | ~$5B | ~$50B |
FAQs
Q: Why did Visa choose USDC over other stablecoins?
A: USDC’s transparency (regular audits) and regulatory compliance made it a safer choice for institutional use.
Q: Will this reduce transaction fees for crypto payments?
A: Yes, by eliminating intermediary banks, but Ethereum’s gas fees remain a variable cost.
Q: Could other stablecoins like USDT be added later?
A: Visa hasn’t ruled out expanding support, but USDC’s compliance framework sets a precedent.
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Risk Disclaimer
Cryptocurrency investments are highly volatile and risky. Conduct thorough research and invest only what you can afford to lose.
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