In the past few months, both Mastercard and Visa have stated that they’ll be adopting cryptocurrencies and blockchain technologies. The two of the most powerful payment processing companies have been warming up to the potential of virtual currencies. Now Visa has partnered with Crypto.com – one of the most popular crypto debit card providers – for offering a Visa debit card that doesn’t convert crypto to fiat. Instead, it supports USDC, which is a stablecoin whose value is pegged to the US Dollar.
Visa told Reuters that this partnership is a pilot project, and it’ll be adding more partners beyond Crypto.com later this year. The dominant virtual currency Bitcoin jumped almost 5 percent after this news reaching a one-week high of more than $58,000.
Wondering how does the partnership work, considering that crypto debit cards are already out there? Well, in its current implementation, the cryptocurrency held in the wallet connected to the debit card, is converted to the traditional currency when a customer purchases a product or service. The fiat currency is deposited to a bank account, and is sent to Visa at the end of the day. As you could see, this adds costs, not to mention, makes it more complex too.
With this partnership, there won’t be any need to convert digital currency into the traditional one. That’s because, the transactions are settled by converting the cryptocurrency to USDC. Visa partnered with digital asset bank Anchorage for completing the first transaction.
Worth noting that USDC or USD Coin is a stablecoin from Coinbase and Circle. Powered by the Ethereum token, it has a circulating supply of over $10 billion. As the name suggests, each USDC can be redeemed for the US $1.00 by its holders.
Visa’s latest move shows that more and more traditional companies are embracing cryptocurrencies. The company also mentions that this step also ensures that Visa is ready to support CBDC (Central Bank Digital Currency) as and when they are introduced.