The price of Bitcoin and Ethereum, the most important cryptocurrencies, rose on Tuesday after Visa announced that it will allow settling transactions with the Ethereum USD Coin stablecoin, making it possible for the first time to issue cryptocurrency-denominated cards and perform transactions without switching to traditional currency.
Crypto.com, a cryptocurrency deposit and exchange platform, will be the first company to issue USD Coin-denominated Visa cards in pilot mode.
USD Coin, like all stablecoins, uses blockchain technology, but is not exposed to the ups and downs of a regular cryptocurrency and is always one-to-one equivalent to the US dollar.
USD Coin, managed by Centre, was created by Circle and Coinbase, one of the biggest players in the cryptocurrency ecosystem and preparing for an early IPO, and maintains a system of accounts with real dollar deposit that must be equal to the cryptocurrency units in circulation.
This agreement with Visa to add USD Coin to its portfolio of 160 traditional currencies will allow its customers to trade without exchanges to fiat currency, without the need for a bank account and, for the first time, under the decentralized blockchain system.
Visa Payments Using Cryptocurrency
“The acceptance of digital currency as a new type of settlement currency marks an important step forward for the Visa network and its strategy, which is designed to strengthen all forms of money movement,” Visa said in a statement.
For Jack Forestell, head of product at Visa, this milestone is of great importance to “respond to the needs of fintechs that need to manage their stablecoin or cryptocurrency business.”
The step taken by Visa also comes thanks to the partnership agreement established with Anchorage, which recently received federal approval in the United States to operate as the first digital asset bank.