Visa Inc has revealed it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network.
Visa has launched the pilot program with payment and crypto platform Cryptodotcom and plans to offer the option to more partners later this year.
The USD Coin (USDC) is a stablecoin cryptocurrency whose value is pegged directly to the U.S. dollar.
Visa’s move comes as major finance firms including BNY Mellon, BlackRock Inc and Mastercard Inc have embraced some digital coins, sparking predictions that cryptocurrencies will become a regular part of investment portfolios.
Tesla Inc boss Elon Musk said last week that customers can buy its electric vehicles with bitcoin, marking a significant step forward for the cryptocurrency’s use in commerce.
Traditionally, if a customer chooses to use a Cryptodotcom Visa card to pay for a coffee, the digital currency held in a cryptocurrency wallet needs to be converted into traditional money.
The cryptocurrency wallet will deposit traditional fiat currency in a bank account, to be wired to Visa at the end of the day to settle any transactions, adding cost and complexity for businesses.
Visa’s latest step, which will use the ethereum blockchain, strips out the need to convert digital coin into traditional money in order for the transaction to be settled.
Visa said it has partnered with digital asset bank Anchorage and completed the first transaction this month — with Cryptodotcom sending USDC to Visa’s Ethereum address at Anchorage.