Visa to allow payments using cryptocurrency
Visa Inc. will wade deeper into digital currency waters as it green-lights the use of cryptocurrency to directly settle payments on its network. Visa has partnered with crypto platform Crypto.com in a pilot program to settle some transactions using US dollar-pegged cryptocurrency USD Coin (USDC) on the Ethereum blockchain. The move allows purchases to take place directly in cryptocurrency without any traditional money involved.
Crypto payments to no longer need fiat currency
While Visa already allowed customers to pay with digital coins, the process was costly and complicated. A crypto wallet would send traditional money to a bank account to be wired to Visa at the end of the day to settle the transaction. The new program will scrap the need to convert cryptocurrencies into traditional currency, letting partners pay Visa directly in USDC.
Finance firms embrace crypto as demand blows up
The program comes as mainstream finance firms grow more accepting of digital currencies. Mastercard has said it will allow more merchants to trade in cryptocurrencies on its network, citing unrelenting demand. Further, digital payment firms PayPal and Square already allow Bitcoin on their platforms, while the oldest US bank BNY Mellon has said it would launch banking services for cryptocurrencies and other digital assets.
Tesla leads crypto charge with Musk at helm
In fact, Tesla's Chief Executive Officer Elon Musk has backed the cryptocurrency trend in recent months through tweets and outspoken support. Last week, Musk said customers could buy his company's electric vehicles in exchange for Bitcoins, over a month after Tesla sank $1.5 billion into the cryptocurrency. Musk has also been a prime driver of Dogecoin, a Bitcoin alternative born out of a meme.
Is crypto the new gold?
Notably, cryptocurrencies have garnered traction and piqued the interest of investors as a safe bet amid growing concerns that trillions of freshly-minted dollars during the coronavirus crisis could drive up inflation. Parallels have been drawn between the safe-haven appeal of gold and the rise in cryptocurrencies, both of which can potentially hold on to their value even in times of high inflation.
