Credit and debit card company Visa Inc. announced on Monday that it will allow the use of USD Coin, a stablecoin whose value is pegged to the U.S. dollar, to settle transactions on the Ethereum blockchain.
The move is a first among major payments networks and the latest sign that digital currencies are gaining acceptance by the mainstream financial industry.
Visa is piloting the program with Crypto.com, a payment and crypto platform, to bridge the worlds of digital and traditional fiat currencies, and plans to offer the USDC settlement capability to additional partners later this year, according to a press release.
The price of Bitcoin, the most popular cryptocurrency, rose to a one-week high on the news and was trading at $58,874.27 as of this writing, closing in on a record-high above $61,000 reached earlier this month.
Tesla CEO Elon Musk, a fan of cryptocurrencies, said customers can buy electric vehicles with bitcoin.
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Traditionally, when a customer uses a Crypto.com Visa card, the digital currency held in a cryptocurrency wallet has to be converted into traditional money. The crypto 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.
By allowing payment settlements on the Ethereum blockchain, Visa cuts out the need to convert digital coin into traditional money.
“We see increasing demand from consumers across the world to be able to access, hold and use digital currencies and we’re seeing demand from our clients to be able to build products that provide that access for consumers,” said Cuy Sheffield, head of crypto at Visa, in a Reuters report.