What is Visa’s Stablecoin Settlement Pilot??
In 2021, Visa initiated testing of the potential applications of USDC within its treasury operations. This testing phase culminated in a pilot project conducted with Crypto.com, marking Visa as one of the pioneering major payment networks to explore stablecoin settlement from the issuer’s perspective. This collaborative effort resulted in a successful pilot, utilizing USDC in conjunction with the Ethereum blockchain for receiving payments from Crypto.com for their card program in Australia, specifically for cross-border transactions. Subsequently, Crypto.com has integrated USDC into its settlement processes for Visa cards in Australia and intends to extend this capability to other markets.
Prior to this pilot program, settling cross-border transactions made with Crypto.com Visa cards involved a lengthy currency conversion process spanning several days and incurred high costs associated with international wire transfers. With the introduction of this new system, Crypto.com can now directly transfer USDC cross-border via the Ethereum blockchain to a Circle-managed account within Visa’s treasury, significantly streamlining the process and reducing the complexity associated with international wire transfers.
Jeremy Allaire, Co-founder and CEO of Circle, expressed enthusiasm about the various use cases of USDC that Visa and its partners are pioneering in the realm of blockchain innovation. He highlighted Circle’s purpose in developing USDC as a functional digital dollar capable of executing secure and reliable payments at internet speed. The expansion of this pilot project serves as a prime example of how the synergy between USDC and Visa’s innovative approaches is shaping the future of payments, commerce, and financial applications.
Adding Support for the Solana Blockchain:
As Visa sought to extend this capability to additional clients, there has been a substantial demand for the adoption of more advanced and efficient blockchain technologies that can facilitate the transfer of stablecoins at increased speeds and reduced costs. Consequently, Visa has made the strategic decision to incorporate support for Solana, a high-performance blockchain, into its offerings. This allows Visa’s partners the option to utilize Solana for sending or receiving USDC settlement payments. With this move, Visa positions itself as one of the pioneering major payment companies to employ Solana for real-time settlement transactions among its clients.
The Solana blockchain boasts impressive features, including 400-millisecond block times, an average of 400 transactions per second (TPS), and the capacity to exceed 2,000 TPS across various use cases during periods of high demand.
Why is this such a big deal?:
Visa (NYSE: V) stands as a global frontrunner in the realm of digital payments. Our core purpose revolves around facilitating transactions among consumers, merchants, financial institutions, and government bodies across a vast expanse of over 200 countries and territories. Our overarching mission is to foster a world that is interconnected through the most cutting-edge, user-friendly, dependable, and secure payments network. In doing so, we empower individuals, enterprises, and entire economies to flourish.
Visa firmly hold the belief that inclusive economies, embracing individuals from all corners of the globe, bring prosperity to everyone universally. We perceive inclusivity as a fundamental pillar in shaping the future of monetary transactions, ensuring that access remains a cornerstone in the movement of money.
Conclusion:
This is exciting news for not just Solana but also Visa: The Solana Blockchain will benefit massively from Visa’s system as such a big payment player dealing with a high volume of transaction, it will drive demand for Solana and TPS which is good and also establish (if successful) Solana as a institutional grade blockchain. Visa will benefit from this partnership as stablecoins become more and more utilized and used with the help of Solana and Ethereum they will be in key position to take a good market share. Its a hole other avenue for VISA to expand its business into and make a revenue from. Good news all around for traditional finance and blockchain
