Bitcoin and other cryptocurrencies have perhaps been the story of the world of finance in 2020, mainly due to the staggering rise in Bitcoin’s price, as well as the increasing number of payment providers and services that are beginning to accept cryptocurrencies, helping to bring them into everyday life for millions of new customers and potential partners. Digital currencies are poised to be the future of this space, and we are bound to see many traditional finance operators begin to accept and embrace this as time passes.
One such operator, the credit card giant Visa, recently announced that it will be connecting its global payments network to the US Dollar Coin (USDC), which is a digital coin developed on the Ethereum blockchain by Circle Internet Financial. This currency is now valued at nearly $3 billion, while Visa’s payment network has over 60 million merchants globally, which could increase the value of the coin by a huge rate, given just how many of them will be using any form of digital currency for the first time, thereby having a huge potential rate of growth. Visa itself will not be the custodian for the currency, but in partnership with Circle, it will soon begin identifying Visa credit card issuers to start integrating the USDC software into their payment platforms, and therefore start to process payments using the currency. Over time, businesses will be able to send payments in USDC to any business or merchant globally which is supported by Visa, and once those tokens are converted to the domestic currency, they can then be spent at any merchant which accepts Visa.
Circle is also part of Visa’s Fast Track program, following which Visa will issue a credit card which will allow business users to be able to send and receive payments in USDC directly by using the card. This is just one of Visa’s recent investments and forays into the crypto space. It had invested $40 million in a cryptocurrency startup recently, while it also applied for a patent for an application that could mint traditional currency on a blockchain network, and it is also working directly with a number of central banks towards their own digital currency launch efforts. All of this shows that Visa believes digital currencies will play a huge part in the future of payments and monetary systems.
As for Ethereum, it has quickly become the second-largest cryptocurrency in the world after Bitcoin, while it is also highly in demand for the underlying blockchain network. It is seeing a lot of use and application in various online sectors, including gambling, where many casino operators are offering ethereum slot games and other similar options for players to attract them, which has been quite successful due to the buzz around cryptocurrencies in the last year. The applications of the underlying blockchain have also led to ETH being popular with various other sectors which are looking into blockchain-based solutions.Visa has already brought 25 cryptocurrency wallet providers onto its Fast Track platform, and all of them will be able to pilot the integration with USDC. The company believes that since USDC will be settled almost instantly on the ethereum blockchain, transaction costs will be virtually zero, while traditional wire transfers can cost up to $50, regardless of transaction size, and so the coin will bring a lot of value for many merchants all over the world. Visa believes itself to be a network of networks, and so it is working towards making sure that the integration of all these various types of currencies and payment systems is proper, and also flows through Visa, giving it the necessary revenue and market share in this nascent but extremely attractive industry.