Dollars Gone Digital: Visa Leads Fintech Integration with Crypto.com
By Nathan Frankovitz
Major news outlets started this week off with headlines reporting Visa’s new pilot program with Crypto.com. According to Yahoo Finance, Crypto.com has traditionally sold crypto assets to settle its obligations with Visa. Instead, the 10m+ user exchange will now be able to pay directly with USDC. In yet another milestone bridging the old world of finance with blockchain protocols, Visa told Reuters that it “plans to offer the option to more partners later this year.”
Known as a “stablecoin”, USDC (USD Coin) is redeemable at a 1:1 rate for US dollars. Built on standards governed by Centre, a “membership-based consortium that sets technical, policy and financial standards for stablecoins,” USDC is fully backed by reserve assets and is issued by a variety of regulated financial institutions. By digitizing the dollar through blockchain technology, USDC offers greater transactability and smart contract functionality than its cash predecessor.
Meanwhile, China, Japan, and numerous other countries are piloting their own “stablecoins,” called central bank digital currencies, or CBDCs. According to Josiah Hernandez, head of the CBDC Group, “What has spurred interest in CBDC issuance is the realization that it offers a holistic solution for updating financial infrastructure and enables instantly settled payments at no cost to customers.” With fintech giants and central banks alike working toward greater blockchain adoption, we are excited to see what’s next.