Major credit credit provider Visa is piloting a program that will allow its partners to use the Ethereum (ETH) blockchain to settle a transaction made in fiat.
In a Monday announcement, Visa said it will be partnering with cryptocurrency exchange platform and card issuer Crypto.com to offer a crypto settlement system for fiat transactions later this year. Visa’s partners will reportedly be able to exchange USD Coin (USDC) over the credit card’s payment network to clear transactions made in fiat currency.
According to Visa, its standard settlement process requires partners to send fiat currency via wire transfer, which “can add cost and complexity for businesses built with digital currencies.” The pilot would reportedly allow Crypto.com to send USDC to Visa’s Ethereum address to settle some of transactions under the crypto exchange’s Visa card program by linking Visa’s treasury with digital asset platform Anchorage.
“Crypto-native fintechs want partners who understand their business and the complexities of digital currency form factors,” said Visa chief product officer Jack Forestell. “The announcement today marks a major milestone in our ability to address the needs of fintechs managing their business in a stablecoin or cryptocurrency.”
The firm said it aims to make this system available to Fintech companies and neobanks dealing in cryptocurrencies including Bitcoin (BTC), Ether (ETH), and USDC. Visa reports “billions of dollars” in fiat are involved in clearing and settling transactions daily.
Crypto.com announced a partnership with Visa earlier this month in which the exchange would join the Visa network and expand the reach of its crypto debit card. At the time, the company said it would be rolling out a fiat lending program to allow cardholders to use their crypto holdings as collateral for fiat loans — funds that users could spend in merchant platforms that support Visa payments.