Payments network Visa has taken the first step into accepting cryptocurrencies as a payment option for their various merchant integrations.
“The company becomes the first in the industry to bridge the gap between digital and traditional fiat currencies” (Yahoo! Finance). By using the Ethereum blockchain, VISA will be able to settle transactions using a token that exists on the network, USDC, which is pegged to the U.S. Dollar’s value. This change will allow VISA to cut costs in the background on waiting for settlements to complete.
VISA has a range of reasons for why they are in the initial stages of blockchain settlement:
- Bitcoin reaching new highs
- A market-wide bullish sentiment on most of the popular cryptocurrencies
- An increasing trend line over multiple market cycles showing longevity of the space
- Ethereum ramping up its scalability plans (ETH 2.0)
- Payments competitor Mastercard also joining in the cryptocurrency conversation.
What This Could Mean For Your Business
With credit-card companies adding more payment capabilities, merchants and customers will likely start seeing more choices available to them. It isn’t a stretch at all to see in the next few years (or months!) the ability to pay a merchant in fiat currency (USD, CAD) and the merchant through their VISA network is able to receive Bitcoin or Ethereum on their end. Or a customer can pay a merchant with Bitcoin and the merchant receives a stablecoin such as USDC to avoid harsh volatility.
Pros and Cons of Stablecoins
Stablecoins are useful, but its important to weigh their pros and cons.
Pros:
- Value stability
- Average 2-10 minutes for global settlement
Cons:
- Unpredictable transfer fees
- Centralized entity controls the value-peg
- Value is tied to inflationary fiat