Top tier global payment platform, Visa, is set to make a grand entrance into the crypto space with the adoption of only the USD Coin (USDC) as a means of payment and transactions on its platform.
The platform over a month ago, made the announcement opting to accept only the USDC as against high-value market-leading cryptocurrencies like Bitcoin and Ethereum.
Why Only USDC?
For a first-timer, Visa appears unwilling to dive into the tempestuous waves of value volatility that mark the cryptocurrency market. This is the part where over 85% of all cryptocurrencies – including Bitcoin, have as their habitat.
It is seeking rather to first test the waters at relatively stable points with stablecoins. The USDC is believed to be a stablecoin for the double reason that it is authorized by the US government and has the fiat backing of large dollar reserves.
Other peculiar reasons which make it the top choice for Visa is its demand volume which surpasses the $10 billion mark and the promised security that comes with regulatory compliance and routine audit checks by the reputable global finance company, Grant Thorton.
In Partnership With Crypto.com
Visa has light experience in the crypto world and as such, isn’t looking to do this on its own. It has teamed up with Crypto.com — the world’s largest payment platform for cryptocurrencies to integrate both APIs for rapid and seamless fiat-crypto transaction conversion and settlement.
This collaboration could see Visa’s daily transactions increase over 70% from the billions it currently handles. Already, both companies have rolled out several classes of Crypto Visa Cards acceptable for payment on a variety of accredited sales platforms for various everyday use.
According to Al Kelly, Visa’s CEO, the four basic areas the company is looking to spread its tentacles in the crypto world are:
- Becoming a major player in the cryptocurrency spending and purchasing community.
- Moving to help traditional banks create APIs that connect them to the crypto market.
- Advancing more stablecoin settlement options and,
- Expediting the creation and acceptance of Central Bank Digital Currencies (CBDCs).
CBDCs to Rival Cryptocurrencies?
Given that CBDCs are still in their iterative stage, it is unclear what final shape the digital currency will take or what edge it may have over a plethora of digital currencies already available in the market. One thing is certain, however, for many lily-livered overly cautious investors, the CBDC will guarantee a form of centralization that ensures the safety of their assets and cushioned volatility, unlike cryptocurrencies.
Still, most of these government-backed digital currencies, when finally released, will eventually have to be stored in digital wallets susceptible to internet failures or device power outages, stifling transaction efforts and making them less effective when compared to paper money.
Proponents of these innovations have touted NFC and Bluetooth as readily available means for offline transactions but there are still questions on the safety and security of the assets.
With the only visible advantage being the government’s backing, CBDCs appear to be in a race to become more effective than traditional paper money and decentralized cryptocurrencies at the same time.
Whose loss is it? Visa or Bitcoin
Clearly, Visa has outlined that its trajectory in the cryptocurrency world is diverse. It hopes to stroll on the side of centrally authorized legitimacy. It is content to lose out of the billions of transaction fees per second that accumulates from all other cryptocurrencies that make up 99% of the market.
For Bitcoin, Visa’s snub is only a ketchup stain on its pristine white reputation. A reputation rooted in consensus and consistency. Time will wash it off.
Frankly, the two industry giants can take care of themselves.