In late March, Visa announced that it would begin accepting payments in the cryptocurrency USD Coin (USDC) directly. Visa’s press release came on the heels of MasterCard’s recent announcement that it would soon begin facilitating crypto transactions and it marks a transition by financial institutions to further embrace crypto and treat it as they would fiat. Visa is now going to start settling certain crypto transactions using crypto, which is another step forward for the digital currency space.

For several years, Visa has partnered with to offer a crypto-based rewards debit card. operates its business in digital currencies, but, as Visa settled transactions each day on those cards, it required the platform to convert crypto into fiat currencies for settlement. This process is costly, complex and time-consuming, and, in 2019, Visa proposed to allow settlements in a digital currency over a public blockchain. To do this, it turned to Anchorage, the first federally chartered digital asset bank and a Visa partner bank.

After two years of tweaking the infrastructure, Visa is ready to pilot the new program using USDC. The stablecoin’s market value is tied directly to the US dollar, which gives it better price stability, but is powered by the Ethereum blockchain. Additionally, USDC has a clear set of compliance and regulatory policies in place that provide greater confidence than traditional many other digital currencies that are decentralized and unregulated.

A ‘settlement’ is the process in the payment lifestyle that allows the purchase to be properly recorded in the purchaser’s account. Visa, in its settlement activity, has to convert all payments into the appropriate currency and sent them to the appropriate merchant bank, where the funds are then deposited into the merchant’s account.

Visa adds that it won’t stop at USDC, but that it intends to add more stablecoins to its settlement platform. The company wants to support central bank digital currencies (CBDC) as they become available, with several already in the works in countries around the world, although most are still exploring the concept. A recent survey by the Bank for International Settlements found that approximately 80% of countries’ central banks were engaged in some sort of CBDC work in 2019.