VISA x USDC
The giant payment processor and card issuer Visa has just announced that they’re opening up their network of 60M+ merchants to USDC. The latter is a stablecoin developed by Circle which mainly lives on the Ethereum blockchain.
Over the past year, USDC has witnessed parabolic growth. During the DeFi summer of 2020, its market capitalisation saw the first jump over the $1 Billion line as it became the stablecoin of choice for most DeFi users.
It remains, the second largest stablecoin by market cap, with Tether’s USDT occupying first, but its growth cannot be ignored and it may be going significantly higher with this partnership.
USDC will be integrated with select Visa card users to allow them to send and receive the stablecoin. Later on, businesses will be able to send any international payment to another business using USDC, which would then be settled in the currency of choice.
According to Visa, over $120 Trillion worth of payments are made very year using checks and wire transactions which cost up to $50 each. Since USDC lives on the Ethereum blockchain, payments can be made much quicker (~20 seconds) and the fees can be negligible.
While this network is inspired by what Bitcoin made popular, USDC is a centrally-issued stablecoin which most likely pleases many regulators. This means at the request of authorities, payments can be reversed and accounts can be blacklisted/frozen. This has previously taken place, in July of this year when $100,000 worth fo USDC were frozen by the CENTER consortium at the request of authorities.
With Central Banks looking to launch their own and now Visa integrating USDC into its network, stablecoins are proving their utility in a more efficient payments infrastructure. This has been recognized by the OCC (Office of the Comptroller of the Currency) which allowed banks to custody reserve funds on behalf of stablecoin issuers in September.