Visa Tests USDC Payments on Solana
Visa, the global payments processor, has announced its support for USD Coin (USDC) payments settled on the Solana blockchain, as part of its effort to expand the use of stablecoins. Visa has conducted live and completed pilots with issuers and acquirers, moving millions of USDC tokens between partners across the Ethereum and Solana blockchains to settle fiat-based payments. This move reflects Visa's ongoing exploration of the potential of blockchain technology in cross-border settlements.
Partnerships with Crypto.com, Worldpay, and Nuvei
Visa's adoption of USDC has evolved through various partnerships and integrations. The payments firm initially collaborated with Crypto.com in 2021 to test stablecoin settlement. The pilot leveraged Ethereum-based USDC to receive payments for cross-border volume on Crypto.com's Australian card program, eliminating the need for lengthy currency conversion processes and wire transfer fees. Now, Visa's integration of USDC issued on Ethereum and Solana allows the stablecoins to leverage Visa's treasury and settlement systems.
Improving Cross-border Settlement Speed
According to Cuy Sheffield, Head of Crypto at Visa, leveraging stablecoins like USDC and blockchains such as Ethereum and Solana helps improve the speed of cross-border settlement. By connecting traditional finance with Web3 and the wider cryptocurrency space, Visa aims to streamline and accelerate global payments using blockchain technology.
Enhancing Merchant Payment Solutions
Visa's integration of USDC also benefits merchant payment processors such as Worldpay and Nuvei. The payment processors can now route USDC payments to the merchants they serve, connecting Visa's traditional fiat ecosystem to the world of stablecoins and cryptocurrencies. This integration is expected to reduce settlement times and offer merchants more choices for receiving funds.
Future Innovations and Opportunities
The partnership between Visa and Circle, the issuer of USD Coin, marks a significant blockchain innovation that could potentially transform payments and commerce. Nabil Manji, Worldpay's Head of Crypto and Web3, believes that Visa's new USDC settlement service is the first step towards faster and more cost-efficient settlement of consumer payments. This development opens the door to exploring future enhancements, such as 24/7/365 settlement availability and real-time or multiple daily settlements, which can further accelerate cross-border commerce.
Exploring Off-chain Solutions for Ethereum Gas Fee Settlements
Visa is also exploring off-chain gas fee settlements for Ethereum using a Paymaster smart contract. These smart contracts have the capability to make payments for users and execute logic for various transaction functionalities, offering a potential solution to the scalability and cost challenges of on-chain transactions.
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