Visa Integrates With Solana Following Terminating Binance Partnership
Solana starts a partnership with payments gian Visa | Credit: Shutterstock
- Visa announced USDC pilot to Solana expansion for cost-efficient settlements.
- Visa’s Solana expansion highlights stablecoins’ role in payments.
- It also emphasizes the growing demand for decentralized blockchain infrastructure.
- The company doesn’t intend to cut itself off from crypto.
In a recently announced pilot, Visa stated on Tuesday, September 5, 2023, that it would start sending USDC, the second-largest stablecoin by market capitalization, to a restricted group of merchants via the Solana blockchain.
While credit card users simply swipe or tap their cards to make purchases, Visa manages a complex payment process behind the scenes. After a purchase, the cardholder’s bank transfers funds to Visa’s treasury, which Visa then transfers to the merchant’s bank.
Not the First Crypto Co-Lab
The payments giant has previously permitted businesses, particularly crypto-native businesses like Crypto.com , to transmit payments to its treasury using USDC, the dollar-backed stablecoin produced by Circle. However, this is often done with fiat money.
Now, Visa, which has a special account with Circle, will start sending USDC from its treasury to two sizable payment companies, WorldPay and Nuvei, who may then help businesses receive payments directly.
Because Solana’s blockchain has the ability to perform transitions more quickly than Ethereum’s does, the companies have chosen to transmit and receive USDC over that network.
“Expanding the pilot exemplifies how pairing USDC with Visa’s innovation opens up the future of payments, commerce, and financial applications,” said Jeremy Allaire, co-founder and CEO of Circle.
Visa’s head of cryptocurrency, Cuy Sheffield, says that despite stablecoins’ promises to expedite bank payments, the processing time for transferring funds in and out of its treasury will remain unchanged.
In an interview, he stated that, while at this early stage, “we’re really just giving the option to send or receive USDC instead of a bank wire, we’re not necessarily sending money out faster or receiving money in faster.” “I believe there is potential to begin doing that over time.”
According to the Solana’s X announcement “Visa’s pilot program expansion to Solana demonstrates that stablecoins like USDC can play a role in the existing payments ecosystem and that there is real demand for enterprise-grade decentralized blockchain infrastructure”.
VISA Doesn’t Avoid Cryptocurrency
Despite ongoing federal regulatory actions against the cryptocurrency industry, Visa’s partnership with Solana for USDC settlement expansion represents another crypto initiative from a traditional payments corporation this year.
Paxos, a stablecoin issuer, received a Wells Notice from the SEC in February, which is a legal notice that the government plans to sue a corporation.
In light of the regulatory scrutiny, PayPal, which teamed up with Paxos to create its own stablecoin, announced it was “pausing” work. The publicly traded payments company did however introduce its stablecoin in August.
Also, the most recent addition to Visa’s oponent Mastercard’s new cryptocurrency offerings, is the so-called Multi Token Network, or MTN .
But only a few months later, Mastercard announced that it was ending its collaboration with Binance on prepaid cryptocurrency debit cards after the SEC sued the biggest cryptocurrency exchange in the world in June.
The company ceased providing Binance cards in Europe as of this summer, according to a Visa representative.
However, Visa’s most recent test indicates that the company won’t be abandoning cryptocurrency anytime soon, particularly stablecoins.
According to Sheffield, “we’ve reached a point where there is a recognition that stablecoins can play a role in payments, that they can solve real challenges.”
