Visa recently announced its initiative to experiment with USDC settlement payments via the Solana blockchain.
In a press release, Visa claimed it would allow USDC settlement payments through the Solana blockchain on Sept. 5. The company will facilitate these USDC-denominated transactions to merchant banks Worldpay and Nuvei, who can then process payments to their merchants in the same digital currency.
Visa’s role in the financial ecosystem is monumental, with daily operations involving the clearing, settlement, and transferring of billions of dollars.
Cuy Sheffield, Head of Crypto at Visa, explained that the company’s global network navigates about 25 currencies and collaborates with nearly 15,000 financial institutions. A significant operational undertaking for Visa is ensuring that transactions occur seamlessly, particularly in the preferred and correct currency.
This incorporation of USDC isn’t Visa’s first foray into cryptocurrency. The company began pilot tests using USD Coin in its treasury operations in 2021 in collaboration with Crypto.com. The aim was to explore how cryptocurrencies could simplify and expedite settlement processes, particularly for “crypto-native issuers,” reducing the bureaucratic challenges of international wire transfers and multiple bank accounts.
However, the adoption of blockchain for settlements is still in its test phase. It’s part of an experiment to see how blockchain technology can fit into Visa’s existing massive financial network.
By using its Circle account to facilitate settlement payments on the Solana (SOL) blockchain, Visa purports to speed up the usually time-consuming settlement process for Worldpay and Nuvei.
Yet it’s important to note that while this system could offer faster and perhaps more cost-effective transactions, blockchain technology has its own challenges and vulnerabilities, including security risks and scalability issues.
Sheffield mentioned that Worldpay and Nuvei cater to a diverse range of global merchants, including those active in the blockchain and cryptocurrency. This raises questions about how traditional and digital finance might increasingly overlap or integrate but adds another layer of complexity to regulatory and compliance frameworks.
Visa’s exploration into cryptocurrency integration came after the company began seeking crypto developers to help further its efforts in blockchain and stablecoin adoption. While this signals Visa’s interest in adapting to new financial technologies, a company spokesperson has clarified that Visa’s approach will remain consistent, even if setbacks occur within the volatile crypto industry.
Source: https://crypto.news/visa-tests-usdc-settlement-payments-on-solana-blockchain/