Page 86 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.79, # 1, 2022, pp. 80-89

On March 29, 2021, Visa International Card Organization announced that it will
allow customers to make transactions with USD Coin (USDC), a stablecoin fixed at
1:1, and became the first large payment network to use cryptocurrency to make
payments. This step is a bigger step in bringing cryptocurrencies into the main
financial position.

Visa is partnering with Anchorage, a digitally active bank, and Crypto.com, a
cryptocurrency exchange platform, to conduct transactions over the Ethereum
network for the pilot program. The payment giant plans to add more partners later
this year. The project is the result of an 18-month project launched in 2019.

The move aims to facilitate transfers between digital assets and fiat currencies
without incurring any extra fees, reflecting increased interest in the crypto space,
especially from crypto-native FinTechs. Cuy Sheffield, Head of Crypto at Visa, said:
“we see increasing demand from consumers across the world to be able to access,
hold and use digital currencies”.

Visa’s pilot program eliminates the need for cryptocurrency platforms to convert
digital currencies into traditional fiat currency before settling transactions with Visa.
The fiat-denominated cryptocurrency USDC will, as such, be treated like any other
the other 160 fiat currencies Visa clears and settles. This enables crypto-native
companies to settle transactions with Visa without having to maintain a traditional
bank account. This reduces complexity, speeds up the process, and reduce
transaction costs. Visa is already partnering with around 35 digital platforms,
including Coinbase, Bitpanda, and Crypto.com, all of which have more than 50
million active users.
Bridging the gap between digital and traditional fiat currency payment networks is
essential for cryptocurrencies to become a widely accepted payment method used by
consumers. Visa’s pilot program will facilitate a more widespread use of digital
currencies.

The value of Bitcoin, Ethereum, and other cryptocurrencies rose after Visa said its
payment network would use USDC to settle transactions.

CONCLUSION
Stablecoin is a type of cryptocurrency that is backed by assets such as country's
national currency or gold and is designed to provide more stability than other
cryptocurrencies. There are types of stablecoins that are backed by the national
currency of any country, supported by crypto assets, backed by precious metals, and
algorithmically. Each of them has specific features. Stablecoins can also be used for
daily shopping at traditional outlets.

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