After Facebook, it is also Visa’s turn to announce that it wants to create a dollar-backed stablecoin. The payments giant announces that it has connected the U.S Dollar Coin (USDC) to its network of 60 million merchants. USDC, which was developed by the Circle company on the Ethereum (ETH) blockchain, is now worth nearly $ 3 billion.
After Paypal, VISA’s turn
It’s the fashion. All of the major payments networks have found their stablecoin champion to partner with. Facebook has developed its own coin but Paypal for example recently teamed up with Paxos which built, among other things, USDC, which is another dollar backed stablecoin. And today Visa with Circle.
Visa and Circle will work together to integrate USDC into payment cards. The goal is for all businesses using Visa to be able to send USDC dollars to other businesses in the Visa network.
If Circle succeeds in its challenge, Visa plans to create a credit card that allows businesses to send and receive USDC almost in Peer2Peer. This would be a way of bypassing the old SWIFT network which currently infects all transactions between different currency areas.
” We see Visa as a network of networks. Blockchains and stable coins, like USDC, are simply new networks. ”
Sheffield, Visa veteran in charge of the project
In other words, just like Facebook, Paypal or Ripple, Visa is also in the race to become the “SWIFT” (the hub) for stablecoins.
$ 50 per transaction …
Visa estimates that the sum of check payments and instant transfers is approximately $ 120 trillion per year, and they each cost $ 50, regardless of the size of the transaction.
But after two years of work, the company says that with these USDCs being traded on the Ethereum blockchain, transactions can be completed in as little as 20 seconds and virtually for free.
For Sheffield, “ building itself as a network of networks such as Visa Net but also of other networks not belonging to it (SWIFT, USDC), is at the center of Visa’s evolution “. This confirms what we say above.
Finally, remember that Coinbase is the first company to have been authorized (by Visa) to create credit cards using the Visa network. Coinbase claims that this is “the easiest and fastest way to spend your cryptocurrency around the world.”
This is not about advertising Coinbase, but about clarifying that there is a world between a cryptocurrency and a stablecoin. Stablecoin is just a digital shadow of real dollars. Cryptocurrencies are currencies in their own right, of which Bitcoin and its absolutely fixed money supply of 21 million units is a proud representative.
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.
Now, who is foolish enough to spend their Bitcoins instead of their fiat currency? … Multinationals are looking to take your Bitcoins from you. Don’t fall for the trap.