Visa Enhances Cross-Border Payments with Stablecoins and Blockchain
Visa announced on September 5 its expanded use of USDC, a dollar-pegged stablecoin, alongside blockchain networks like Solana to accelerate cross-border settlements. This move underscores the growing role of digital currencies in global financial infrastructure.
Why Solana Outshines Ethereum for Visa’s Pilot
Solana’s blockchain processes 65,000 transactions per second (TPS), a stark contrast to Ethereum’s 30 TPS. This efficiency made Solana the ideal choice for Visa’s pilot program, which now routes USDC payouts to merchant acquirers Worldpay and Nuvei. Merchants can opt to receive funds in USDC or convert them to fiat currency.
Key advantages of Visa’s new approach:
- Faster settlements: Traditional cross-border transactions take days; blockchain reduces this to minutes.
- Lower fees: Stablecoin transactions minimize costs compared to legacy systems.
- Flexibility: Merchants engaged in crypto ecosystems can directly accept USDC.
👉 Explore how blockchain is reshaping global payments
How Visa’s Stablecoin Settlement Works
Visa maintains a USDC reserve account to streamline payouts:
- A customer purchases goods using a Visa card.
- Funds move between banks via Visa’s network.
- USDC is sent to acquirers (e.g., Worldpay), who distribute it to merchants.
Cuy Sheffield, Visa’s Head of Crypto, emphasized:
"Stablecoins and blockchains like Solana modernize cross-border settlements, offering clients faster fund transfers."
Market Response and Future Potential
Following the announcement, Solana’s native token (SOL) saw a 1.3% price increase within hours. While adoption is still early, Visa’s pilot signals long-term potential for blockchain-integrated settlements.
FAQ Section
Q: Why did Visa choose USDC over other stablecoins?
A: USDC’s regulatory compliance and transparency align with Visa’s risk management standards.
Q: Will merchants pay fees for USDC conversions?
A: Fees depend on the acquirer, but blockchain transactions generally cost less than traditional wire transfers.
Q: Is Solana’s speed reliable at scale?
A: Visa’s pilot will test Solana’s real-world performance; its high TPS suggests scalability.
Q: Can other stablecoins be used in this system?
A: Currently, Visa supports only USDC, but future expansions are possible.
👉 Discover more about stablecoin adoption in finance
Conclusion
By leveraging Solana’s speed and USDC’s stability, Visa bridges traditional finance with blockchain efficiency. This initiative could catalyze broader institutional adoption of digital currencies—transforming how global payments are processed.
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