A New Partnership
Most people are aware of cryptocurrency only peripherally, as strange things that people invest in, or use their computers to ‘harvest’ or, in the darkest cases, are used as an untraceable method of paying for illegal goods and services on the ‘dark web.’
Which makes it strange that the credit card giant Visa has announced it will partner with the USD-Coin (USDC) Cryptocurrency.
Naturally, when we heard the news, we began wondering what this meant for consumers.
Concerns of Legitimacy
The first thing you need to know is that while some headlines are proclaiming that Visa are partnering with Ethereum, one of the many cryptocurrencies available that are prevalent on the market. This isn’t entirely the case – the currency that visa have actually partnered with is USD Coin, a currency that uses Ethereum’s blockchain network for its storage and encryption. The parent company of USDC, Circle, has been added to Visa’s ‘fast track’ program, meaning their services should become available some time in 2021.
Unlike most cryptocurrency, USDC is what is known as a ‘stablecoin’. Unlike bitcoin, USDC is backed by actual assets, making it a more stable platform, and – supposedly – less prone to the massive swings in value that traditional cryptos have faced. USDC in particular also has a 1:1 exchange rate with US Dollars, allowing those who use it to have a definitive value of their ‘coins.’ In terms of what this means for the average Visa customer… not an awful lot, on the face of it. It will allow you to send and receive money in the form of USDC the same was as you do other currency, and if you’ve invested in it you will probably do quite well from the partnership.
Looking a little deeper, though, what it does mean is that Visa customers will be – theoretically – able to use all of the benefits of cryptocurrency, without the risks of instability that non-stablecoin backing holds. AS a payment network, USDC will allow visa customers to securely and quickly send money anywhere in the world, without the transaction fees that currently affect such transactions.
In the long run, however, what we may be seeing is the further legitimising of cryptocurrencies as a viable alternative method of payment for a wider range of customers. Linking to a cryptocurrency such as USDC allows Visa customers to easily use what has previously been an impenetrable system, allowing more freedom for all who use it.
Main Image provided by Shutterstock