PayPal & Visa have both enabled the functionality of settling retail transactions in cryptocurrencies
For all those skeptics who thought of Cryptos as a passing fad, this should serve as a reminder that the digital assets are as real as any of the other financial assets and they are here to stay. Some of the recent news to hit the wires have propelled Bitcoin and the associated cryptos higher. At the time of writing, Bitcoin is trading close to $59k, all set to take on the previous all-time high, after making a higher low.
It was only recently that the world’s largest asset manager, BlackRock, announced that it would give its clients the opportunity to explore investing in Bitcoin. Seems like this move has set a precedent for other big players in the arena. Now, Fidelity Investments, with $5.9 trillion under management, has announced plans to launch an exchange-traded fund (ETF) that tracks the price of Bitcoin.
FD Funds Management, a subsidiary of Fidelity, submitted an S-1 filing to the Securities and Exchange Commission (SEC) outlining its intention to financially back the ETF. Dubbed as ‘Wise Origin Bitcoin Trust’, it will track the cryptocurrency through the Fidelity Bitcoin Index, which takes spot prices from various Bitcoin markets, including popular exchanges. Big money managers in the legacy financial system are suddenly taking a liking for the mainstream cryptos.
You see big investors don’t usually pour their money into speculative assets, as cryptos are still considered by some people. And they still hypothesize that cryptos can never replace fiat money for everyday retail payments etc. Well, they are about to get a surprise there as well. Visa & PayPal have both recently announced that they will be introducing functionality for their users to settle their retail payments in Cryptos.
Talking about the largest credit card merchant first, Visa supports 160 currencies across the globe in 200 markets around the world. The company recently announced that it would allow settlement of transactions using USD Coin (USDC) — a stable coin powered by the Ethereum blockchain. Crypto.com is the first company to test the new capability with its own Visa-branded cards.
According to the announcement, Visa will be working with Anchorage — the first federally chartered digital asset bank and an exclusive Visa digital currency settlement partner, Visa has launched a pilot that allows Crypto.com to send USDC to Visa to settle a portion of its obligations for the Crypto.com Visa card program. No need to convert to fiat currency. Visa intends to add other partners to the program, down the line.
The other big news came from Paypal. As reported by Reuters, building on the ‘Checkout with Crypto’ functionality introduced back in October, the company would now allow U.S. consumers to use their cryptocurrency holdings to pay at millions of its online merchants globally. Paypal intends to make this service available to all of its 29 million merchants in the coming months, giving a significant boost to crypto retail payments. There won’t be any transaction fees associated with such transactions, but only one type of digital coin can be used for each purchase.
While lawmakers around the world still grapple with the idea of coming up with a regulatory framework, mainstream cryptos continue to make deeper inroads into the legacy financial system. Extreme steps like an outright ban or other measures like issuing a Central Bank Digital Currency (CBDC) might not prove fruitful in holding off this ‘Crypto Tsunami.’
Originally Published on Medium