Digital payments company Visa announced on Tuesday the expansion of its stablecoin settlement pilot program to the layer-1 Solana network. The expansion, still in the testing stage, will allow two selected merchants to access USDC stablecoin via the Solana blockchain.
Visa Launches Pilot Program for Stablecoin Settlement
According to an official press release, Visa will start its onboarding process with two large payment companies, WorldPay and Nuvei. These firms will pilot the new program by receiving USDC from Visa’s treasury, which can be used to conduct payment settlements for clients.
Visa initially facilitated digital transactions with fiat currencies through several actions. When a user makes a purchase, they send the money to Visa’s treasury, and the payment giant, in turn, sends the funds to the merchant’s bank.
Since it adopted the USDC stablecoin in March 2021, Visa has allowed companies like Crypto.Com to send funds in the form of USDC to its treasury.
Having a unique account with Circle, the company issuing the USDC stablecoin, Visa can easily send the stablecoin from its treasury to its new payment partners. Both firms will receive USDC from Visa and facilitate payment for merchants.
Why Solana?
Solana was selected because of its transaction speed, low transaction cost, high throughput, and level of decentralization. The two companies collaborating with Visa prefer the use of Solana over Ethereum since the latter is not known for speedy transaction completion.
Visa’s Head of Crypto, Cuy Sheffield, explained that the transaction processing time between Visa’s treasury and its partners will remain the same even though the selection of Solana was to increase the speed. He adds that speedy transactions may be introduced later.
“In this early stage, we’re really just giving the option to send or receive USDC instead of a bank wire, but we’re not sending money out faster or receiving money in faster necessarily. Over time, I think that there’s potential to start doing that,” he said.
This is not the first time Solana will be chosen by mainstream companies. Last month, Solana Labs partnered with the e-commerce company Shopify to adopt the Solana network to conduct USDC-denominated transactions.
