Visa Settlements Enhance Ethereum as ‘Ultra Sound Money’

Share Article
In Brief
  • Visa will add value to the Ethereum economy.

  • Transactions will be batched by Visa and sent on Ethereum.

  • The news enforces ETH qualities as "ultra sound money."

  • promo

    Want to learn how to trade? Get a beginners guide from _BeInCrypto Academy_ now!

The Trust Project is an international consortium of news organizations building standards of transparency.

The big news that Visa Inc. will be settling transactions for USD Coin using Ethereum is no doubt bullish — but what impact will it have on network scaling and the economy?



On March 29, global payments company Visa announced the use of Circle’s USD Coin to settle transactions on its network. Visa is launching a pilot program with the Crypto.com platform, which will settle payments over the Ethereum network.

In reaction to the big news, David Hoffman penned his latest Bankless DeFi newsletter titled “Visa is going to pay ETH holders.”



He explains how Visa using its own payments network, which can process 1,500 transactions per second, is a way to scale USDC payments on Ethereum.

Ultra Sound Money

Hoffman notes that Visa’s scaling capacity is only something a centralized service provider can offer at the moment. In a similar operation to Layer 2 rollups, which batch transactions into one and process them off the main chain, he commented;  

“Thousands of transactions can happen internally on Visa’s network, and then Visa can make a single, batched transaction to Ethereum that updates the balances of its partners that leverage Visa for USDC transfers.”

While this does not directly scale Ethereum, it reinforces the premise that ETH is “ultra sound money.”

The blog post goes on to suggest how the development could be seen as “rugging the Fed.” The Federal Reserve and the U.S. Dollar have a monopoly as the greenback is the world’s reserve currency, and the Fed controls the ledger, he noted.

Visa settling USDC on Ethereum does not change this. All dollars settle back to the Fed. However, it does move a great deal of economic activity into the Ethereum ecosystem.

Visa is just a settlement platform without its own asset. So, when things grow beyond crypto banks and USDC there could be future integrations with decentralized stablecoins such as DAI or even wBTC.

There is much in store for Ethereum developments in the coming year:

Ethereum Price Reaction

Ethereum prices reacted to the news with an 8% pump to reach an intraday high of $1,830. Although prices have cooled off a little on Tuesday morning, the asset is still up 5.7% on the day. ETH was changing hands at $1,804 at the time of press, according to CoinGecko.

ETH prices have made 142% since the beginning of 2021. It’s even outperformed Bitcoin, which has made around 97% over the same period.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Share Article

Martin has been writing on cyber security and infotech for two decades. He has previous trading experience and has been actively covering the blockchain and crypto industry since 2017.

Follow Author

Trade with the Best Crypto Signals - guaranteed profits with over 70% accuracy

Join now

Want to learn how to trade? Get a beginners guide from BeInCrypto Academy!

Learn now

Bybit Bonus Bash. $1,000 Bonus to be Won!

Join now