Visa recently announced that it plans to introduce stablecoins into swift settlements.. That is, on a par with ordinary money, use a crypt. What is this if not a revolution in payments?

Stablecoins are cryptocurrencies whose value is pegged to a reference asset, which is either ordinary money or goods that are traded on the exchange (for example, precious metals), or another cryptocurrency. For example, such as Bitcoin and Ethereum.

Swift is a financial messaging network used by banks and does not currently support the use of cryptocurrencies such as stablecoins. To use stablecoins in banking processes, they must first be converted into fiat currency, that is, into the money familiar to us supported by Swift. And only then banks can use Swift to transfer funds using traditional banking methods. Consequently, we are talking not only about money transfers, but also about the conversion of traditional money into "

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Visa's intention is not theoretical, the company wants to implement it already in 2023, and this only confirms the opinion that the cryptocurrency market will still become a payment platform, and not a piggy bank. In 3–5 years, we will use cryptocurrency as ordinary money, and will not consider it an investment tool. The progress that VISA, which is a pioneer in the creation of such processing, wants to achieve, will allow us in the future to pay even for bread with crypto, and do all conversions in seconds.

Processing itself is the actual activity of processing payments.. Thanks to processing services, you can pay for purchases with bank cards or electronic money. Visa offered processing services back in 1977. MasterCard introduced a similar system in two years. Visa's competitor, which shares the world market with it, also expressed interest in stablecoins, but did not go beyond theory and will now have to catch up with Visa in introducing cryptocurrencies to these processes..

It would be interesting to know how much VISA is willing to spend on the introduction of stablecoins in swift settlements, and what benefits it will receive from the implementation of this project. But does not give information about its specific costs for the development of cryptocurrency processing.. Of course, as a publicly traded company, VISA is required to disclose its financial information through regulatory documents such as annual reports and SEC filings, but this information usually does not include specific details of R\u0026D spending.. However, VISA, as a large multinational financial services corporation, would hardly have invested in the use of blockchain technology and the attraction of cryptocurrencies to settlements if it had not seen the prospects in these investments..

By the way, the appearance of crypto in swift settlements over time can eventually shed light on the crypto market itself, the scale of savings, the direction of transactions, etc.. Now the data on this is rather limited, although it is already clear that the Ukrainians are not trailing behind here..

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In 2022, Ukraine took third place in the global ranking of the distribution of cryptocurrencies among the population after Vietnam and the Philippines. According to the research company Tripple A, the number of citizens owning cryptocurrencies in our country increased by more than 2% over the year, and at the beginning of 2022, 15.72% of the population, or 6.5 million Ukrainians, had crypto assets. Unfortunately, these are all approximate data, and their reliability is conditional.. The situation is similar with the fact that there is no exact number of cryptocurrency wallets owned by residents of Ukraine. It's impossible to determine. The number of wallets can vary and is not necessarily equal to the number of owners. Unfortunately, cryptocurrencies are decentralized and do not have central regulators, such as central banks, that would track their volumes or distribution among owners.. Of course, attracting crypto to the traditional money market should change a lot in this aspect as well..

Be that as it may, the popularity of cryptocurrency and blockchain technology in Ukraine is obvious. By the way, we became the first state whose government opened a collection of money in cryptocurrency, having collected almost $ 200 million for military needs.. in equivalent. Converting these donations into US dollars was also not an easy task.. The only exchange that agreed to such an exchange at the time was FTX, which recently went bankrupt.. Such problems with the exchange will also be a thing of the past if VISA brings its plans to the end.. As a result, this will also expand the possibilities of attracting investments in the form of stablecoins..

Actually, this is what the head of the Visa crypto division, Cu Sheffield, says, noting that the company is thinking about how to use crypto assets that now remain outside the banking systems and attract them to the global financial system, significantly expanding its capabilities..

Of course, moving crypto to the traditional banking rails should change a lot, and not all stablecoin owners will like these changes, but they will definitely change the attitude towards stablecoins as payment instruments and affect their distribution.. The crypto market, which has experienced unheard of turbulence over the past year, is benefiting from this revolution from Visa..

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Read more articles by Alexander Boltyan at the link.