The financial world is witnessing a significant shift as traditional payment giants integrate digital currencies into their ecosystems. In a landmark move, Visa has announced its plans to allow settlement payments using the USD Coin (USDC), a stablecoin pegged to the U.S. dollar. This initiative marks a pivotal moment in the convergence of traditional finance and cryptocurrency, streamlining processes and enhancing accessibility for users worldwide.
Understanding Visa's Stablecoin Initiative
Visa's pilot program, developed in collaboration with Crypto.com, will leverage the Ethereum blockchain to facilitate transactions. Here’s how it works: Crypto.com will send USDC to a custodial account hosted by Anchorage Digital Bank, designated in Visa’s name. Simultaneously, Crypto.com will issue Visa cards that enable users to spend digital assets directly from their Crypto.com wallets.
This partnership eliminates the need for converting cryptocurrencies into fiat currencies during transactions. Traditionally, Visa would convert digital assets into fiat, hold the funds in bank accounts, and complete settlements at the end of the trading day. The new system bypasses this complexity, allowing direct usage and storage of digital currencies.
Both companies have expressed intentions to expand this model to other partners later this year. For Crypto.com, this collaboration represents a strategic leap into global markets. Kris Marszalek, Co-founder and CEO of Crypto.com, noted, "We’ve been a Visa partner for several years, and we’re thrilled to deepen this relationship through our global agreement, pioneering world-first stablecoin payment solutions."
This move aligns with a broader trend of traditional financial institutions and publicly traded companies exploring cryptocurrency ventures. From Mastercard and PayPal to institutional players like BlackRock and BNY Mellon, the race to adopt digital assets is accelerating. The financial sector is poised to embrace blockchain-based currencies, signaling a new chapter in monetary transactions.
Strategic Moves in Cryptocurrency Mining
Beyond payment systems, cryptocurrency mining is attracting significant investments from diverse industries. NASDAQ-listed company The9 Limited (NCTY), also known as Ninth City, disclosed ambitious plans in its 2020 annual report to allocate over $100 million toward Bitcoin and Filecoin mining equipment in 2021.
Key investments include:
- A $1.4 million deposit paid to MicroBT for priority rights to purchase 5,000 WhatsMiners over one year, with 922 units already acquired.
- An order for 24,000 Antminer S19j machines from Bitmain, valued at $82.8 million, with deliveries starting in November 2021.
- Acquisition of approximately 45,000 Bitcoin miners from 14 individuals through the issuance of 36.5 million Class A ordinary shares.
- A $10 million agreement with a Filecoin mining provider for hardware and technical support.
If global hash rates remain stable, The9 anticipates achieving a total hash rate of 3.5 EH/s by October 2022 once all miners are operational. The company projects cumulative mining revenues of 5,200 Bitcoins over the following 18 months. With Bitcoin prices sustaining high levels, mining profitability could incentivize more enterprises to enter this sector.
Global Regulatory Developments
Governments worldwide are crafting frameworks to regulate digital assets, balancing innovation with security.
Canada: The Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) issued guidance on March 29, 2021, outlining securities law requirements for crypto asset trading platforms. The notice covers platforms handling crypto assets classified as securities or derivatives, including those trading foundational assets like Bitcoin or Ethereum. The interim approach aims to foster innovation while ensuring compliance.
Dubai: The Dubai Financial Services Authority (DFSA) proposed a regulatory framework for security tokens on March 29, initiating a 30-day public consultation. The proposal includes allowing public offerings of security tokens, permitting retail access to trading facilities, and enhancing custodial requirements for digital wallets.
United Kingdom: The UK Financial Conduct Authority (FCA) now requires cryptocurrency firms to submit financial crime reports under the "REP-CRIM" classification. This policy, effective from March 31, 2021, mandates compliance based on business activities and money laundering risks.
China: Yunnan province unveiled ten measures to support blockchain development, including subsidies for infrastructure, application trials, and enterprise adoption. The policy allocates up to ¥10 million for blockchain platforms, ¥50 million for technology adoption, and ¥16 million rewards for listed blockchain companies. These measures are effective until December 2023.
Blockchain Network Metrics
Key network metrics reflect growing activity and mining profitability (data updated to April 3, 2021):
- Bitcoin recorded 2.105 million new transactions weekly, a 2.6% increase.
- Ethereum saw 9.167 million new transactions, rising 2.1%.
- Bitcoin miners’ average daily earnings reached $58.743 million, up 2.5%.
- Ethereum miners’ daily earnings averaged $22.03 million, surging 14.2%.
- Bitcoin’s average hash rate was 162 EH/s, down 2.3%, while Ethereum’s reached 486.6 TH/s, up 4.9%.
- Bitcoin’s mining difficulty averaged 22.21T, increasing 1.6%; the next adjustment预计 on April 16, 2021, with an estimated 5.4% rise to 23.41T.
- Ethereum’s average mining difficulty was 6.19T, up 4.9%.
Market Performance Review
The Chainext CSI 100 Index, which tracks the top 100 cryptocurrencies by market cap and liquidity, rose 9.38% over the week ending April 2, 2021. The 24-hour trading volume stood at $174.572 billion. Bitcoin’s global average price increased 5.02% to $58,758.56, while Ethereum surged 23.75% to $2,093.12.
Sector-wise, several segments outperformed the CSI 100 average:
- Payments & Transactions: +32.32%
- Entertainment & Social: +32.6%
- Commerce & Finance: +10.83%
- Base Enhancement: +43.07%
- Base Chain: +20.9%
- Storage & Computation: +15.14%
- Artificial Intelligence: +14.5%
Underperformers included IoT & Traceability (+3.15%) and Pure Currency (+5.45%).
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Frequently Asked Questions
What is Visa’s new cryptocurrency initiative?
Visa will permit settlement payments using USD Coin (USDC) through a pilot program with Crypto.com. This allows users to spend digital assets directly via Visa cards without converting to fiat currencies, streamlining transactions and reducing costs.
How does cryptocurrency mining work for companies like The9?
Mining involves using specialized hardware to solve complex mathematical problems, validating transactions on blockchains like Bitcoin. Companies invest in miners to earn rewards in native cryptocurrencies. profitability depends on factors like hash rate, energy costs, and crypto market prices.
Why are governments regulating crypto assets?
Regulations aim to prevent financial crimes, protect consumers, and ensure market stability. Frameworks provide clarity for businesses while fostering innovation while addressing risks like money laundering and fraud.
What are the risks of investing in blockchain-based assets?
Risks include regulatory changes, technological development delays, market volatility, and security vulnerabilities. Investors should conduct thorough research and consider their risk tolerance.
How do stablecoins like USDC maintain their value?
Stablecoins are pegged to reserve assets like fiat currencies or commodities. USDC is backed by U.S. dollars held in audited reserves, ensuring 1:1 redeemability and price stability.
Can traditional financial systems fully integrate cryptocurrencies?
Integration is accelerating through partnerships like Visa’s, but full adoption requires scalable infrastructure, clear regulations, and broader institutional acceptance. Current trends indicate progressive convergence.