Exclusive: Visa moves to allow payment settlements using cryptocurrency

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(Reuters) - Visa Inc said on Monday it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network, the latest sign of growing acceptance of digital currencies by the mainstream financial industry.

The company told Reuters it had launched the pilot program with payment and crypto platform Crypto.com and plans to offer the option to more partners later this year.

Bitcoin, the most popular crypto coin, jumped to a one-week high on the news, rising as much as 4.5% to $58,300 and heading back toward a record-high above $61,000 hit earlier this month.

Visa subsequently confirmed the news in a statement.

The USD Coin (USDC) is a stablecoin cryptocurrency whose value is pegged directly to the U.S. dollar.

Visa’s move comes as finance firms including BNY Mellon, BlackRock Inc and Mastercard Inc take steps to make more use of cryptocurrencies for investment and payment purposes.

Tesla Inc boss Elon Musk, a major proponent of cryptocurrencies, said last week that customers can buy its electric vehicles with bitcoin, hoping to encourage more day-to- day use of the digital currency.

“We see increasing demand from consumers across the world to be able to access, hold and use digital currencies and we’re seeing demand from our clients to be able to build products that provide that access for consumers,” Cuy Sheffield, head of crypto at Visa, said.

Traditionally, if a customer chooses to use a Crypto.com Visa card to pay for a coffee, the digital currency held in a cryptocurrency wallet needs to be converted into traditional money.

The cryptocurrency wallet will deposit traditional fiat currency in a bank account, to be wired to Visa at the end of the day to settle any transactions, adding cost and complexity for businesses.

Visa’s latest step, which will use the ethereum blockchain, strips out the need to convert digital coin into traditional money in order for the transaction to be settled.

Visa said it has partnered with digital asset bank Anchorage and completed the first transaction this month — with Crypto.com sending USDC to Visa’s Ethereum address at Anchorage.

Bitcoin jumps to one-week high as Visa pilots crypto settlement

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Bitcoin’s meteoric rise has boosted crypto hedge funds Dado Ruvic/Reuters

Cryptocurrency M&A is expected to have a stellar 2021, according to PwC, after the value of M&A deals in the space doubled year over year in 2020.

The firm revealed that the average M&A deal size jumped by 174% from $19.2 million to $52.7 million in 2020.

PwC outlined the three trends to expect in the crypto space in 2021.

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Mergers and acquisitions will be a big theme in the cryptocurrency space, according to PwC, after the value of M&A deals in the sector doubled year over year in 2020.

In a report published on Monday, the Big Four accounting firm revealed that the average M&A deal size jumped by 174% from $19.2 million to $52.7 million, with four deals valued at more than $100 million in 2020. The firm also revealed that transactions are shifting away from the Americas, with 60% occurring in Asia and Europe compared to 2019.

Transactions, according to PwC, are also more spread out across categories.

“With increasing interest in crypto from retail and institutional investors following the positive market momentum, it is not surprising to see increase M&A in the broader train sector,” the report said.

The report comes amid a rapid rise of interest in the cryptocurrency space, with bitcoin, the most popular digital asset, rising 600% in the past year alone. While many bitcoin bears continue to criticize cryptocurrencies, many advocates are expecting the boom to continue amid rising interest from both retail buyers and institutions.

The UK-based firm, in the report, then outlined the three trends to expect in the M&A activity in the crypto space across the globe after a record-breaking 2020.

Crypto M&A will be be driven by large players

PwC said it expects to see further consolidation in the industry with larger, well-funded, and profitable firms seeking to continue their M&A activities. “We expect the focus to be not on the acquisition of smaller competitors but rather of firms that offer ancillary services to their current offering,” the report said, referring to crypto media, data, and compliance research.

Institutionalization of the crypto industry will continue

The firm said it predicts a steady continuation of institutionalization of cryptocurrencies, driven by the rally in the price of the digital tokens as well as heightened media attention on central bank digital currency (CBDC), stablecoins, decentralized finance (DeFi), and non-fungible tokens (NFTs). PwC said all these will serve as catalysts to more institutions wanting to enter the space through investing or acquiring.

M&A, as well as fundraising, will increase

Based on the bull market in the first quarter of 2021, PwC said it expects the number and value of M&A deals to increase this year. It also said it sees more activity comeing from Asia-Pacific and EMEA reagions.