By Hannah Lang
(Reuters) -Visa and stablecoin infrastructure provider startup Bridge are partnering to offer stablecoin-linked Visa cards to customers across multiple countries in Latin America, which the companies say will allow users to make everyday purchases in cryptocurrency tokens.
The move comes as the U.S. Congress appears likely to pass a bill creating stablecoin rules for the first time, which experts say could pave the way for more financial firms to use or issue their own stablecoins.
WHY IT’S IMPORTANT
Stablecoins, a type of cryptocurrency designed to maintain a constant value, usually a 1:1 dollar peg, are commonly used by crypto traders to move funds between tokens. Proponents say that they could be used to send payments instantly, but it remains challenging to use stablecoins for everyday purchases because merchants typically don’t accept payments in crypto.
Bridge – which was acquired by Stripe earlier this year – will work on the back-end of transactions that customers make with their linked Visa cards to deduct funds from a user’s stablecoin balance and then will convert the payment into the local currency for merchants.
CONTEXT
Through the partnership with Visa, developers building products on Bridge will be able to add stablecoin-linked Visa cards to their slate of offerings.
Users will be able to use the stablecoin-linked cards at any merchants that accept Visa in Argentina, Colombia, Ecuador, Mexico, Peru and Chile. Bridge and Visa say that the product will become available in Europe, Africa and Asia in the coming months.
KEY QUOTES
“We feel like the moment is now to take some of the things that we’ve already been doing in a more experimental, pilot basis and start to expose them to the world as capabilities that we anticipate will really start to become big and meaningful and globally scalable,” said Jack Forestell, chief product and strategy officer at Visa.
For consumers to use stablecoins at a large-scale, they will have to be interoperable with existing tools and services that customers and businesses are accustomed to, said Zach Abrams, CEO of Bridge.
“This enables folks to use and take advantage of the benefits of stablecoins wherever they are in the world, but remain wholly connected with the financial tools that folks use,” he said.
(Reporting by Hannah Lang in New York. Editing by Mark Potter)
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