Visa, the global leader in digital payments, has announced that it will leverage the Solana blockchain to enable fast and secure cross-border transactions. Solana is a high-performance, scalable, and decentralized platform that supports smart contracts and decentralized applications. Visa will use Solana’s native token, SOL, as a bridge currency to facilitate the conversion of fiat currencies into digital assets and vice versa.
Visa’s move is a significant milestone for the adoption of blockchain technology and cryptocurrencies in the mainstream financial sector. Visa has been actively exploring the potential of blockchain and crypto since 2015, when it launched its first blockchain-based pilot project with Chain, a San Francisco-based startup. Since then, Visa has partnered with various crypto platforms and companies, such as Coinbase, Crypto.com, Fold, and Anchorage Digital, to offer crypto-related services to its customers and merchants.
Visa’s decision to use Solana as its cross-border payment network is based on several factors, such as:
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Speed: Solana can process over 50,000 transactions per second (TPS), making it one of the fastest blockchains in the world. Visa currently handles about 1,700 TPS on average but expects to see a surge in demand for cross-border payments as more people and businesses adopt digital assets.
Scalability: Solana can scale linearly with the number of nodes in the network, without compromising security or decentralization. This means that Solana can handle increasing volumes of transactions without increasing fees or congestion.
Interoperability: Solana supports interoperability with other blockchains and protocols, such as Ethereum, Binance Smart Chain, Terra, and Serum. This enables Visa to connect with a diverse range of crypto ecosystems and offer its customers more choices and flexibility.
Innovation: Solana is home to some of the most innovative projects and applications in the crypto space, such as Audius, a decentralized music streaming service; Star Atlas, a metaverse game; and Pyth Network, a decentralized oracle service. Visa can leverage these innovations to create new value propositions and use cases for its customers and merchants.
Visa’s cross-border payment solution using Solana will be available in select markets in the first half of 2024. Visa plans to expand the service to more regions and currencies in the future. Visa’s CEO, Alfred Kelly, said:
We are excited to partner with Solana to bring the benefits of blockchain and crypto to our global network of customers and merchants. Solana is a cutting-edge platform that offers speed, scalability, interoperability, and innovation. We believe that Solana can help us deliver faster, cheaper, and more secure cross-border payments that will drive financial inclusion and economic growth around the world.
Visa has been experimenting with blockchain technology since 2015, when it invested in Chain, a blockchain startup that later became Interstellar. Chain developed an enterprise blockchain platform called Chain Core, which Visa used to create its own solution for business-to-business (B2B) payments, called Visa B2B Connect.
Visa B2B Connect is a network that enables financial institutions and their corporate clients to make fast, secure, and transparent cross-border payments. It leverages blockchain technology to reduce intermediaries, costs, and risks, and to provide end-to-end visibility and traceability of transactions. Visa B2B Connect was launched in 2019 and is now available in over 90 markets.
Visa has also partnered with IBM to integrate its blockchain platform, IBM Blockchain, with Visa’s global payment network, VisaNet. This collaboration allows Visa to offer new services and capabilities to its clients and partners, such as identity verification, data sharing, and smart contracts.
Visa has also recognized the potential of cryptocurrencies and digital currencies to transform the payments industry. The company has adopted a pragmatic approach to crypto, distinguishing between two types of digital assets: traditional cryptocurrencies, such as Bitcoin, and fiat-backed digital currencies, such as stablecoins.
Visa views traditional cryptocurrencies as digital gold, or assets that are mainly used for investment and speculation. The company does not see much role for these cryptocurrencies in its network, except for enabling users to buy and sell them using Visa cards or wallets.
On the other hand, Visa sees fiat-backed digital currencies as a new form of money that can be used for everyday payments by consumers and merchants. The company believes that these digital currencies can benefit from Visa’s scale, security, and reach, and that Visa can help bridge the gap between crypto and fiat.
To achieve this vision, Visa has been working on several initiatives to connect crypto and blockchain networks to its network of networks. These include:
Enabling crypto wallets and platforms to issue Visa credentials and offer Visa-powered services to their users. For example, Visa has partnered with Crypto.com, BlockFi, Fold, and Bitpanda to enable their users to spend their crypto balances using Visa cards at millions of merchants worldwide.
Enabling financial institutions and fintechs to offer crypto-related products and services to their customers using Visa’s infrastructure. For example, Visa has partnered with Anchorage Digital, a digital asset bank, to enable institutional clients to buy and sell digital assets using Visa’s settlement platform.
Supporting the development and adoption of stablecoins and central bank digital currencies (CBDCs) as a new form of payment. For example, Visa has integrated USDC, a leading stablecoin backed by the US dollar, into its network, allowing users to send and receive USDC payments without converting to fiat. Visa is also collaborating with central banks and regulators to explore the potential of CBDCs and how they can interoperate with existing payment systems.
Visa is committed to advancing the crypto and blockchain ecosystem by providing access, value, and innovation. The company is constantly exploring new ways to leverage these technologies to enhance its products and services, and to create new opportunities for its clients and partners.
Visa believes that crypto and blockchain are not only here to stay, but also have the potential to shape the future of money and commerce. By connecting these networks to its trusted network of networks, Visa aims to enable more people and businesses to participate in the digital economy.