Visa, the global payments juggernaut, is making significant strides in the world of cryptocurrencies and blockchain technology. Continuing its journey of exploring the potential of digital assets, Visa has recently announced its plans to expand its stablecoin settlement capabilities using the USDC dollar-pegged stablecoin and harness the power of the Solana blockchain. The company is set to launch pilot programs in collaboration with merchant acquirers Worldpay and Nuvei. This strategic move aims to revolutionize cross-border settlements, enabling faster and more efficient transactions while enhancing the overall user experience.
While the enthusiasm for altcoins may have dipped recently due to large cryptocurrency investors withdrawing funds, there is one cryptocurrency that continues to capture the attention and investments of institutional players: Solana (SOL). Over the past nine weeks, institutional investors have been directing capital into Solana, making it the 10th largest digital asset by market cap and a standout among altcoins. Amidst a backdrop of shrinking investments in cryptocurrency assets, Solana has managed to defy the trend and remains the apple of investors' eyes.
Visa's Ongoing Cryptocurrency Experimentation
Visa has been actively experimenting with cryptocurrencies and blockchain technologies for some time now. One of its notable collaborations has been with the Ethereum blockchain, aimed at expediting payment settlements through VisaNet, its proprietary system. This initiative has been a significant step in Visa's journey towards embracing the potential of blockchain for global payments.
Understanding the VisaNet System
VisaNet is the backbone of Visa's global payment processing infrastructure. It serves as the invisible force behind the scenes, facilitating the clearing, settlement, and transfer of billions of dollars in transactions daily between users' banks and merchants' banks. For most Visa cardholders, this process remains largely imperceptible, as they enjoy seamless transactions. However, Visa aims to further enhance this process by leveraging the capabilities of the Ethereum and Solana blockchains, in conjunction with stablecoins like USDC.
The Role of USDC, Solana, and Ethereum
In Visa's grand plan to improve cross-border transactions, USDC emerges as a key player. USDC, a stablecoin pegged to the US dollar, has gained prominence in the cryptocurrency world due to its stability and reliability. Subsequently, Visa intends to harness the power of this stablecoin, along with the Solana and Ethereum blockchains, to facilitate faster, more efficient cross-border settlements.
Visa's Chief of Cryptocurrency, Cuy Sheffield, elaborated on this strategy, explaining that the combination of USDC with Solana and Ethereum will streamline the process of moving money internationally. This innovation promises to deliver a more seamless and cost-effective experience for users while ensuring secure and swift transactions.
Building on Past Success: Visa and Crypto.com
Visa's current pilot programs have their roots in a successful partnership with Crypto.com, a cryptocurrency exchange. In 2021, Visa embarked on a pilot program with Crypto.com, using USDC to improve settlements on the issuance side. This collaboration also marked Visa's collaboration with the Ethereum blockchain for card-based payments in Australia.
Before this initiative, transactions made with Crypto.com cards issued in partnership with Visa used to take days to settle, often involving expensive international wire transfers. However, with the introduction of USDC and Ethereum, Visa succeeded in significantly reducing settlement times and costs.
Embracing Solana for Enhanced Efficiency
In their quest to further enhance settlement times, Visa has enlisted the services of Solana as a blockchain partner. Solana, known for its high throughput and low transaction fees, offers a compelling solution for Visa's USDC settlement operations between merchants and acquirers. By embracing Solana, Visa has become the first major payments company to leverage its capabilities, marking a significant milestone in the blockchain industry.
Cryptocurrency Investment Product Withdrawals
Meanwhile, a recent report from CoinShares, a European digital asset manager, revealed that the past seven weeks have witnessed a significant reduction in investments across various cryptocurrency investment products. This trend reflects a cautious sentiment among investors, potentially triggered by market volatility and regulatory concerns.
Solana Emerges as the Exception
In stark contrast to the overall trend, institutional investors have continued to show strong interest in Solana. CoinShares' report highlighted that over the past week alone, approximately $700,000 was invested in SOL through cryptocurrency investment providers. This influx of capital not only demonstrates institutional confidence in Solana but also solidifies its position as the "most loved altcoin amongst investors at present."
Year-to-Date Inflows Reflect Long-Term Confidence
The enthusiasm for Solana is not a fleeting trend. Year-to-date, institutional investors have channeled a significant $26 million into the cryptocurrency, underscoring their long-term commitment and belief in its potential. This substantial inflow stands in sharp contrast to other altcoins, where investors have been scaling back their positions.
Altcoin Comparisons
While Solana shines, other altcoins have experienced withdrawals. During the past week, investors withdrew $8.6 million from Polygon investment products and $3.2 million from Ethereum. These outflows signify a degree of uncertainty surrounding these assets, as investors reassess their positions.
Bitcoin Remains Resilient
Bitcoin, the largest digital asset by market capitalization, continues to attract attention as well. During the same period, investors directed $3.8 million into Bitcoin, emphasizing its status as a digital gold and a stable investment choice. Notably, investors have also been exiting short Bitcoin products for the 19th consecutive week, reflecting their confidence in its long-term prospects.
Price Overview
The positive development caused the price of SOL to jump during the past 24 hours according to the cryptocurrency price tracking website CoinStats. At press time, the altcoin was changing hands at $19.96 following a 24-hour gain of 3.61%. The latest positive price movement, however, was not enough to drag SOL’s weekly performance out of the red zone. Consequently, the cryptocurrency’s price was still down 7.98% for the week.
Price chart for SOL (Source: CoinStats)
SOL was able to break above the psychological $20 mark throughout the past day of trading, and reached a 24-hour high of $20.55. Traders most likely realized their profits shortly after the altcoin reached this peak - causing it to retrace to its current level. Nevertheless, SOL was still trading closer to its 24-hour high than its daily low of $19.23.
In addition to strengthening against the Dollar, SOL also outperformed the market leader Bitcoin (BTC) over the past 24 hours. Subsequently, SOL was up 3.28% against BTC. This meant that 1 SOL token was worth 0.00077531 BTC.
Technical Overview
Daily chart for SOL/USDT (Source: TradingView)
From a technical perspective, a symmetrical triangle chart pattern had formed on SOL’s daily chart. This specific chart pattern suggested that the cryptocurrency’s price may breakout in the coming few days.
If this breakout is towards the upside, then SOL’s price may flip the resistance level at $23.90 into support before continuing to rise to $34.60 over the following fortnight. Conversely, a negative breakout may lead to the altcoin retesting the crucial support level at $17.10.
Investors and traders will want to take note of the fact that a significant bullish technical flag was on the verge of being triggered on SOL’s daily chart. At press time, the daily Moving Average Convergence Divergence (MACD) line was attempting to cross above the MACD Signal line. Should these two technical indicators cross, it will signal that SOL’s bearish trend might be reversing - resulting in the altcoin’s price entering into an ascent.
Disclaimer: Coinpaper does not recommend that any cryptocurrency should be bought, sold, or held by you. Always conduct your own research and consult your financial advisor before investing in any digital asset.
