Visa and Lloyds Test Stablecoin Settlement Across Borders
Visa and Lloyds Banking Group have successfully completed a proof-of-concept for cross-border settlement using USDC, a dollar-pegged stablecoin. The experiment, which ran over seven days, processed $75 million in payment obligations, with funds arriving at Visa in under an hour on weekends.
The test involved verifying the process of settling payments through financial institution-to-institution transfers using USDC. The two companies used existing settlement procedures alongside the stablecoin, evaluating processing speed, transparency, and operational impact.
According to Lloyds, it purchased USDC from digital asset exchange Archax, which operates under UK regulations, and settled the funds through its Jersey branch to Visa in the United States.
The companies claim that using stablecoins for settlement provides a 24-hour option for financial institutions, reducing the need for weekend or holiday wait times. This could lead to improved liquidity management for banks and businesses by making it easier to track and manage payment flows.