Litecoin, the cryptocurrency that is positioning itself as a medium for payments, jumped by as much as 32% on Wednesday after news broke that it would launch LitePay, a payments processor, on Feb. 26. At 5:17 UTC, it was trading at $226.46, up 25.4% from its price 24 hours earlier. The surge helped Litecoin breeze past the $200 mark, a figure that it last touched a month ago. (See also: Why Litecoin Is Vastly Underrated.)
In an email to CNBC, LitePay CEO Kenneth S. Asare said merchants in 41 countries -- including the U.S., U.K., China, Japan, and Germany -- will have access to LitePay merchant payment processing. (See also: How Do You Mine Litecoin?)
The LitePay website provides two reasons to conduct transactions in Litecoin. First, it transfers the volatility risk arising from Litecoin’s price from merchants to payments processors. Second, it provides holders of Litecoin more “liquify” in the short-term with their debit cards, meaning they will be able to conduct transactions anywhere in the world and in any currency with their debit cards.
“Our goal is to create a way for merchants to earn Litecoin, which is a particularly good cryptocurrency for payments,” Asare told CNBC. The cryptocurrency has tied up with Visa Inc. (V) for the LitePay Visa card, which will be accepted at all outlets that accept Visa.
Litecoin was also identified by Microsoft Corp. (MSFT) as one of the building blocks for creating a unique and new decentralized digital identification for services on the Internet.
“Some public Blockchains (Bitcoin [BTC], Litecoin, Ethereum, to name a select few) provide a solid foundation for rooting DIDs, recording DPKI operations, and anchoring attestations,” the company wrote. (See also: Microsoft Will Use Blockchain To Build New Digital Identity.)
Finally, the cryptocurrency is also set to undergo a fork on Feb. 18 that will create Litecoin Cash, a new payments coin. While the project is not backed by the Litecoin Foundation, the name association was enough to fuel valuations for the cryptocurrency.
The fork will provide each litecoin holder with 10 coins of litecoin cash. Iqbal Gandham, managing director of eToro, said the fork would “help miners use their equipment more efficiently.” He cited the development as another reason for the boost in the cryptocurrency’s price.
Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns small amounts of bitcoin.