- Visa plans to venture into cryptocurrencies in a big way, with five different opportunities spotted for the taking.
- The payments giant will, among other things, provide crypto-related APIs to financial institutions, and allow settlement of payment via stablecoins and CBDCs.
- Visa has already upgraded its infrastructure to support payment settlement in stablecoins.
- It started settling payments in cryptocurrencies in March.
- It's the latest payments giant to venture into crypto after PayPal and Mastercard.
Visa CEO Al Kelly says the payments giant is moving into cryptocurrencies in a big way. Speaking during an earnings call on Tuesday, Kelly discussed the company’s ambitions to venture into the crypto market.
“We are leaning into this[cryptocurrencies] in a big way,” Kelly said.
The CEO says it plans to do so in different ways as part of its multi-pronged push into digital currencies. One of the ways the company is mulling a push into crypto is through central bank digital currencies or CBDCs.
CBDCs will be basically crypto coins issued and governed by central banks, an option that experts believe will be the mainstream model in the future. These are stable, just like stablecoins, a category of cryptocurrencies pegged on fiat currencies and thus, less volatile in nature than, say, Bitcoin.
Visa is working on a CBDC policy together with central banks and has applied a patent for a technology that would link financial institutions and central banks.
“Central bank digital currencies,” Kelly said, “could end up being quite valuable in countries where the infrastructure is unavailable or limited.”
“We’re talking to central banks about the criticality of public/private partnership and in particular the criticality of acceptance because for these central bank digital currencies to have value, they’re going to have to both be secure in the minds of consumers, and that’s something we have a long track record with and could help. And then secondly, obviously they have to have some form of utility.”
The adoption of crypto will enable users to spend their digital holdings and even purchase more. The payments giant will also provide crypto-related APIs to financial institutions and allow settlement of payment via stablecoins, which has started in March.
Visa is also inking deals with crypto exchanges like Crypto.com, Bitpanda, and the world’s first publicly traded crypto exchange Coinbase. The company has upgraded its infrastructure to support the settlement of payments in stablecoins.
Kelly says Visa has its eyes on five different opportunities in the market, which he believes is “extremely well-positioned.”
Payments Giants Push into Crypto
PayPal was one of the first payment companies to start allowing users to buy and sell cryptocurrencies. It launched the crypto feature in the US in November 2020 and has since allowed US customers to pay for goods and services via a new feature from millions of merchants.
Most recently, PayPal-owned payments service Venmo also launched a native feature for its 70 million-plus users to buy, hold and sell crypto.
Mastercard, Visa’s rival, is also preparing to allow customers to transact using select cryptocurrencies – majorly stablecoins. While Mastercard has partnered with several companies to launch crypto cards, it plans, for the first time, to allow crypto to flow through its mammoth payments infrastructure.