Visa, a global financial services company, has been instrumental in driving the adoption of digital assets by integrating conventional payment cards with cryptocurrency exchanges. Akshay Chopra, Visa’s Vice President, Head of Innovation and Design, highlighted the significant role Visa cards have played as a bridge between fiat currencies and cryptocurrencies during a panel discussion at the Blockchain Economy Dubai Summit.
Chopra emphasized that although cryptocurrencies are gaining popularity, they are not yet widely used for everyday transactions, such as purchasing a cup of coffee at a cafe. To address this challenge, Visa entered into partnerships with 75 of the largest cryptocurrency exchanges in 2021, enabling them to issue Visa cards. This strategic move expanded the network to include approximately 80 million Visa merchants, providing cryptocurrency users with the ability to use digital assets for payments. According to Chopra, this initiative, which has not been widely publicized, facilitated $3 billion in payment volume in 2021.
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Chopra sees such collaborations between traditional financial institutions and the cryptocurrency ecosystem as an opportunity to drive adoption and integration of digital assets into the broader Web3 landscape.
Furthermore, the settlement of payments between financial institutions represents another area ripe for disruption and innovation through blockchain-based solutions. Chopra noted that existing protocols like the SWIFT payment system have limitations, including operational hours. He explained that banks conduct trillions of dollars in transactions daily, but there is a cut-off time for international transactions. This limitation poses challenges and inefficiencies. To address this, Visa conducted a pilot project with Circle using USD Coin (USDC). This initiative allowed various cryptocurrency exchange partners to settle payments with USDC at any time of the day, providing a cheaper, 24/7, and innovative alternative to traditional methods. Visa secures these USDC funds on the Ethereum blockchain.
Despite the potential of blockchain technology and cryptocurrency-based payments, regulatory hurdles remain a challenge for mainstream financial institutions. However, Chopra pointed out that progressive regulatory environments in regions like the United Arab Emirates have been more beneficial to industry participants than reactive regulations in countries like the United States. He commended jurisdictions that engage with the industry to develop forward-looking regulatory frameworks that anticipate future needs.
In April 2023, Visa made headlines by launching a crypto product roadmap aimed at encouraging mainstream financial institutions to adopt stablecoins and public blockchain payments. The company is also planning to invest $100 million in Visa Ventures to explore innovative artificial intelligence-powered products and solutions focused on payments and commerce. Visa’s active involvement in the cryptocurrency space underscores its commitment to shaping the future of digital payments and financial services.
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