Visa’s Big Move into Bitcoin
It’s been an eventful week for crypto
Quietly, Visa announced big news related to bitcoin recently. As the provider of the world’s most widely-used credit cards, it has the opportunity to make a big impact on the cryptocurrency market.
Visa announced plans for a crypto software program to help banks roll out bitcoin and cryptocurrency buying and trading services. The company recognizes the interest in digital assets and will allow users to buy and sell cryptocurrencies.
“We set out to make Visa the bridge between digital currencies and our global network of 70 million merchants and today we are the leading network for crypto wallets with 35 crypto platforms choosing to issue with Visa. With this pilot program, we want to extend the value of Visa to our neobank and financial institution clients by providing an easy bridge to crypto assets and blockchain networks.” — Jack Forestell, chief product officer, Visa.
This software will allow banks to offer bitcoin-based services. The actions Visa is taking today will help them become a major play in the cryptocurrency market. It will also help the market grow, as many more will now have access to cryptocurrency services.
Bitcoin, and other cryptocurrencies, have become popular assets in the past year. It is viewed as a hedge against inflation, after the massive stimulus packages and actions taken by the Federal Reserve to combat the pandemic.
Cryptocurrencies have also made many realize the future is digital. Digital currencies are becoming more common and accepted, especially as barriers to use keep decreasing.
Visa will also make it easier to earn bitcoin. They are offering the first bitcoin rewards credit card. Instead of points or miles, you can now get bitcoin rewards for your purchases.
Visa teamed up with BlockFi for this card. It is expected to be available by spring to U.S. residents in all states except New York. Cardholders can earn 1.5% cashback on all purchases that will automatically be converted to bitcoin and placed into a BlockFi account every month. There is a $200 annual fee for the card though.
Allowing people to earn bitcoin without even having to think about it is a great way to increase familiarity with the asset.
An important note from their earnings call is that Visa CEO, Alfred Kelly, sees two classes of digital assets. The first is traditional cryptocurrencies, like bitcoin or ethereum. The other is fiat-backed, including stable coins and central bank digital currencies.
This distinction will be important for the future. Traditional cryptocurrencies, like Bitcoin, are decentralized and have no central authority. As digital assets grow in usage, governments may generate their own cryptocurrencies, the central bank digital currencies. These, like the dollar, for example, aren’t as impervious to manipulation and inflation as traditional cryptocurrencies.
Back in October, rival Paypal announced plans to allow its 346 million users to buy and spend bitcoin and other major cryptocurrencies. It may only be a matter of time until Bitcoin and other cryptocurrencies are accepted by all payment systems.
In case you missed it, Elon Musk stole the bitcoin news this week, when it was reported that Tesla is buying $1.5 billion in bitcoin and plans to accept it as a form of payment. You can read more about that from fellow Yard Couch editor Isaiah McCall.
