Crypto Cards Drive $3B Payment Volume in Recent Exchange Deals, Says Visa Executive
The integration of traditional payment cards with cryptocurrency exchanges is playing a pivotal role in fostering the widespread adoption of digital assets, according to Akshay Chopra, a vice president and head of innovation and design at Visa. Chopra emphasized the significance of Visa cards as a bridge between fiat currencies and cryptocurrencies during his discussion with Cointelegraph reporter Ezra Reguerra at the Blockchain Economy Dubai Summit.
According to Chopra, using cryptocurrencies for everyday purchases, such as a cup of coffee at a cafe, is not yet a widespread practice. In order to address this challenge, Visa partnered with 75 of the largest cryptocurrency exchanges in 2021 to enable the issuance of Visa cards. This collaboration created a network of approximately 80 million Visa merchants capable of serving customers who prefer to use cryptocurrencies as a means of payment. Chopra revealed:
“Building that bridge alone in 2021, and these numbers haven’t really been made public, facilitated $3 billion of payment volume.”
Chopra highlighted this as just one of the many opportunities for traditional financial institutions to immerse themselves in the broader Web3 ecosystem.
Enhancing Payment Settlements with Blockchain Technology
Aside from facilitating payments, Chopra noted that blockchain-based solutions also have the potential to disrupt and innovate payment settlements between financial institutions. Existing protocols, such as the SWIFT payment system, still have limitations, including restricted functionality to specific hours of the day. Chopra explained:
“Banks have trillions of dollars of transactions with each other at the end of the day, but there is a cut-off time where you simply cannot transact internationally. It’s a big pain point, and it’s also expensive and inefficient.”
Chopra shared the success of a pilot project conducted with Circle using USD Coin (USDC), which allowed several cryptocurrency exchange partners to settle payments using USDC by the end of each day. He highlighted the advantages of this approach:
“It’s cheaper than traditional methods, it happens 24/7, and it’s innovative. You send the USDC balance, and Visa custodies the funds on the back end of the Ethereum blockchain.”
Regulatory Hurdles and Progressive Environments
While regulations pose challenges for mainstream financial institutions to fully embrace blockchain technology and cryptocurrency-based payments, Chopra believes that progressive regulatory environments, like that of the United Arab Emirates, have been more beneficial compared to reactive regulations seen in other countries, such as the United States. He stated:
“When they set up regulatory frameworks, they invited the industry to talk about what it needs, but also what the future might look like in a few years so that regulations are developed well ahead of time.”
Visa’s Push for Crypto Adoption
Visa made headlines in April 2023 with the launch of a cryptocurrency product roadmap aimed at driving the adoption of stablecoins and public blockchain payments within the mainstream financial sector. The company is also planning to invest $100 million in exploring innovative artificial intelligence-powered products and solutions focused on payments and commerce through Visa Ventures.
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