Visa Outlines Five Ways It’s Pushing into Crypto

In brief

• Visa wants you to buy and spend crypto.
• The payments company has partnered with crypto companies and financial institutions.
• Visa’s also eyeing central bank digital currencies.

Visa chairman and CEO Al Kelly said in a quarterly earnings call on April 27 that the company has ambitious plans for digital currencies.

“I would say that this is a space that we are leaning into in a very, very big way and I think are extremely well-positioned,” Kelly said.

But how, precisely, is Visa planning to pull off its grand crypto plans? Here are the five things Kelly said Visa’s focusing on.

1. Helping you buy crypto

First, Visa wants to make it easier for people to use Visa cards to buy crypto. In the earnings call, Kelly reported an increase in the volume of crypto purchases with Visa cards (from exchanges or peer-to-peer platforms, but didn’t say by how much.

Kelly described Bitcoin as “digital gold”; the coin is one of the company’s top priorities. On a Fortune podcast in March, Kelly said his aim is to make it possible for Visa customers to buy Bitcoin directly, and work with Bitcoin wallets to “allow the Bitcoin to be translated into a fiat currency.”

On the Fortune podcast, Kelly said that small businesses hurt by COVID could benefit from Bitcoin payments. “It is time for real change where everybody is accepted on equal footing, with no questions asked,” he said.

2. Helping you spend crypto

Second, Kelly said the payments giant eyes an opportunity in converting crypto to fiat, and using crypto for shopping. Instant conversions, said Kelly on the Fortune podcast, would mean that approximately 70 million merchants could accept Bitcoin as payment.

“And we’re the clear leader here,” said Kelly in the earnings call. We’ve got over 35 digital-currency platforms and wallets that have chosen to work with us.” He mentioned Coinbase, Crypto.com, BlockFi, Fold, and Bitpanda.

There’s certainly demand. In a March survey, Visa found that 25% of Latin Americans would like to experiment with cryptocurrency payments. Plus, 78% expect that new technology, including crypto, is likely on the way.

3. Crypto in everyday finance

Kelly said the third area for Visa is helping financial institutions and fintechs to offer crypto to their customers. He said the company has created APIs to allow customers of financial institutions to buy, store or trade digital currencies held by Anchorage.

Visa has also worked with First Boulevard, “a digital neobank.” The neobank’s mission is to promote generational wealth in the black community, and customers can buy and sell Bitcoin.

4. Settlement of crypto

Next up is the settlement of crypto.

Kelly boasted that Visa’s infrastructure lets financial institutions settle transactions in the US dollar-pegged stablecoin, USDC.

In December 2020, Visa partnered with Circle, the company that creates USDC along with Coinbase, to integrate USDC. Later, Visa conducted a trial with Crypto.com, which sent USDC to Visa’s Ethereum address at crypto custody service Anchorage. Visa announced on March 29 that the company completed its first USDC transaction on the Ethereum blockchain.

Settling in USDC adds to the 160 currencies the company transacts in each day, and the 25 currencies in which the company settles transactions each evening, Kelly said in the earnings call.

He added that that “settling in USDC is pretty similar to settling in U.S. dollars,” but the technical details differ and require working closely with crypto custodians..

5. Central bank digital currencies

Many central banks around the world are mulling the launch of digital versions of their fiat currencies. They’re known as central bank digital currencies (CBDCs). Visa wants to ride that wave, and is busy trying to source central banks as clients, Kelly said.

“We’re talking to central banks about the criticality of public-private partnership […] 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,” he said.

The company released a research paper in December 2020 that made the case for offline CBDCs. An offline payment system “creates an experience similar to physical cash,” said Visa in the paper. “But instead of paper in your wallet, it’s bits and bytes in your phone.”

In its next quarterly earnings call, Visa might disclose how those bits and bytes convert to dollars and cents.

Contributed by Decrypt.