The integration of conventional payment cards with cryptocurrency exchanges is playing a crucial role in driving the adoption of digital assets, according to a Visa executive.
Speaking to Cointelegraph reporter Ezra Reguerra during a panel at the Blockchain Economy Dubai Summit, Visa’s vice president, head of innovation and design, Akshay Chopra, highlighted the role that Visa cards have played as a bridge between fiat currencies and cryptocurrencies in recent years.
According to Chopra, using cryptocurrencies as a means of payment for everyday items like a cup of coffee at a cafe is still not ubiquitous. To tackle this challenge, Visa partnered with 75 of the biggest cryptocurrency exchanges in 2021 to allow them to issue Visa cards.
This opened up a network of some 80 million Visa merchants that could, by extension, serve customers who prefer to use cryptocurrencies as a means of payment. Chopra tells Reguerra:
“Building that bridge alone in 2021 facilitated $1 billion of payment volume.”
Chopra highlighted this as one of several opportunities for conventional financial institutions to tap into the wider Web3 ecosystem.
Related: Visa taps into Solana to widen USDC payment capability
Payments settlement between financial institutions remains another avenue ripe for disruption and innovation through blockchain-based solutions. Chopra says existing traditional payment methods still have limitations, including not being fully functional 24 hours a day:
“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.“
Akshay highlights a pilot carried out with Circle using USD Coin USDC
$1.00, which enabled a number of cryptocurrency exchange partners to settle payments with USDC at the end of a given day:
“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.”
Regulations remain a hurdle for mainstream financial institutions to truly tap into blockchain technology and cryptocurrency-based payments. However, Akshay believes that progressive regulatory environments in jurisdictions like the United Arab Emirates have benefited industry participants more than reactive regulations in less crypto-friendly jurisdictions.
“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 made headlines in April 2023 with the launch of a crypto product roadmap to drive the adoption of stablecoin and public blockchain payments by mainstream financial institutions.
The company is also set to invest $100 million to explore innovative artificial intelligence-powered products and solutions focused on payments and commerce through Visa Ventures.
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