Visa's Role in Accelerating Digital Asset Adoption: A Look at the Crypto Integration Strategy
Summary:
VISA's VP of Innovation & Design, Akshay Chopra, discussed at the Blockchain Economy Dubai Summit how traditional payment cards can stimulate the adoption of digital assets in cryptocurrency exchanges, through a bridge between fiat currencies and cryptocurrencies. He emphasized on the limited mainstream usage of cryptocurrencies and hence, Visa collaborated with top-tier cryptocurrency exchanges to issue Visa cards, aiding in a three-billion-dollar payment volume. Yet, regulations still pose a challenge for the integration of blockchain technology in mainstream financial institutions. However, Chopra is hopeful about proactive regulatory approaches in jurisdictions like the United Arab Emirates.
The incorporation of traditional payment cards into cryptocurrency exchange services is a significant accelerator of digital asset adoption, states a VISA executive. During a discussion at the Blockchain Economy Dubai Summit, VISA's Vice President of Innovation & Design, Akshay Chopra, expressed to Cointelegraph reporter Ezra Reguerra that Visa cards function as a gateway, connecting fiat currencies and cryptocurrencies.
VISA's VP Akshay Chopra (right) and CBDC & digital assets associate director of Accenture, Vladimir Nikolenko (center), joined reporter Ezra Reguerra (left) to discuss the fusion of fiat and crypto. Chopra points out that there is a lack of mainstream usage of cryptocurrencies for everyday purchases such as a cup of coffee, thus, Visa partnered with top-tier cryptocurrency exchanges in 2021 to issue Visa cards. This collaboration extended the network to approximately 80 million Visa merchants to accommodate customers who prefer cryptocurrency transactions.
"By creating this bridge alone in 2021, it has resulted in a $3 billion payment volume," announced Chopra. He sees this as one of the numerous opportunities that traditional financial institutions have to engage in the broader Web3 ecosystem.
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He also identified an opportunity for innovative disruption in the settlement of payments between financial institutions, which could benefit from blockchain-based solutions. Despite its limitations, SWIFT remains a dependable payment system for now, as it does not operate 24/7.
Highlighting the inefficiency of the current system, Chopra said, "Banks have trillions of dollars of transactions between them by the end of the day, but there's a cut-off time restricting international transactions. This not only is a major inconvenience but also results in higher costs."
Chopra states a trial run partnering with Circle using USD Coin (USDC) facilitated cryptocurrency exchange partners to settle payments with USDC at the end of each day, proving to be a cheaper and innovative method that operates around the clock, which is facilitated on the Ethereum blockchain by Visa.
However, regulations present an obstacle for traditional financial institutions seeking to adopt blockchain technology and cryptocurrency-based payments. Nonetheless, Chopra believes that the UAE's progressive regulatory environments offer fair regulation policies attracting more industry participants than reactive ones like the United States. He emphasized that creating regulatory frameworks in advance benefits the industry in the long run.
"With the release of a crypto product roadmap in April 2023, Visa garnered considerable attention. The roadmap is intended to encourage mainstream financial institutions to adopt stablecoin and public blockchain payments. Additionally, Visa is preparing to invest $100 million in Visa Ventures to explore innovative payment and commerce solutions powered by AI," said Chopra.
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Published At
10/5/2023 8:42:03 AM
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