Approximately 40 percent of crypto owners surveyed in a new study by Visa said they were likely or very likely to switch their primary bank. As a result, the World’s largest card company just stepped up its efforts to take over crypto. The Visa Consulting and Analytics (VCA) division has announced the launch of a crypto advisory service for its clients and partners.
At a fintech conference last month, Visa’s head of crypto, Cuy Sheffield, declared that crypto was now “cool”. In August this year, it made headlines by purchasing CryptoPunk. However, its plans to launch a crypto consultancy show it is more concerned about capturing crypto market share than just marketing stunts. During the past 18 months, Visa’s partnerships with crypto platforms have doubled. Visa’s crypto-linked card programs have been used by consumers to spend about $3.5 million, up from $1 million in July.
Currently, Visa uses its network to facilitate the buying, selling, and custody of digital currencies. Furthermore, it offers a credit card that lets users earn Bitcoin from purchases and it also allows users to settle transactions on its payment network using USD Coin, a stablecoin cryptocurrency whose value is tied directly to the US dollar.
Toward that end, Visa announced yesterday that it had invested $60 million into blockchain compliance company TRM Analytics. Among the investors were American Express and Citigroup. The current fee-dependent business model of Visa and other card incumbents is threatened by crypto, which is threatening to replace them as the underlying payment infrastructure for the future.
In October, MasterCard launched its crypto rewards program, utilizing Bakkt as its custodian for digital assets. Visa doesn’t keep cryptocurrency in custody directly either, but partners with Anchorage Digital to do so – a company it first invested in in 2019. Sheffield said that Visa is building its crypto API platform on top of Anchorage so that other banks can use its custodial services.
We’ve been working hard on research on how CBDCs would provide consumer experiences and what infrastructure they would use. As we think there will be a number of countries who end up taking this path, we are using that expertise and engaging with central banks to help banks think about their role in preparing, Sheffield noted.
According to a Visa study released Wednesday, 94% of Americans are aware of crypto and nearly a third have used it as an investment or a means of exchange. In conjunction with the marketing services firm LRW, the research surveyed more than 6,000 people worldwide.
According to Sheffield, Visa’s crypto-linked debit card programs will grow in the next few years, as will the use of central banks digital currencies (CBDCs). The Atlantic Council says 87 more countries are considering CBDCs, despite only seven countries launching them to date. By assisting banks to develop CBDC-related products, Visa hopes to capitalize on this interest, Sheffield said.
