Despite a surge in their popularity in recent years, cryptocurrencies have yet to be adopted as a mainstream payment method. But the nexus between traditional payment cards and cryptocurrency trading platforms—is causing a sharp uptick in the adoption of digital assets, a Visa executive said.
Visa wins big
Speaking at the Blockchain Economy Dubai Summit, Akshay Chopra—Visa CEMEA vice president, head of innovation and design—said Visa cards are acting as a bridge between fiat currencies and cryptocurrencies. Notably, Visa teamed up with 75 of the biggest crypto exchanges in 2021, enabling them to issue Visa cards.
This, in turn, allowed some 80 million Visa merchants to cater to the needs of customers who’d rather use cryptocurrencies as a means of payment, according to Chopra. He revealed that the crypto cards have since facilitated a whopping $3 billion payment volume.
“Building that bridge alone in 2021, and these numbers haven’t really been made public, facilitated $3 billion of payment volume,” Chopra said. He emphasized that the flourishing Web3 industry is ripe with exciting opportunities for conventional financial institutions.
Unlocking the potential of blockchain technology
One of the areas to tap into, Chopra says, is payment settlement between financial institutions as existing protocols like the SWIFT payment system have a number of shortcomings—such as not being available 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 its also expensive and inefficient.”
Chopra pointed out that world’s second-largest stablecoin issuer Circle had previously launched a USD Coin (USDC) pilot, allowing several crypto exchanges 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 USDC balance and Visa custodies the funds on the backend of the Ethereum blockchain,” he said.
Crypto thrives under progressive regulatory regime, says Chopra
The remarks by the Visa executive come at a time when regulatory scrutiny in some countries is smothering the growth of blockchain technology and crypto-based payments. Case in point—the U.S., which ranks lower than India, Nigeria and Vietnam in 2023 Chainalysis Global Crypto Adoption Index.
According to Chopra, the crypto industry and stakeholders would flourish more under a progressive regulatory regime like that of the United Arab Emirates (UAE) as compared to a reactive regulatory environment in countries like the U.S.
Visa took the crypto community by storm in August 2023 when it allowed users to pay on-chain gas fees with their Visa cards. Not long before, the company had floated the idea of a self-custodial crypto wallet—using which users can automatically settle their phone and utility bills. In September, the payment solutions giant partnered with Solana blockchain for stablecoin settlements, a move that reflected Visa’s commitment to blockchain technology.
