Amid the ongoing crypto bear market, VISA (NYSE: V) is taking a risk by betting that cryptocurrency investors will continue to utilize their holdings for day-to-day purchases despite the recent price declines.
Indeed, the world’s largest payments network is joining up with a global crypto exchange FTX to roll out debit card services in forty different nations, with a particular emphasis on Latin America, Asia, and Europe, as per a CNBC report on October 7.
The cards already available in the U.S. will provide instant access to a user’s FTX cryptocurrency investing account. According to Visa’s CFO, the move enables clients to spend digital currencies without transferring them off an exchange “like you would with any bank account.”
“Even though values have come down there’s still steady interest in crypto. We don’t have a position as a company on what the value of cryptocurrency should be, or whether it’s a good thing in the long run — as long as people have things they want to buy, we want to facilitate it,” said Visa CFO Vasant Prabhu.
Visa continues to make inroads into crypto
This is Visa’s most recent move into the industry, bringing the company’s total number of crypto partnerships to over 70. The business, which has its headquarters in San Francisco, has previously collaborated with FTX’s rivals Coinbase and Binance.
Competitor Mastercard (NYSE: MA) has been on a similar collaboration spree, partnering not just with Coinbase on NFTs but also with Bakkt to enable financial institutions and retailers in its network to provide cryptocurrency-related services.
Sam Bankman-Fried, CEO of FTX, recognized an element of irony in these partnerships. Bitcoin and other cryptocurrencies were first developed as a means to circumvent traditional financial institutions and intermediaries.
But banks and payment businesses have all of a sudden begun to embrace the technology as cryptocurrencies become more prominent and contribute to increased payment volume. “It’s a technology that we absolutely see disrupting traditional payment networks,” said the FTX CEO.
The partnership is necessary to expand the market
According to Bankman-Fried, accepting card payments is essential to expanding the market beyond its current role as a speculative asset or, for some, a store of wealth. The cooperation makes it simpler for businesses to accept cryptocurrency without using their own proprietary systems.
Both Executives believe that the most significant potential is in emerging markets, which, because of factors such as currency instability and inflation, make it more desirable to have access to digital assets than it may be in the United States. Bankman-Fried pointed the finger at Turkey and Argentina, two countries with inflation rates that have surpassed 83% and 78%, respectively.