Visa users spend $1bn of cryptocurrencies in first half of 2021

California-based payments company is joining forces with more than 50 cryptocurrency firms

More than $1 billion was spent by Visa users on products and services through cryptocurrency-linked cards globally in the first six months of the year, the company said on Wednesday.

The global payments technology business also said it is joining forces with more than 50 cryptocurrency companies to let users frictionlessly convert and spend their digital currencies through its card programmes.

Visa's strategy to support digital currencies is simply to serve as a bridge between the crypto ecosystem and our global network of 70 million merchants
Akshay Chopra, head of innovation and design at Visa for CEMEA

This agreement will give cryptocurrency holders with Visa cards the ability to spend at nearly 70 million merchants globally, even at those that do not accept digital currencies.

“Visa's strategy to support digital currencies is simply to serve as a bridge between the crypto ecosystem and our global network of 70 million merchants and 10,000 financial institutions,” Akshay Chopra, vice president and head of innovation and design at Visa for Central Europe, Middle East and Africa told The National.

“We just crossed the $1bn mark in spend on various crypto-linked programmes ... of course, that is only a small fraction of the total Visa card spend … but considering these programmes didn't exist in any significant way a year ago, it is an indication that they are slowly gaining traction.”

Industrial cooling fans operate to thermally regulate illuminated mining rigs at the CryptoUniverse cryptocurrency mining farm in Nadvoitsy, Russia, on Thursday, March 18, 2021. The rise of Bitcoin and other cryptocurrencies has prompted the greatest push yet among central banks to develop their own digital currencies. Photographer: Andrey Rudakov/Bloomberg

Some of Visa's partners in the cryptocurrency market include Circle, BlockFi and Coinbase, the cryptocurrency exchange that floated on the Nasdaq market in April. These agreements help Visa card holders spend from their cryptocurrency wallets at various merchants.

Visa is also working closely with various central banks to help them think through many considerations on how Central Bank Digital Currencies should be designed and how they could be integrated into the existing payment ecosystem.

“Cryptocurrencies have started to look like an evolution of money ... we want to ensure that our processes, products and solutions keep up with this evolution so that these new forms of money can be used in a safe, secure and reliable manner,” said Cuy Sheffield, vice president and head of crypto at Visa.

“Crypto is not just one thing, it is a general-purpose technology … that is leading to new innovations such as Bitcoins, Stablecoins, NFTs [non-fungible tokens] and CBDCs.”

Stablecoins allow users to convert their dollars into crypto dollars which can then be transferred easily to someone else’s crypto wallet. They make public blockchains useful as payment networks.

NFTs – a method of owning digital assets recorded on the blockchain – are evolving to become an innovative tool for digital media.

An employee inspects machines for the production of bitcoins and lightcoins at the "CryptoJuniversóe" mining centre during a presentation of the centre for the crypto currency in Kirishi on August 20, 2018. - A Russian company opened on August 20, 2018 what it said was the country's largest cryptocurrency mining unit, in a former Soviet fertilizer-producing laboratory. The opening comes as Russian authorities seek to regulate the booming cryptocurrency sector. Russia is in third place after China and the United States in the ranks of cryptocurrency-producing nations since 2015, according to a study published at the end of last year by Ernst & Young. (Photo by OLGA MALTSEVA / AFP)

Rival payments company Mastercard is also reportedly planning to offer support for some cryptocurrencies on its network this year. It already allows its customers to carry out cryptocurrency transactions, but outside the company’s formal network.

Visa said it had no plans to add any cryptocurrency to its own balance sheet, as companies such as Tesla have done this year.

“We don’t hold cryptocurrencies on our balance sheet today. We hold currencies on our balance sheet that we need to run our business,” Visa’s chief financial officer Vasant Prabhu told CNBC on Wednesday.

“We hold currencies that we get paid in or we pay people in. That tends to be the dollar, euro, pound. So we don’t have plans to hold cryptocurrency because it’s not typically the way we get paid or the way we pay people.”

Updated: September 21st 2021, 7:59 AM