Visa is offering a new crypto debit card to their line of services.
Crypto exchange FTX is partnering with Visa to make it easier for people around the world to use digital currency for everyday purchases by launching a crypto debit card. The service, which is already available in the United States, will become accessible in 40 new countries with a focus on Latin America, Asia, and Europe. The partnership marks the latest in a slew of announcements, suggesting that financial institutes are continuing to move deeper into the crypto space.
Speaking to CNBC, Visa’s Chief Financial Officer Vasant Prabhu said the crypto debit cards will link directly to a user’s FTX investing account. The move will allow people to spend digital currencies without moving those off an exchange, thereby functioning like any bank account. “Even though values have come down there’s still steady interest in crypto,” Prabhu told the publication.
He added that while Visa doesn’t have a position 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, the company wants to facilitate it. The crypto debit card partnership comes as the price of Bitcoin and other digital currencies has been halved from their all-time highs in November.
According to CNBC, Bitcoin was valued at $20,000 in early trading on October 7th, down 57% since January. Despite the slump, the crypto debit card deal is Visa’s latest foray into the space, adding to its 70 existing crypto partnerships. The San Francisco-based firm has already joined forces with Coinbase and Binance. Mastercard has also teamed up with Coinbase on NFTs and Bakkt to let banks and merchants in its network offer crypto-related services.
Interestingly, FTX CEO Sam Bankman-Fried admitted that there is some irony in these crypto debit card partnerships since digital currencies were designed to skip over intermediaries. But banks and payment companies are now embracing the technology as these currencies become more mainstream, and help drive payment volume. “It’s a technology that we absolutely see disrupting traditional payment networks,” Bankman-Fried told CNBC.
He also explained that enabling crypto debit card payments were essential to the market’s growth beyond being a speculative asset. As such, the Visa partnership makes it easier for merchants to accept cryptocurrency without setting up proprietary technology. Visa and FTX convert it on their back so everything is done “behind the scenes.” Now, executives from both financial institutions said the biggest opportunity is in emerging markets.
This is because currency volatility and inflation in these regions make access to digital assets more attractive. Bankman-Fried used Turkey and Argentina as examples of places where inflation has topped 83% and 78%, respectively. Crypto debit cards are potentially cool and valuable in the United States but become more precious when you look globally. “That’s where you’ll find places with really poor alternatives for payment rails and huge demand for something better,” he explained.
Despite Fortune 500 companies like Visa embracing the technology with crypto debit cards, cryptocurrency has had some high-profile failures this year. Lenders Celsius and Voyager filed for bankruptcy after freezing withdrawals. And the collapse of hedge fund Three Arrows Capital resulted in billions being wiped out of the market in just a few days. So far, Visa has been able to avoid exposure to a crypto crisis.