- In September 2021, Visa started working on a blockchain project to facilitate the adoption of CBDC and stablecoins, but very little progress has been made since then.
Cryptocurrencies known as stablecoins are anchored to the value of a fiat currency, a commodity, or some other item. As a result, a stablecoin’s value is directly correlated with the value of the underlying asset, which helps to mitigate the volatility that is frequently linked to other cryptocurrencies.
The central bank of a nation issues and backs Central Bank Digital Currencies (CBDCs) which are digital counterparts of fiat money. They can be used for online transactions, peer-to-peer payments, and other things. They are created to offer citizens a digital substitute for actual cash.
The leader of the world’s largest credit card company, Visa, is still optimistic that blockchain-powered solutions can be incorporated into its services and products to power the coming wave of payments.
AI Kelly, the departing CEO of Visa who will formally leave his position on February 1st, gave a quick overview of the company’s plans for private stablecoins and central bank digital currencies (CBDC) during a call with investors on January 24.
Kelly stated in a San Francisco Business Times article from January 21: “Even if it’s still very early, we continue to believe that CBDC and stablecoins have the potential to play an important role in the payments industry and we have a number of initiatives underway”.
The outgoing CEO stated, “As we attempt to invest in the payments ecosystem, we’ve had an inconsequential amount of investments in crypto funds and companies”. According to Kelly, the high-profile failures which shook the cryptocurrency industry in 2022 haven’t had an impact on Visa’s balance sheet.
Visa has been involved in several crypto-related projects over the years. Its research team started working on the Universal Payment Channel (UPC) initiative, a blockchain interoperability effort in September 2021. The goal of the project was to create a network of networks that would allow private stablecoins and CBDCs to move through different payment methods. However, Visa hasn’t offered an update on the UPC over the past 12 months.
Additionally, Visa recently launched a number of zero-cost bitcoin debit cards including one with Blockchain.com on October 26, and another with FTX.
Even though the data in Visa’s 2022 annual report only extended through September 30 – around five weeks before FTX failed – more details could be published during the company’s Q1 2023 earnings call on January 26.
On February 1, Ryan Mclnerney, the president of Visa, will formally succeed AI Kelly as CEO; Kelly will continue to serve as executive chairman. Mclnerney also seems to be similarly, if not even more optimistic about blockchain-based payment systems.
In a November interview with Fortune, Mclnerney stated that Visa is still looking into how to effectively utilize cryptocurrency payments and that there is still $14 trillion of cash out there being spent by consumers that can be digitized.
The CEO of Visa thinks that stablecoins and CBDCs might be significant players in the payments sector. Although stablecoins and CBDCs are still in their infancy, they have the potential to offer both consumers and companies a lot of advantages. Before these technologies can be extensively used, there are still issues that must be resolved. Governments, central banks, and corporations will need to co-operate to make sure that stablecoins and CBDCs are governed and used in a way that is secure and advantageous for all parties.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/01/25/visa-ceo-predicts-stablecoins-and-cbdcs-to-revolutionize-payment-industry/