Visa CEO Al Kelly doesn’t see cryptocurrencies posing a threat to Visa in the near future, and said that the financial services giant won’t get into the cryptocurrency business until they become more traditional payment instruments, CNBC reported on October 25, 2018.
Visa Not Keen on Crypto Investments Just yet
Despite Mastercard’s unexpected push for a patent outlining “fractional reserve banking” for crypto assets, financial services giant Visa doesn’t seem to be rushing into digital currencies just yet.
During an October 25 episode of CNBC’s Mad Money, Visa CEO Al Kelly spoke with host and former fund manager Jim Cramer and discussed the company’s future in crypto.
Kelly said that cryptocurrencies do not pose a threat to Visa in the near term, but that the credit card firm is prepared to implement crypto-friendly systems if the digital currencies become more established.
“I think there has to be some market that it becomes somewhat like a fiat currency in order for us to be comfortable,” Kelly said in the interview, adding that crypto was not a threat to Visa in the short to medium term “in any way.”
Visa CEO Al Kelly speaking to Mad Money’s Jim Cramer
Kelly did say that a sign of the market being big enough to warrant the company’s focus would be when digital currencies start moving from being more of a commodity to being a real payment instrument.
He told Cramer that when the market does move in the direction of cryptocurrencies, Visa will follow, as the company strives to be in the middle of every payment flow in the world regardless of how it happens or what the currency is behind it.
A Good Year for Visa
Kelly’s comments do not come as a surprise regarding how well the company performed this year. According to CNBC, Visa delivered better than expected earnings for the third quarter, despite many saying that digital coins threaten processing firms.
The overall crypto market is volatile, with the segment losing approximately $18 billion in value in October 2018 alone.
Visa’s plans to enter the cryptocurrency industry once the market stabilizes might be a response to competing for firm Mastercard’s dabbling in the blockchain business. The latter has filed a patent for blockchain to be used in the management of fractional reserves, where loans could be made multiple times that of the amount deposited.
Coinbase and Circle, two stalwarts of the crypto space, have also announced a joint venture on October 23 to promote U.S. dollar-backed digital coins known as “stablecoins” to offer viable payment alternatives to bitcoin.