Visa wants to intermediate Bitcoin.
Speaking on Fortune’s Leadership Next podcast on March 16, Visa CEO Al Kelly said the payment processing giant intends to bring Bitcoin onto the Visa network, making it easy for customers to spend and buy with their cryptocurrency.
“We’re trying to do two things,” Kelly said. “One is to enable the purchase of bitcoin on Visa credentials.”
The second, he added, is “working with bitcoin wallets to allow the bitcoin to be translated into a fiat currency” that can be immediately “used at any of the 70 million places around the world where Visa is accepted.”
The company’s goal, said Kelly, is to preserve its intermediary role as digital assets see mainstream adoption.
Which is about 180 degrees away from what Satoshi Nakamoto’s goal was for Bitcoin, which is intended to disintermediate the existing financial system.
The very first sentence of the Bitcoin whitepaper describes it as “[a] purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
Cuy Sheffield, the financial giant’s head of crypto, said roughly the same thing as Kelly back in December when the financial giant partnered with Circle to make it possible for Visa card-issuers—mainly banks—to integrate the USD Coin stablecoin onto their card offerings so that cardholders and merchants can send and receive payments in USDC.
Visa, Sheffield said at the time, continues “to think of Visa as a network of networks.” He added:
“Blockchain networks and stablecoins, like USDC, are just additional networks. So we think that there’s a significant value that Visa can provide to our clients, enabling them to access them and enabling them to spend at our merchants.”
In the podcast, Kelly said that along with Bitcoin, Visa would focus on stablecoins, saying that he believes there is “a strong potential for those to become a new payment vehicle.”
Stablecoins, he continued, “are currencies that are fiat-backed, but we’re allowing this translation, if you will, into a fiat currency and in a wallet where there’s a Visa card.”
Which means that to the customer, a stablecoin- or Bitcoin-capable Visa card can be used to pay for goods and services with stablecoins or crypto. But the merchant will only see a fiat payment.
To make this happen Kelly said Visa has partnered with about 35 cryptocurrency companies.
On the flip side, in February, Visa partnered with First Boulevard, an online bank focused on financial empowerment in the Black community, to test a Visa-built API that would offer customers the ability to buy, hold, and trade digital assets from within the bank’s own website or app.
Mastercard does crypto too
Visa’s announcement comes about a month after Mastercard revealed plans to support some cryptocurrencies directly on its network—paving the way for consumer-to-merchant transactions using digital assets.
To a certain extent, Mastercard had no alternative but to act, saidRaj Dhamodharan, the company’s executive vice president of blockchain and digital asset products. He said:
“Whatever your opinions on cryptocurrencies—from a dyed-in-wool fanatic to utter skeptic— the fact remains that these digital assets are becoming a more important part of the payments world.”
Mastercard acknowledged that the rollout of support for cryptocurrencies will involve a substantial amount of work, not least because of concerns over regulatory compliance and consumer protection.