2018-10-26 16:59 |
The CEO of financial services giant Visa recently said that cryptocurrencies are not a significant threat. Al Kelly backed up his statements by saying that Visa will not be entering the crypto sector anytime soon. Talking to CNBC host Jim Cramer on Mad Money, he said that Visa would wait for digital currencies to become established payment instruments.
When Will Visa Enter the Crypto MarketsKelly told Cramer that cryptocurrencies are “certainly” not a threat “in any way,” at least in the short and medium term. He added that crypto markets would have to mature and become more established as payment systems before Visa ventures into digital assets. He noted:
“I think there has to be some market that it becomes somewhat like a fiat currency in order for us to be comfortable.”
He explained Visa’s stance on digital coins further, saying that the company will explore digital currencies when they believe they have started transforming from being commodities to “actually really being a payment instrument.”
Adding to his previous statements, he commented:
“If it goes in that direction, we will move in that direction. We want to be in the middle, Jim, of every payment flow in the world regardless of how it happens or what the currency is behind it. So if we have to go there, we will go there. But right now, it’s more of a commodity than a payment vehicle.”
The Reason Behind Visa’s Crypto Shy PolicyVisa deals in fiat currency based payment systems. This currency is issued and backed by governments of different countries, and the exchange rates of these currencies are not as volatile as crypto coins. Cryptocurrencies, on the other hand, are not issued by any government authority. They are based on a new technology called blockchain. Some cryptocurrencies are based on physical commodities like gold and silver while others are considered to have inherent value because of their underlying blockchain mechanism.
There are a handful of digital currencies known as stablecoins that are issued against the US Dollar and other fiat currencies. An example of such a coin is the recently released Gemini Dollar (GUSD). The stablecoin derives its name from its stable value. Each coin is pegged against the US Dollar 1:1 and the entities that release these coins claim to maintain fiat reserves in proportion to the number of coins issued.
Visa CEO Al Kelly Doesn’t Consider Crypto a Big Threat, New Interview was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.
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