What do dinosaurs think about an approaching asteroid? Or the better question: what are they going to do about it?
Today, the CEO of Visa Alfred Kelly has shared his vision on a fast-evolving world of cryptocurrencies. Speaking to the CNBC host in “Mad Money,” Kelly said that crypto does not pose any big risks to the payment system in short or middle terms. In January this year, Kelly while speaking at the National Retail Federation conference, assured that his company won’t process cryptocurrency-based transactions, but as for now, it looks like the CEO has decided not to make fateful statements, promising that if crypto “start moving from being more of a commodity to actually really being a payment instrument," his company will even consider entering the cryptocurrency business.
Speaking about the whole company Kelly most probably forgot the words of his Chief Financial Officer. Earlier in March, Vasant PRABHU called Bitcoin and other digital assets a bubble and a money laundering tool, adding that “every crook and every dirty politician in the world, I bet, is in cryptocurrency”, but “it’s very hard to get dirty money through a banking system”. He also shared the opinion of his neighbors from Silicon Valley, they think that he is a dinosaur.
If crypto doesn’t look so attractive for Visa, the technology behind it does.
Among the recent announcements, the company is planning to launch a blockchain-based service that offers digital identity. Visa B2B Connect will see the light in the first quarter of 2019.
Speaking about Visa’s contender, the Mastercard, Kelly appreciated the efforts of the payment system and called them a formidable competitor.
But there is one thing at least that Ajay Banga, Mastercard CEO and the CFO of Visa can agree on. In his speech during the “New India Lecture" Banga made in July this year, he said that cryptocurrency is a "junk". In his opinion, 95% of all illegal transactions on the dark web, that includes child prostitution, drugs, credit card, and social security fraud, are paid with crypto.
Mastercard seems to play wiser. The same as Visa, while scolding the new type of payments the company prefers to benefit from DLT, but with the new patent Mastercard filed yesterday, the company is looking further and prefers to stay ready for the future. The new patent will apply the principles of fractional backup banking for the cryptocurrency. With this solution, the payment processor plans to allow merchants to interact with what it calls “blockchain currencies” using the new method of simultaneous storage of fiat and crypto.
Among the other steps two companies have made in the same direction is the restrictions regarding the holders who carry out operations with cryptocurrency, ICO, as well as binary options, Forex, contracts for difference (CFD), came into force. Mastercard updated its policy on October 15, while Visa is planning to introduce similar measures in December.
All companies that operate without a license or their activities do not require its presence, and are participants in such transactions, fall into the category of “high-risk securities traders”. This implies a more thorough control of transactions while the processing of chargebacks can now take up to 540 days after the date of the transfer.
It's been, as always, the hypocritic play of payment industry titans. Since crypto turned out to be another bread and butter for them, they are pulling the whole industry to the ground but just enough to keep it going. It wouldn't be an exaggeration to expect from them to discover newer ways to make more money by implementing regulations and manipulating the market according to their agendas.
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