Bitcoin has risen from being something so obscure almost no one had heard about, to a word which is now widely understood in languages and cultures all over the world. Sadly, this doesn’t mean you can yet spend Bitcoin all over the world, but based on some recent announcements from behemoth payment processor Visa, widespread Bitcoin usage may not be as far off as you think it is.
Are Visa and Bitcoin Rivals?
Despite how you may see the two technologies, Visa and Bitcoin are truly rivals when it comes down to it. They are both payment processing systems which take fees from users for their use. While Visa fees go to banks, employees, and the company itself, Bitcoin fees go to the miners who spend their time running the rigs needed to mine the coin. And this explains why Visa is suddenly on the Bitcoin bandwagon, because it recognizes the rising popularity of the technology and they, wisely, want to harness its users before anyone else.
January 2021 Announcement
Last month, Visa CEO announced that it would be launching a pilot program in a partnership with Anchorage bank, to allow its users to make everyday purchases using a Bitcoin card. And Visa isn’t just going to support Bitcoin, the CEO plans to also incorporate a number of altcoins, as well as some stablecoins. In order to offer these, Visa has partnered with Crypto.com, BlockFi, Bitpanda, Fold, and a number of other cryptocurrency exchanges and providers.
As crazy as this may sound, it’s already in motion, as Visa recently announced a coming Coinbase Visa card which will allow users to spend cryptocurrencies directly from their Coinbase accounts. And the best part? Users could earn rewards in Bitcoin for using their cryptocurrency card to pay, similar to credit card rewards which are currently offered with most cards. And Coinbase isn’t the only one, Binance, Fold, and BlockFi all currently offer a cryptocurrency rewards debit card via Visa.
What This Will Do
Visa is one of the world’s largest payment processors with over 61 million merchants worldwide. If they truly design and offer a product where cardholders could spend their cryptocurrencies at most points of sale, this would change the entire cryptocurrency scene. Currently, cryptocurrencies aren’t as popular as they could be because you can buy them, hold them, and trade them with your friends, but it is quite difficult to spend them anywhere. Visa offering it as a card payment option will drastically change this fact.
Not only will cryptocurrency finally be spendable on a daily basis, but it also might experience some stability as people around the world can begin to use it for their everyday purchases. This will also change the world, as there will finally be a currency which doesn’t require any conversions. For those of you who travel frequently, this will transform your life completely—you will no longer be losing money constantly in cross border currency exchanges.
There are some concerns among the hardcore cryptocurrency enthusiasts at the involvement of Visa in the space. This is because the whole purpose of Bitcoin is to not spend cryptocurrency which one doesn’t have, and that there is no governing body overseeing the coin. With Visa monitoring payments for users, this ruins a bit of the decentralized aspect. And if Visa offers cryptocurrency credit cards, it’s likely cryptocurrency could add to the nation’s debt problem rather than working to help solve it.
So, What’s The Hold Up?
Well, just because Visa made an announcement doesn’t mean they have all their ducks in a row. One of the major problems they are currently facing is US lawmakers and policies which have listed a number of cryptocurrencies and transactions as illegal. Of course, Visa has quite a bit of lobbying power, so there’s no doubt there will probably be some upcoming policy changes in DC—especially after the state of Wyoming recently made cryptocurrencies legal currency just a few years ago.
But that brings up another issue, President Biden has just taken office, and he has yet to make clear his administration’s policy on cryptocurrency. If his cabinet and himself have a negative view of it, it’s unlikely a positive cryptocurrency law will be passed. But he hasn’t made any announcements yet, so it’s still a waiting game.
Bitcoin’s Scalability Issue
Another issue which Visa will have to conquer is the long-dreaded Bitcoin scalability issue. Although Bitcoin just released the Schorr/Taproot update, this is still a cryptocurrency which take minutes to process a transaction. Visa can process a transaction in seconds. It’s unclear how Visa plans to solve this issue, as they could be planning to use something similar to the lightning network where they allow someone to spend their coins all day then settle the balance at the end of the night. Who knows, they haven’t announced it yet.
Will This Effect Bitcoin Price?
Bitcoin price is impossible to predict, even with large announcements like this. But if the past is any indication of the future, it likely will, as when similar announcements were made by PayPal and CashApp, Bitcoin price spiked soon afterwards. Although Visa could eventually contribute to the stabilization of Bitcoin, for the moment, it remains as volatile as ever, and that probably isn’t going to change anytime soon. One thing is for sure, Visa, like its competitors, will likely have to purchase a large amount of Bitcoin soon, or perhaps they already have, either way it’s unlikely that Bitcoin price is going to zero any time soon.
Whether it launches or not, Visa planning to add cryptocurrency technology to its platform is simply the next payment processor which is adapting following Square and PayPal, which both announced adoption plans last year. And the fact that all of these companies are integrating the coin into their platforms just goes to show that cryptocurrency is well on its way to being widely accepted and it probably a decent investment.
Overall, it’s great that Visa is trying to enter the cryptocurrency space in order to make the technology more mainstream. Although there is some controversy, and some bumps in the road for Visa, they will likely be successful in their endeavors, and be the first major cryptocurrency card company. And this could mean an extremely bright future for cryptocurrencies as whole.