Visa Partners With Crypto Exchange FTX To Offer Debit Cards In 40 Countries
Visa is betting that investors will still want to spend their digital currencies even though their prices have been falling this year.
The payments giant is working with the global exchange FTX to offer debit cards in 40 countries, with a focus on Latin America, Asia, and Europe. The cards, which are already available in the U.S., will connect directly to a user’s FTX cryptocurrency investing account. “Like you would with any bank account,” says Visa’s CFO, the move lets customers spend digital currencies without moving them off an exchange.
“Even though prices have gone down, there is still steady interest in crypto,” Visa CFO Vasant Prabhu told CNBC in a phone interview. “We don’t have a position as a company on what the value of cryptocurrency should be, or whether it’s a good thing in the long run — as long as people have things they want to buy, we want to facilitate it.”
Since their all-time highs in November, the prices of bitcoin and other cryptocurrencies have dropped by half. As of Friday morning, the price of Bitcoin was near $20,000, which is 57% less than it was in January.
It’s Visa’s latest move into the space, and it brings the total number of crypto partnerships to more than 70. The company based in San Francisco has already teamed up with FTX’s competitors Coinbase and Binance. Mastercard, which is a competitor, has been on a similar roll, teaming up with Coinbase on NFTs and Bakkt so that banks and merchants in its network can offer crypto-related services. American Express has said that it is looking into how stablecoins, which are tied to the price of the dollar or another fiat currency, could be used with its cards and network. But AmEx’s CEO said earlier this year that customers shouldn’t expect a crypto-linked card “anytime soon.”
Unusual partners
Sam Bankman-Fried, the CEO of FTX, said that there was some irony in these partnerships. At first, cryptocurrencies like bitcoin were made to avoid banks and other middlemen. But banks and payment companies are embracing the technology all of a sudden as cryptocurrencies become more popular and help increase the number of payments.
“It’s a technology that we absolutely see disrupting traditional payment networks,” Bankman-Fried told CNBC in a phone call. “There’s a decision you have to make as a traditional payments company: do you want to lean into this or do you want to fight against it? I like that many of them are putting their weight behind it.”
Bankman-Fried also said that allowing card payments was important for the market to grow beyond being a speculative asset or, for some, a store of value. The partnership between Visa and Mastercard makes it easier for merchants to accept cryptocurrencies without having to set up their own technology. Visa and FTX change it for you behind the scenes. “Everything is done behind the scenes,” Prabhu said.
Both executives said that the biggest opportunity is in emerging markets, where currency volatility and inflation make access to digital assets more appealing than it might be in the U.S. Bankman-Fried pointed to Turkey and Argentina, where inflation is over 83% and 78%, respectively.
“Many of these things like are potentially cool and valuable in the United States but more so when you look globally,” Bankman-Fried said. “That’s where you’ll find places with really poor alternatives for payment rails and huge demand for something better.”
Visa’s Prabhu pointed to the demand for stablecoins, which are tied to the price of the dollar or another fiat currency. The CFO said that people often open accounts to hold crypto “and use those like they would a bank account.”
Even though the technology is becoming more popular and big companies like Visa are using it, the industry has had some high-profile blowups this year. Lenders Celsius and Voyager went bankrupt after freezing withdrawals, and the failure of hedge fund Three Arrows Capital took billions of dollars off the markets in a matter of days. The CFO of Visa said that so far, the company has not had to deal with a crypto crisis.
“Nothing is risk-free, so you do the best you can,” Prabhu said. “So far, our risk controls and due diligence have worked well.” “For the most part, we’ve been fostering innovation while keeping the Visa brand safe.”
