Per a report from CNBC, crypto exchange FTX will expand its cooperation with payment giant Visa. The partners will take their crypto debit cards from the United States to over 40 countries and millions of users and merchants worldwide.
This new cooperation will be focused on providing payment alternatives to emerging markets. In that sense, FTX and Visa are targeting users in Latin America, Asia, and countries in Europe.
The crypto debit card allows people to use their digital assets and cryptocurrencies, such as Bitcoin and Ethereum, to purchase items and conduct everyday transactions. The card will be linked to the users' investing wallet and will be directly used in the cryptocurrency to pay at commerce or shop.
Visa will remove the friction from this process by converting the currency into U.S. dollars. Thus, the merchants can accept crypto without implementing extra hardware, or software, or taking additional steps. As the Chief Financial Officer (CFO) at Visa, Vasant Prabhu, said to CNBC: "everything is done behind the scenes”.
Despite the persistent downtrend in the crypto market, the price of Bitcoin has lost over 75% of its value from an all-time high of $69,000 and other cryptocurrencies have followed, Visa acknowledged that there is still a demand for digital assets.
Prabhu claimed that the payment company is attempting to meet that demand. Over the past two years, the company has consolidated around 70 partnerships in the crypto industry. Prabhu added:
Even though values have come down there's still steady interest in crypto. 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.
Talking about the nature of these cooperations, and the way traditional financial institutions are embracing crypto, the CEO of FTX Sam Bankman Fried admitted that there is some irony behind these deals. The number one crypto by market cap, Bitcoin, was created for people to circumvent banks.
Now, Morgan Stanley, Goldman Sachs, and other major U.S. banks are offering investment tools based on BTC and cryptocurrencies to their clients. In many cases, the banks have set up trading desks to jump into the market themselves and Visa and Mastercard are partnering with crypto exchanges. Bankman Fried said:
It's a technology that we absolutely see disrupting traditional payment networks. 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 respect the fact that many of them are leaning into it.
The FTX CEO believes that digital assets will transition from speculative assets to payment tools or stores of value with new use cases. The Visa partnership is an important step in that direction.
In Latin America and other emerging markets, cryptocurrencies are already a major part of people's everyday lives. Some use them as banks, others as a way to send and receive remittances, and many as a payment method to hedge against their local currencies' high levels of inflation. Bankman Fried added:
Many of these things like are potentially cool and valuable in the United States but more so when you look globally. That's where you'll find places with really poor alternatives for payment rails and huge demand for something better.