- Payments leader Visa has partnered with Coinbase, Circle and BlockFi.
- On July 6, Visa and BlockFi launched a 2% Bitcoin Rewards Credit Card to 400,000 users in the US.
- Visa supports traders on regulated exchanges through crypto-linked card service.
Crypto linked card usage has topped $1 billion in 2021. Visa had estimated the usage in 2020 at a fraction of this. In an attempt to create an ecosystem that fosters the usage of cryptocurrency like any other currency, the payment giant launched a new Bitcoin Rewards Credit Card with BlockFi.
Payment giants drive crypto mainstream adoption
Visa CFO Vasant Prabhu explained that “more than $1 billion worth of cryptocurrency was spent by consumers globally on goods and services through their crypto-linked cards in the first six months of the year.”
Since cryptocurrencies are highly volatile, investors can perceive them as a major risk. However, that is not a hindrance to spending by card users.
Though Visa is keen on onboarding more users to its crypto-linked card programs, like its competition MasterCard, their stand on crypto is similar.
Both payment giants are enabling the use of cryptocurrency as a payment method by creating an ecosystem where users can pay through cryptocurrencies in their wallet, but they have been adamant on not recommending it to users in the first place.
Raj Dhamodharan, head of Digital Asset Products and Digital Partnerships at Mastercard, said:
Our philosophy on cryptocurrencies is straightforward: It’s about choice. Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value – traditional or crypto – however they want. It should be your choice, it’s your money.
An increase in demand for crypto linked cards
Initially, users would exchange cryptocurrency for the fiat of their choice in order to make a purchase. Now that payment giants like Viisa are issuing crypto linked cards, the burdens of paying with cryptos have significantly diminished.
This is a factor that is likely to increase the average transaction size in the future. Moreover, the rewards for using these types of debit cards are more lucrative when compared to traditional cards, which could possibly increase the number of users interested in the card.
Visa and rival Mastercard currently support crypto-linked card services only for cryptocurrencies with compliance measures that meet their requirements.
Prabhu suggests that Visa is bullish on cryptocurrency trade and exchange as it supports traders on regulated exchanges through its crypto-linked card.
We see a lot of volume on our [network] of people buying cryptocurrencies at these various regulated exchanges and as far as we can see that trend continues.
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