Visa is getting behind digital currencies and blockchain

How will the finance landscape evolve with the growing influence of blockchain and digital currencies?
27 July 2020

Visa is exploring the role of blockchain and digital currency in finance. Source: Shutterstock

  • Visa has announced support for the development of blockchain and digital currency ecosystem
  • The legacy finance company shared goals and developments in enlisting next-gen payment technology

Payment titan Visa has announced its support and development of blockchain and digital currencies. The financial services company wrote in a blog post, “we’re reshaping how money moves across the globe, and that means pursuing a broad array of technologies and partnerships.

“In that regard, digital currencies offer an exciting avenue for us to continue doing what we do best: expanding our network-of-networks to support new forms of commerce.”

The post entitled “Advancing our approach to digital currency” narrates the company’s efforts and plans to venture further into blockchain and cryptocurrencies, tying in the relevance of its pursuit as the world moves forward with digitalization in the finance industry.

With more consumers and businesses adopting digital currencies and circulation spreading wide, reaching over US$10 billion in May, Visa is aiming to tap into this space and avoid falling behind from competitors.

Prior to Visa’s announcement, the United States Office of the Comptroller of the Currency released an official letter stating national savings banks and federal savings associations are now allowed to provide cryptocurrency custody services for customers.

Acting Comptroller of the Currency, Brian P. Brooks, stated, “from safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers today.

“This opinion clarifies that banks can continue satisfying their customers’ needs for safeguarding their most valuable assets, which today for tens of millions of Americans includes cryptocurrency.”

Hence, legacy finance companies like Visa are declaring their support of digital currencies and blockchain.

Visa clarifies that its primarily looking to help connect its network of financial firms, merchants, and consumers to adapt to an emerging payment sphere powered by blockchain and digital currency.

The payment company explained its years of research in blockchain-inspired solutions aim to bring next-gen digital transactions to life.

“Our research team has been exploring the science of blockchain technology for several years. Today their research is focused on new mechanisms to improve scalability and enable offline digital currency transactions.”

Meanwhile, Visa promises to “maintain a rigorous focus on data protection, consumer privacy and fairness, and full compliance with all applicable laws” in its endeavor in blockchain and digital currency ecosystem. 

Blockchain in payments

To date, central and commercial banks have been keen to tap into new technologies such as blockchain and cryptocurrencies that were once deemed to be a threat. Financial institutions are increasingly acknowledging the potentials of blockchain in turbocharging cross-border payment and saw vigorous measures that need to be taken.

For instance, the European Central Bank (ECB) and the Bank of Japan (BOJ) teamed up to study and experiment with the concept of distributed ledger technologies (DLT) in a financial aspect. The project aimed to lay out the foundations for the design and safety features of DLT in finance, driving initiatives of cross-border payment services further. 

Tech giant IBM has illustrated the capability of blockchain to turn cross-border payment into a reality. Last year, the tech firm announced the arrival of a blockchain network for cross-border payments.

Marie Wieck, General Manager, IBM Blockchain, shared the news: “We’ve created a new type of payment network designed to accelerate remittances and transform cross-border payments to facilitate the movement of money in countries that need it most.”