Visa, the world’s largest credit card company, is widely regarded as being hostile to Bitcoin. It would seem intuitive that a traditional financial provider should look unkindly on anything that threatens its hegemony. Publicly, though, the company has had very little to say about Bitcoin, preferring to focus on matters within its own domain. In a CNBC interview on Wednesday, the corporation’s CEO broke his silence, opining – predictably – that Bitcoin is not a payments system.
In an interview on Wednesday, recorded at New York’s National Retail Federation conference the previous day, Kelly was pressed for his thoughts on Bitcoin. “I don’t view it as payment system player,” said the CEO. “We at Visa won’t process transactions that are cryptocurrency-based. We will only process fiat currency-based transactions.”
This tallies with the actions of Visa subsidiary Wavecrest, which cut off debit card services to dozens of European crypto card companies less than a fortnight ago. At the time, Visa denied that it was striking back at the threat posed by cryptocurrencies. The company was adamant that it was irregularities on behalf of Wavecrest clients that triggered the ban.
Given that it processes more than 100 billion transactions a year versus bitcoin’s circa 130 million, it’s premature to assert that Visa is feeling threatened by cryptocurrency. Whatever bitcoin is, be it a store of value or a medium of exchange, it is not, as yet, a Visa killer.
Visa stated that the crypto cards had been suspended due to “continued non-compliance with our operating rules”, and insisted it wasn’t part of a targeted campaign against cryptocurrency. Many in the crypto community weren’t so sure, and Alfred Kelly’s comments this week will only bolster their suspicions. They arrived on the same day that the US Treasury described cryptocurrencies as an “evolving threat”, whose undersecretary for terrorism and financial intelligence made the usual noises about bitcoin and terrorism.
“My take is that bitcoin is much more today a commodity that somebody could invest in; and honestly, somewhat of a speculative commodity,” Kelly told CNBC. Given that bitcoin has been unspendable for everyday purchases for some time on account of high fees, this is an argument that carries merit. While alternatives such as bitcoin cash can be used for peer-to-peer transactions and micro-payments, the cryptocurrency market as a whole has yet to threaten Visa’s supremacy.
Corporations exist to protect their own interests, and the CEO of Visa was never going to exhort the world to start buying bitcoin. Cryptocurrency companies intent on bridging the gap between fiat and crypto will know what they have suspected from the start: they’ll need to do so without the support of Visa and its global subsidiaries.