Visa company (Fifth – Free Report recently partnered with well-established US blockchain technology company ConsenSys to build an infrastructure to ensure the seamless integration of central bank digital currency (CBDC) networks into traditional financial service providers.
To encourage the widespread adoption of central bank digital currencies, which are usually issued and regulated by a country’s monetary authority or central bank, Visa has a CBDC payments module in place. The module is intended to facilitate the above-mentioned integration. To explore the unit’s potential, the teams at Visa’s Global Crypto Advisory Practice and Digital Currency Innovation Center have plans to begin working with central banks and financial institutions on experimental and prototype real-world use cases from Spring 2022.
Now, thanks to the latest partnership, Visa’s platform will derive the benefits of enterprise blockchain technology after incorporating it into the ConsenSysCodefi CBDC sandbox (powered by the ConsenSys Quorum open source protocol layer).
The latest move appears to be timely given the emergence of many digital currencies, which hold promising growth prospects amid the increasing penetration of the internet and the availability of advanced technologies such as blockchain. Amidst a rapidly growing digital economy, Visa is striving to integrate blockchain technology with its global payment platform. The main reason is the crucial role of blockchain in envisioning new asset classes ranging from NFTs and stablecoins to CBDCs. Technology is paving the way for the rapid adoption of digital currencies by offering tools and enhancing user experience, for example, cards that consumers know to access new assets.
The Visa module can be useful for banks and issuer processors, as existing payment bars can be easily integrated with CBDC networks. As a result, they are equipped to issue CIB-linked payment cards and wallet credentials to consumers. For consumers, those with a CBI-linked Visa card can integrate it with a banking app and pursue quick payment experiences through a retailer payment terminal. Even those with a digital wallet, which contains CBDC funds and payment credentials, can opt for secure payments across 80 million merchant sites that accept Visa or its connected networks.
Visa has been wisely promoting the increased adoption of CBDCs. Apart from enhancing access to financial services, digital currency enhances the efficiency and security of transferring government payments directly to digital wallets for financially insecure individuals in a particular community. The currency also brings in many unbanked individuals who need a mobile phone in the burgeoning digital economy.
Having a trusted payment facilitator like Visa, which has more than 25 cryptocurrency wallets linked to its systems, reinforces the belief of individuals in the increased use of crypto and digital currencies. V committed to promoting new ways of moving money. The company works closely with more than 60 crypto platforms. In December 2021, Visa introduced a crypto consulting practice to guide financial decision-making for customers and partners who tend to use crypto products.
Similar to Visa, there are other companies including MasterCard Incorporated (MA – free report), PayPal Holdings, Inc. (PYPL – free report) and Block, Inc. (mint – Free report) to several initiatives to take advantage of the growing popularity of cryptocurrencies.
Mastercard is partnering with cryptocurrency platforms to take advantage of the growing number of consumers entering the crypto space. MA’s constant endeavors to offer digital currency wallets and a seamless exchange experience result in more consumers turning towards crypto cards to purchase digital assets or incur spending. In July 2021, Mastercard teamed up with a series of crypto companies in an effort to unveil a card offering and provide seamless cryptocurrency exchange, thus expanding the cryptocurrency ecosystem.
PayPal allows customers to trade crypto assets through its digital wallet. PYPL has an offering in a place called Checkout with Crypto, which facilitates online purchases with cryptocurrency. In August 2021, PayPal unveiled its cryptocurrency service in the UK, marking its entry into the country’s cryptocurrency market.
Block has made significant investments in buying bitcoin (a crypto asset) over the years. SQ’s entry into the bitcoin market with its Cash App product continues to contribute significantly to the company’s quarterly results. In the third quarter of 2021, the Cash App generated $1.8 billion in bitcoin revenue and $42 million in total bitcoin revenue, reflecting an improvement of 11% and 29% over the year, respectively.
Visa shares gained 6.7% over the year versus an industry decline of 13.9%. Visa currently holds a Zacks Rating of 3 (Hold). you can see The full list of Zacks #1 stocks (strong buy) today is here.
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While Mastercard stock gained 14.3% in the year, PayPal and Block stocks lost 24.5% and 39.9%, respectively, in the same time frame.