Visa chief executive officer Alfred Kelly has said that cryptocurrencies are not a significant threat to his company’s electronic payments hegemony. He nevertheless indicated that the legacy financial intermediary may move into handling cryptocurrency if there is an incentive to do so.
Also Read: Japan Approves Self-Regulation of Cryptocurrency Exchanges
Kelly: Cryptocurrency More a Commodity Than Payment Instrument
Speaking to CNBC Mad Money’s Jam Cramer on Oct. 25, Kelly said cryptocurrency is more of a commodity than a payment instrument as it stands. But, in the event that the technology gains traction as a payment system and becomes more like a fiat currency, Visa is willing to claim its stake.
“We want to be in the middle … of every payment flow in the world regardless of how it happens or what the currency is behind it. So if we have to go there, we will go there. But right now, it’s more of a commodity than a payment vehicle,” Kelly said.
The interview was given short shrift by cryptocurrency enthusiasts, sceptical of legacy financial institutions eyeing rewards from an industry they have always resented. To proponents of decentralized currencies, it is untenable that corporations such as Visa should be willing to scuttle the foundational ideas of censorship-resistant cryptocurrency just to get their share.
Bitcoin was created to challenge the conventional financial system and return the ownership of money to the people, whereas Visa and Mastercard, essentially the traditional banks of the internet, uphold the status quo and support institutional alliances while earning billions of dollars from punitive fees.
Credit and debit card providers generally charge fees that can rise to as much as 3.5 percent of every transaction. That compares with transaction fees of less than $0.10 for most cryptocurrencies, regardless of the amount transacted.
Financial Giants Should Not Bring Institutional Baggage to the Cryptosphere
Kelly’s indication that his company will move in if cryptocurrency becomes more of a fiat currency implies technological appropriation rather than a progressive vision. By pitching up middlemen in blockchain, the legacy institutions may bloat the cryptocurrency world with unnecessary costs and undermine the original vision of financial freedom and inclusion.
Visa’s rival Mastercard has been more proactive in its involvement with the technology. The U.S. company recently acquired patent promises to allegedly reduce the confirmation time for cryptocurrency transactions from the usual ten minutes to nanoseconds through a mechanism that utilizes existing systems for fiat currencies. Such a mechanism is certain to be highly centralized and permissioned however, should it ever see the light of day. Mastercard is also supposedly looking to address security concerns by setting up refund services for cryptocurrency transactions.
In spite of his company’s complicity in identical crimes, Mastercard CEO Ajaypal Singh Banga has criticized cryptocurrency for supposedly attracting criminals such as terrorists and money launderers. Like traditional banks, Mastercard and Visa have not shied away from handling money as an instrument of political control and from an overt ideological position. The case of Wikileaks founding editor Julian Assange, who began soliciting donations in bitcoin after his Mastercard and Visa accounts had been frozen, comes to mind.
Instead of weaponizing money as an ideological prefect, politically agnostic cryptographic technologies facilitate financial freedom. It is vital that the financial giants such as Visa and Mastercard do not bring their institutional baggage to the blockchain, arriving late to shore up their profits and add further layers. As one bitcoiner tweeted in response to Alfred Kelly’s comments, “Sorry Visa, we’re deprecating the middle.”
What do you think about the comments of Visa’s CEO? Share your thoughts in the comments section below.
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