Visa is the “bridge” between payments and Blockchain technologies: responsible for cryptocurrencies | video

We welcome Visa’s head of cryptocurrency, Kai Sheffield, to the show. Welcome, it’s great to be here. Thanks for having me. Thanks for sitting there while we did our little puppet show. Is fantastic. All right. So we’re at the 2024 consensus. Uh Tell us about what your experience has been so far. This is the second day. What were the vibes like for you? Is fantastic. I think there’s a lot of energy and momentum. We’re really excited to see what developers are building and, and really, how much, you know, Blockchain technology has started to mature and how the infrastructure has improved and you know, a lot of different payments use cases, you know, that you think that stablecoins, which you know, can help enable this. And so it’s been great to interact with a lot of customers, a lot of companies and partners in the payments ecosystem who are all researching and exploring how Blockchain technologies can be used to improve payment flows. Now Visa is one of the most important companies for payments of any kind in the world. And you’ve been there for a while as the head of crypto, I’m wondering from a couple of years ago, how have the conversations changed between then and now internally, like the ideas that you’re championing for the projects that you’re pushing, like Has the inside of a visa changed over time? So we’ve been making really steady progress, you know, consistently every week for five years now. And we actually built the crypto team in the depths of the bear market in late 2018, early 2019. And so our approach was really based on a long-term view. Uh Visa is said to be concerned with any technology that has the potential to improve payments. And so we wanted to take our time, you know, figure out how we could use these technologies to support, you know, our partners. Uh And, you know, we started experimenting with stable coins. We started doing a lot of research and a lot of training, you know, for our customers. And our goal is to continue making consistent and steady progress over the next decade. Uh And we’re really excited about the opportunities that particularly stable coins can offer five years for bulls and bears. It was a nice setup. We didn’t know that we were going to do this with our puppets, um internally. Has there ever been any pushback from anyone who challenged you during the bear market? For example, should we put time and effort into building this industry that seems to be quite unstable? I don’t think we’re, we’ve been really fortunate to be part of a company that has a culture that, you know, from the very beginning, from the early days of Visa and, you know, Dee Haw, you know, going back to the sixties, you know , recognize that value will be digitized. It’s going to move across a lot of different networks, and we want to be the single point of connection for customers, you know, to move value to a lot of different places in a lot of different payment flows. Uh And so we recognize that, you know, cryptocurrency prices are volatile. We don’t really care about the pricing, we care about the underlying technology and the ways in which it can be implemented within the payments ecosystem, but it takes time to do it and you have to do it in a client controlled, you know, secure way. Uh And so we’re really here for the long haul and we’ve continued to make steady progress, you know, despite current market cycles in a recent research paper on visas, I believe you and your colleagues have found that multi trillion dollar stability coin market, only a fraction of them are actually used by real people in terms of payment, I think 100 and 49 billion or some figure like that, which is a large number, but it is, it is not representative of the stable use of coins all in all. What do you think it will take to increase that number and increase the actual adoption of stablecoins as an appropriate means of payment. So, first of all, we think one of the unique aspects of stablecoins is the fact that you could see all the data, you know, on the chain. And so we’ve invested a lot of time and resources and how to understand the on-chain data and understand how stable coins are used. Uh And so we partner with AM Labs, we created a seen dashboard on chain analytics.com. And it was really this exercise of, you know, we use internally on chain data. Uh, you know, it answers some questions, it opens up a lot of other questions and we wanted to make it available as a free public tool and resource for our clients, for politicians, for the media. And you know, we started with these adapted transactions, you know, metric, you know, trying to filter out transactions that appear to be initiated, you know, by bots or as part of smart contracts. It’s not perfect. Uh So we’re not saying that’s it, that’s the end of it. But we think there’s so much opportunity that the industry can really use on-chain data to, you know, better understand how people are using stablecoins. And for us it’s not like stable coins are used by consumers to buy coffee. Its stablecoins are used for things like large-value B-to-B payments. Uh cross border, you know, peer to peer. Uh And so I think we’re just at the point where we’re crossing the divide between consumers who are already in the crypto space, trading crypto on an exchange using stable coins, you know, paying other people in crypto for there’s an infrastructure that can enable for mainstream consumers, particularly outside the United States in emerging markets, to pay each other, to pay companies in many of these flows, on the rails of Blockchain, but there’s still a long way to go. Um, we’re excited to figure out how we can partner with existing companies in the payments ecosystem to start integrating stable coins in unique ways. And we think it should be both together. It is neither a traditional payment network nor a stablecoin. Will it be how they can interact with each other to improve payments? Tell us something more about it. What is Visa’s role in the future of stablecoins? Yes. So we see ourselves as a bridge between Blockchain technology stablecoins and the existing payments ecosystem. One of the things we’re doing is investing in how we can use stablecoins within some of our core products. You know, for example, when you tap to pay with a Visa card, it’s immediately authorized and you could walk out of the store. But there’s a lot of things that have to happen in order for the money to move from the issuer of that card, you know, to the merchant bank on the other side. And so we started experimenting with stablecoins like us cc that run on blockchains like solana to give our customers the ability to settle with us, you know, on a Blockchain. So we can receive stable coins, you know, into an account that we have in a circle, we can then convert them, you know, to pay in fiat to the choir merchant. And so I think we have such a broad and diverse network of traditional financial institutions, fintechs and crypto companies. We are trying to understand how the visa can be a bridge so that not all those companies adopt stable coins and blockchain at the same time, let’s meet them where they are. If they want to use stablecoins, great, we could support it. They operate in traditional fiat. We’ll handle conversions, you know, within it. So we’re excited to see how we can play that role, that bridging role. And this reminds me that before the contestants I cut my hair before the conference, like we all do. Uh, my barbershop only takes cash. I said, oh, it was just about the fees because often small businesses don’t like credit cards because of the fees. He said no, it’s actually not because of taxes. It’s because on Fridays, if I get paid by credit card, I can’t go to the bank to withdraw the money because the banks are closed. So I’m wondering how Visa is thinking about actually helping small businesses use and realize that stable coins could allow for instant settlement and could accept digital payments. Uh and you don’t have to worry about things like banks closing on weekends. Yes. So, there’s a lot of things that we’re doing across the company trying to accelerate, you know, how quickly we can get money, particularly for small businesses. You know, we have a product called Visa Direct that you could do, push payments and be able to have a small business, get money straight to their debit card over a weekend. And so we don’t think that it’s just stable coins. We believe stablecoins have potential and, on the back end of existing Visa products, could potentially move money faster. But we believe there are many ways the payments ecosystem will continue to evolve and drive revenue by getting small businesses where they need them faster. It seems that Visa is focused when it comes to cryptocurrencies on stable coins. I have to ask you in 2022. I was so excited when I heard that Visa had trademark applications for things like NFTS and Metaverse and, and wallets. Uh what’s up with those? Is there any focus on this? They have been put aside while you focus on stablecoin research dashboards and look at how a visa can work with stablecoins. So we continued to follow the NFT ecosystem and the broader creator economy. Um, we think it’s definitely evolved and changed. And I think, you know, when we started, you know, exploring, experimenting with NFTS, NFTS were really only on blockchains like Ethereum and they were quite expensive to run and, you know, there was an ecosystem of, you know, the fine art that people were, collected. Now, I think some of the changes that we’re starting to see are around a lot of NFTS use cases like things like loyalty. You know, you can now mint NFTS for fractions of cents. And so we’re seeing interesting experiments with things like digital receipts and loyalty programs where if you own an NFT, you can get a discount on several purchases. And so, you know, the culture that we have is really trying to learn by doing and, you know, working with customers around proof of concepts. We have a visa consulting and analytics business where issuers and merchants have come to us to say, how do we incorporate NFTS into a loyalty program? And so we’re absolutely still interacting with the ecosystem and experimenting. I think we’ve just seen a lot of the use cases for NFTS evolve a little bit from where they were a few years ago, but overall, we’re still really excited about the broader economy and the role that blockchains could play within it. Hi, thank you so much for joining us this morning. We hope you enjoy the rest of the conference. Thanks for having me. It was great. That was the head of Visa’s Crypto Kai Sheffield.

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