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It looks like Visa is stepping in the niche that Facebook's Libra has identified, but couldn't fully explore due to regulatory pressure. It would be interesting

It looks like Visa is stepping in the niche that Facebook's Libra has identified, but couldn't fully explore due to regulatory pressure. It would be interesting to see if they can succeed at letting people and businesses efficiently settle transactions in cryptocurrency.

TheColorYellow 6y ago
Do you think there is a sufficient market for businesses looking to transact in crypto? I'm a big believer in the tech, but when I look today I still don't see how Visa really plays well with the current crypto market. There are almost no cryptocurrencies that actually have desirable cash-like qualities that would result in their use in the retail space which basically eliminates all B2C like options. CBDC or other forms of tokenization could be a big deal, but CBDC certainly isn't there yet, and despite some interesting initiatives I haven't yet seen a value add tokenized solution in the retail sector. Including in developing countries, existing solutions using traditional payment networks are still more desirable. There is the classic Innovators Dilemma where the new hot product will obviously underperform traditional products in the interim but eventually outperform them over the long term. I could see this happening in the developing world, but to my knowledge I have yet to see a product that seems to fit this mold.
- bananaquant 6y ago
  I think that cryptos are going to become more popular in the coming years with the ordinary people. As for the businesses — they don't want to own them, since they are not widely recognized currencies. When CBDCs come along, that would be a totally different story. They will be likely just made the official currencies of their countries. Having said that, I can see a case for payment systems to start transacting in existing cryptos, so long as they can satisfy the regulators. They already do that with different real-world currencies. When you have a card in one currency and a business charging you in a different currency, the payment processor does automatic conversion between them for you. With cryptos, everything works the same way, except there may be a crypto-exchange in the middle. The payment processor just needs to guarantee the delivery and some stable exchange rate. Admittedly, these are not pure crypto transactions. But businesses can already do those directly over blockchain. The major thing stopping them is that there are few other businesses who would accept crypto. Hopefully, payment processors adding support for cryptos could move everyone else to broader adoption.
  - hakfoo 6y ago
    I still think that the mainstream financial sector has more than a fighting chance against crypto. A lot of the features that cryptocurrency offers are primarily appealing to specific narrow categories of customers, who are very close to being bad actors on a broader stage. Your typical consumer isn't screaming about "I want an economic policy hard-coded into the currency so everyone's hands are tied when the economic-political situation changes" or resenting the fact that you can get fraudulent transactions reversed in most payment systems today. The things regular consumers like about crypto can be done as well if not better with a centralized infrastructure. Faster and cheaper transactions, and hassle-free cross-bank and international transactions are not exactly out-of-the-blue expectations. The current players are just hamstrung by business processes, and to a lesser extent, regulations, that date to the era of paper cheques and IBM 360s. And then, of course, the margins in charging $25 and taking 24 hours to push around less than a kilobyte of data.
    - wcoenen 6y ago
      > Faster and cheaper transactions, and hassle-free cross-bank and international transactions are not exactly out-of-the-blue expectations. I think a lot of these problems originate from the fact that deposits at banks exist only as records in the bank's database, and therefore can only really be moved between accounts at the same bank. To create the illusion of moving deposits between banks, another bank must accept to take on the liability in exchange for something else, something that can actually be moved between banks. This is what is referred to as "reserves", which is what we call the special money that only exists as records in the central bank's database. So we can think of deposits as "JP Morgan Chase dollars", "BoA dollars", "Wells Fargo dollars" etc. while the real money is the "reserve dollars" that cannot be acquired by individuals. Innovations like CBDC might put the reserve money directly into the hands of individuals and fix the issues that you mentioned. So that would mean that the central banks will be the ones with the fighting chance against crypto, not the private financial institutions.
      - flashyfaffe2 6y ago
        Agree with you. If I may add, this would be feasible only: If gov issued is own digital currency, which will mechanically would lead the value of the others digital currency worth near zero..
- biolurker1 6y ago
  I think you should spend sometime researching stable coins and why it's good for business
- searchableguy 6y ago
  I bought into HNS (handshake) hype. I think the only crypto currency I have used so far for real transactions and the motivation was ICANN. https://handshake.org https://handshake.org
vosper 6y ago
> It looks like Visa is stepping in the niche that Facebook's Libra has identified, but couldn't fully explore due to regulatory pressure As far as I know, Libra (called Novi, now? Or maybe that's just the wallet name) is still under development. They issued a new whitepaper recently that I read as very much directed at regulators - lots of acknowledgements of their concerns in the text. Which isn't to say it'll go anywhere, but maybe not dead yet.

TheColorYellow 6y ago

Do you think there is a sufficient market for businesses looking to transact in crypto? I'm a big believer in the tech, but when I look today I still don't see how Visa really plays well with the current crypto market. There are almost no cryptocurrencies that actually have desirable cash-like qualities that would result in their use in the retail space which basically eliminates all B2C like options. CBDC or other forms of tokenization could be a big deal, but CBDC certainly isn't there yet, and despite some interesting initiatives I haven't yet seen a value add tokenized solution in the retail sector. Including in developing countries, existing solutions using traditional payment networks are still more desirable. There is the classic Innovators Dilemma where the new hot product will obviously underperform traditional products in the interim but eventually outperform them over the long term. I could see this happening in the developing world, but to my knowledge I have yet to see a product that seems to fit this mold.

bananaquant 6y ago
I think that cryptos are going to become more popular in the coming years with the ordinary people. As for the businesses — they don't want to own them, since they are not widely recognized currencies. When CBDCs come along, that would be a totally different story. They will be likely just made the official currencies of their countries. Having said that, I can see a case for payment systems to start transacting in existing cryptos, so long as they can satisfy the regulators. They already do that with different real-world currencies. When you have a card in one currency and a business charging you in a different currency, the payment processor does automatic conversion between them for you. With cryptos, everything works the same way, except there may be a crypto-exchange in the middle. The payment processor just needs to guarantee the delivery and some stable exchange rate. Admittedly, these are not pure crypto transactions. But businesses can already do those directly over blockchain. The major thing stopping them is that there are few other businesses who would accept crypto. Hopefully, payment processors adding support for cryptos could move everyone else to broader adoption.
- hakfoo 6y ago
  I still think that the mainstream financial sector has more than a fighting chance against crypto. A lot of the features that cryptocurrency offers are primarily appealing to specific narrow categories of customers, who are very close to being bad actors on a broader stage. Your typical consumer isn't screaming about "I want an economic policy hard-coded into the currency so everyone's hands are tied when the economic-political situation changes" or resenting the fact that you can get fraudulent transactions reversed in most payment systems today. The things regular consumers like about crypto can be done as well if not better with a centralized infrastructure. Faster and cheaper transactions, and hassle-free cross-bank and international transactions are not exactly out-of-the-blue expectations. The current players are just hamstrung by business processes, and to a lesser extent, regulations, that date to the era of paper cheques and IBM 360s. And then, of course, the margins in charging $25 and taking 24 hours to push around less than a kilobyte of data.
  - wcoenen 6y ago
    > Faster and cheaper transactions, and hassle-free cross-bank and international transactions are not exactly out-of-the-blue expectations. I think a lot of these problems originate from the fact that deposits at banks exist only as records in the bank's database, and therefore can only really be moved between accounts at the same bank. To create the illusion of moving deposits between banks, another bank must accept to take on the liability in exchange for something else, something that can actually be moved between banks. This is what is referred to as "reserves", which is what we call the special money that only exists as records in the central bank's database. So we can think of deposits as "JP Morgan Chase dollars", "BoA dollars", "Wells Fargo dollars" etc. while the real money is the "reserve dollars" that cannot be acquired by individuals. Innovations like CBDC might put the reserve money directly into the hands of individuals and fix the issues that you mentioned. So that would mean that the central banks will be the ones with the fighting chance against crypto, not the private financial institutions.
    - flashyfaffe2 6y ago
      Agree with you. If I may add, this would be feasible only: If gov issued is own digital currency, which will mechanically would lead the value of the others digital currency worth near zero..
biolurker1 6y ago
I think you should spend sometime researching stable coins and why it's good for business
searchableguy 6y ago
I bought into HNS (handshake) hype. I think the only crypto currency I have used so far for real transactions and the motivation was ICANN. https://handshake.org https://handshake.org

vosper 6y ago

> It looks like Visa is stepping in the niche that Facebook's Libra has identified, but couldn't fully explore due to regulatory pressure As far as I know, Libra (called Novi, now? Or maybe that's just the wallet name) is still under development. They issued a new whitepaper recently that I read as very much directed at regulators - lots of acknowledgements of their concerns in the text. Which isn't to say it'll go anywhere, but maybe not dead yet.