Visa Chief Predicts ‘Meaningful’ Role for Stablecoins and CBDCs

The CEO of the world’s largest credit card firm told shareholders that stablecoins and central bank digital currencies (CBDCs) will play a “meaningful role” in the payments market in the future.

In addition, the firm released its 2022 annual report, in which it discussed its complementary and competitive relationship with cryptocurrencies.

Visa already has “multiple initiatives” in the blockchain field, according to CEO Alfred Kelly on a conference call, and has invested in various crypto funds and companies.

“It’s very early days, but we continue to believe that stablecoins and central bank digital currencies have the potential to play a meaningful role in the payments space,” said Kelly.

Stablecoins combine the peer-to-peer nature of cryptocurrencies like Bitcoin with the relative price stability of another currency or asset—frequently the U.S. dollar. This solves the price instability problem that critics, including central banks, claim prevents Bitcoin from being a legitimate currency.

Tether (USDT), which is the largest stablecoin by market cap, has a higher daily transaction volume than any other crypto.

CBDCs, on the other hand, are government-issued digital currencies built on blockchain rails. Lael Brainard, vice chair of the Federal Reserve, has expressed support for the establishment of a CBDC in the United States by offering a “safe central bank liability in the digital financial ecosystem.” Visa partnered with ConsenSys last year to connect CBDCs to current payment networks.

“Technology and innovation are shifting consumer habits and driving growth opportunities in ecommerce, mobile payments, blockchain technology and digital currencies,” the company stated, adding that crypto payment platforms “can be both a partner and a competitor to Visa.”

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