Visa’s CFO condemns cryptocurrencies
Visa CFO Vasant Prabhu questions crypto’s credibility… “Who’s good for the money? Who the hell knows?”
For many months global payments company Visa has expressed hesitation and skepticism regarding the new wave of digital currencies. Now, the company’s chief financial officer has expressed an even firmer stance that cryptocurrencies are volatile, speculative ventures, operating unregulated, in the grips of a financial bubble.
During an interview with the Financial Times this week, Visa chief financial officer Vasant Prabhu lashed out against cryptocurrencies and at what he describes as investors who have “no clue” what they’re doing.
“The people asking me [about cryptocurrencies] are the ones who scare the hell out of me,” Prabhu said. “You know, guys like the limo driver to the airport… They have no idea what they are doing.”
The Visa executive also revealed that a member of his extended family recently touted crypto earnings over a Thanksgiving dinner, while a bank teller informed Prabhu of price predictions and bitcoin market insights.
“This is the ultimate thing that you hear about when you have a bubble, when the guy shining your shoes tells you what stock to buy,” he said. Prabhu insisted that “every crook and dirty politician” uses cryptocurrencies.
“With a currency issued by the Federal Reserve, I know who stands behind it,” he said. However, when considering cryptocurrencies, Prabhu was far less confident. “Who’s good for the money? Who the hell knows?”
“My personal view is that cryptocurrencies are more speculative investment commodities than payment options, operating in a very unsettled regulatory environment. The markets are testing cryptocurrencies today with the volatile fluctuations we’ve seen recently. It’s early days and we’ll watch it very closely,” Prabhu said.
In early January, several prepaid cryptocurrency debit card providers had their services suspended by Visa.
That same month, during an interview at the National Retail Federation conference, Visa chief executive Alfred Kelly said the digital currency market was “still evolving” and that crypto payments aren’t credible payments.
“I don’t view it as a payment system player. In fact, we at Visa won’t process transactions that are cryptocurrency based. We will only process fiat currency-based transactions,” Kelly said.
In February, digital exchange Coinbase warned customers that, due to changes to the Merchant Category Code (MCC), credit card companies, such as Visa, can charge additional “cash advance” fees on crypto purchases.
The exchange also began preventing users from adding new credit cards for payments. The decision was made because Coinbase “cannot ensure customers will have a positive purchasing experience with a credit card”.
Despite Visa’s reluctance to support cryptocurrency payments, the company is investing in related technology.
The Union Bank of the Philippines (UnionBank), together with four unnamed rural banks, will employ Visa’s blockchain-based payment platform in order to more efficiently process cross-border transactions.
You can learn all about different exchanges, understand exactly how to buy and sell cryptocurrencies, calculate your taxes, discover digital wallets to hold assets and explore a list of all the alternative coins on the market.