
Advancing our approach to digital currency - sjcsjc
https://usa.visa.com/visa-everywhere/blog/bdp/2020/07/21/advancing-our-approach-1595302085970.html
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ve55
I read the entire post, but I'm not sure if it.... actually said anything?

I guess an expectation of some future releases related to easily spending or
buying crypto perhaps?

~~~
wmf
Yeah, I would translate this as "stop saying we hate crypto, we have allowed
some crypto stuff, and we will allow more in due time".

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SparkyMcUnicorn
They mentioned "working closely" with Coinbase and Fold.

I hadn't heard of Fold, so I checked it out and they're currently marketing a
credit card that rewards you Bitcoin instead of "cash back", points, or
airline miles.

Not very relevant to this discussion, but Fold emphasizes "opt out [of]
surveillance" and "opt in [to] privacy". I went to create an account and saw
the "sign in with twitter" option, and here are the permissions they're
requesting:

\- See Tweets from your timeline (including protected Tweets) as well as your
Lists and collections.

\- See your Twitter profile information and account settings.

\- See accounts you follow, mute, and block.

\- See your email address.

How can a company think this aligns with that sort of marketing at all?

~~~
sneak
The privacy.com (private/disposable payment card numbers) app and website have
tons of third party trackers and spyware embedded, too.

Privacy is just a marketing bullet point, these days. Apple pushes it hard as
a differentiator, yet most of iCloud isn’t end to end encrypted and almost all
of the apps in their App Store have spyware embedded in them.

~~~
rsa25519
> The privacy.com (private/disposable payment card numbers) app and website
> have tons of third party trackers and spyware embedded, too.

Well, the relevance all depends on your threat model. Personally, I care about
protecting my banking info from strangers but not about protecting my info
from privacy.com and its third parties.

I think "spyware" is a bit of an exaggeration considering that presumably many
privacy.com users have a threat model similar to mine.

~~~
esrauch
I'm curious about this stance; are you worried specifically about people
stealing money from you? Because outside of that, the privacy.com-third-
parties (and then third parties they might sell data onward to from there)
seem _more_ strangers than the businesses you have actually have a direct
financial transaction with; you can't even enumerate who they are.

~~~
rsa25519
I mean, if you look on the privacy.com website, the only 3rd-party request is
Google Fonts. Personally, the privacy tradeoff is worth being able to pull a
font from the cache, even though I understand that the same doesn't apply to
everyone

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ilaksh
If digital currency becomes really successful then it will eventually put Visa
out of business.

Money should be a public system, not a private enterprise. And the ability to
transfer money without paying some gatekeeper should be a fundamental right
and core function of government.

I think for government to stay relevant then it needs to start to encompass
more distributed protocols. To the degree that it fails to do so then I think
it loses relevance. Which may be fine, since government has historically
performed fairly poorly. Maybe we can replace most of it with independent
technology in a different paradigm.

~~~
centimeter
> If digital currency becomes really successful then it will eventually put
> Visa out of business.

Not really - there don't exist any digital currencies that A) have desirable
economic/security properties B) can scale to billions of users and C) have a
UX that's accessible to unsophisticated users.

Visa's role in a Bitcoin-based economy is probably providing custodial
wallets, Lightning payment routing, etc.

> the ability to transfer ... should be a fundamental right and core function
> of government

The government has historically done a pretty bad job of this (which is why
99.9% of consumer payments go through private systems).

Why would I want the government to manage this when we know how to do this
well without a government involved? What's the benefit of using FedCoin over
using something decentralized with good monetary properties?

> I think for government to stay relevant then it needs to start to encompass
> more distributed protocols. To the degree that it fails to do so then I
> think it loses relevance.

This is an oxymoron - if a protocol is distributed, it inherently obviates the
need for governmental management.

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biolurker1
There are actually but probably you haven't used them. But that's not the
point. It's just a matter of time that some digital currency will satisfy all
your demands.

~~~
centimeter
Name some.

~~~
biolurker1
Dyor

~~~
centimeter
I have. I'm waiting for you to name some shitcoins you think meet the criteria
I mentioned so I can dunk on you.

~~~
biolurker1
You need to look into what makes you a hater to some technology

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bananaquant
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
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
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
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
> _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.

~~~
danialtz
I'd be also curious to see which space (if anything left) Visa would be moving
on the retail side. They have already filed a patent which could be an
additional indicator [1].

In general, once a national CBDC is in place it'd become rather difficult to
foresee the position of middle players between issuer of cash (CB) and user of
cash (people) in retail space, e.g. Visa and commercial banks. In a world
where anybody can send cash to each other without a middle player (even
offline), the role of middle players would probably reduce from "money
printers" and large-scale trusted actors to "security box"-holder financial
players and value-added service providers.

On the private sector side, there are also quite strong players stepping in,
likes of Celo and various other public chains. On the public sector, China's
DC/EP would be publicly out in 2022 creating a strong inertia [2], followed by
couple of other central banks in various stages.

Things are going to get really interesting next few years, which certainly
will change the today's financial landscape.

[1] [https://www.forbes.com/sites/jasonbrett/2020/05/14/visa-
subm...](https://www.forbes.com/sites/jasonbrett/2020/05/14/visa-submits-
patent-application-for-digital-dollar-using-blockchain/#715bff015b63) [2]
[https://asia.nikkei.com/Spotlight/Cryptocurrencies/China-
aim...](https://asia.nikkei.com/Spotlight/Cryptocurrencies/China-aims-to-
launch-digital-yuan-by-2022-Winter-Olympics)

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hypnotist
It seems that Visa is having FOMO moment here. (at least in my opinion)

They do not want to be left out in case all those nerds start scaling Bitcoin
or any other altcoin to something that can be used globally and legally.

~~~
soared
This reads to me more like visa has bought into to crypto currency and is
spending real money to build out integrations. Seems like they’re a player in
the space, not just there for fomo.

Similar to fidelity.

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globular-toast
What do they class as "digital currency"? The major world currencies have been
purely electronic for decades now. Nothing physical is moving around, even
between banks. Bitcoin is unique not because it's electronic but because it's
trustless. Those "stablecoins" they then go on to mention are no different to
regular currencies, they're just there to allow people to cash in on the hype
of bitcoin.

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banditelol
> Today their research is focused on new mechanisms to improve scalability and
> enable offline digital currency transactions.

I'm a bit lost here about offline digital currency transactions, I have no
clue on what concept can make it possible, can anyone enlighten me please?

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soared
My favorite company positions are partner agnostic. I’m not sure why but I
somehow morally agree more with a company who provides their service to a
variety of partners and doesn’t have a preferred vendor.

Likely it’s the adtech bidding /auction background, where many tech companies
aren’t agnostic and double dip on the buy and sell side (google, att, amazon,
Verizon).

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kemonocode
It might be a knee-jerk reaction, but I'd be very wary of Trojan horses. The
old money and just all of the traditional economic infrastructure has a vested
interest in seeing crypto fail because it takes power away from them, and Visa
is no exception.

~~~
globular-toast
I'd like to think Visa is independent of the banks and is therefore agnostic
towards who is keeping the ledger.

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soared
If you didn’t know, visa has effectively pivoted to partly be a tech company.
I worked with them on data licensing agreements (evil adtech) and from that
perspective their systems were more up to date and worked better than
oracle’s.

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phyzome
« Today, fiat-backed digital currencies, commonly referred to as
“stablecoins,” have emerged as a promising new payment innovation, combining
the benefits of digital currencies with the stability of existing currencies
like the US dollar. »

Haha, Visa drank the stablecoin koolaid.

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mrkramer
Unfortunately Bitcoin's creator is the only one who can bring peer-to-peer
electronic cash to the world, it will not be Facebook or any other company. If
Satoshi stayed with Bitcoin project Visa, MasterCard, Swift and all the other
major financial companies would slowly become thing of a past.

