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Visa’s upcoming crypto product is designed to drive mainstream adoption of public blockchain networks and stablecoin payments.
Global payment giant Visa continues to explore the benefits of the cryptocurrency industry with a new initiative focused on stablecoin payments.
Cuy Sheffield, head of crypto at Visa, took to Twitter on April 24 to announce a new cryptocurrency-related project developed by the firm.
Visa’s upcoming crypto product is designed to drive mainstream adoption of public blockchain networks and stablecoin payments, Sheffield noted.
We have an ambitious crypto product roadmap @Visa and just opened a few reqs for senior software engineers to help us drive mainstream adoption of public blockchain networks and stablecoin payments. https://t.co/UQRJNcOJtB
— Cuy Sheffield (@cuysheffield) April 24, 2023
According to a Visa job posting published on April 20, the company’s crypto division is building the “next generation of products” to facilitate the digital commerce of everyday life.
In order to develop the product, Visa is seeking to hire software engineers focused on programming, backend systems Web3 technologies.
“Particularly interested in experience using Github Copilot and other AI assisted engineering tools to write and debug smart contracts,” Sheffield wrote on Twitter.
Among preferred applicant qualifications, Visa listed a good understanding of Layer 1 and Layer 2 solutions alongside experience with writing smart contracts using the programming language Solidity. Introduced specifically by the Ethereum Network, Solidity is used to create smart contracts on blockchain platforms and generate a chain of transaction records in the blockchain system.
Related: Bitcoin Lightning Network is 1,000x cheaper than Visa and Mastercard: Data
The position also requires good understanding of public and permissioned distributed ledger networks, security protocols, private key custody as well as new Ethereum enhancements such as ERC-4337.
One of the world’s largest payments companies, Visa made a major move into the crypto industry in 2020, partnering with the blockchain firm Circle to support the USD Coin (USDC) stablecoin on certain credit cards. The firm has been gradually expanding its crypto offering but halted some new industry partnerships due to the crypto bear market of 2022 and major industry collapses like Celsius and FTX.
Magazine: Unstablecoins: Depegging, bank runs and other risks loom
Stablecoins offer a way for consumers — particularly Americans — to escape the financial industry’s punitive transaction fees.
As rising prices have forced consumers all over the world to reduce their spending and find new ways of coping with the increased cost of living, consumers are finding themselves relying on credit cards even more than they already were.
More Americans are unable to pay their credit card bills in full at the end of the month, with 46% of credit cardholders carrying month-to-month debt, up from 39% in 2022. A recent report from the Federal Reserve Bank of New York highlighted how the current 15% year-to-year credit card balance increase represents the largest jump in more than 20 years.
It’s undeniable that ordinary people are facing higher prices across the board, and are increasingly unable to make credit card payments. That’s because payments giants like PayPal are taking advantage of consumers, and we’ve all been letting them get away with it.
As credit card spending in the United States almost entirely benefits Visa and Mastercard, who handle 80% of total transactions, the failure of the competitive model in the credit card industry may be to blame for at least part of the crisis at hand
Related: Did regulators intentionally cause a run on banks?
But that’s not all: With the highest credit card swipe fees of any major economy, American businesses pay up to seven times more in swipe fees than businesses in Europe, and five times more than businesses in China — a cost that gets passed down directly to consumers. In order to avoid shouldering transaction costs, merchants are forced to set higher prices than they would prefer — that’s prices for all consumers, not just those choosing to pay by credit card — which essentially means that anyone paying by cash or debit card is forced to pay a higher price for the convenience of a select few.
It’s true that electronic payments are convenient, and they’ve solved many of the cross-border problems posed by an old cash-only mentality. However, consumers end up paying a lot more for this comfort than they might have been led to believe, and they might not even know it.
In 2023, the technology at our disposal is so advanced that centralized services imposing limits on merchants’ or customers’ rights to send and spend simply should not exist.
Why, in today’s world, should anyone be forced to use a centralized service that is specifically designed to take such a big cut of their every purchase?
By replacing old systems and traditional payment providers — which serve the greater monopoly rather than hard-working ordinary people — distributed solutions can save consumers and merchants more money. In order to do this in a safe and transparent fashion, however, volatility cannot be a part of the equation, which means traditional cryptocurrencies cannot be the answer. But stablecoins could be.
Give me my goddamn money @paypal. I should have conducted this transaction in bitcoin.
— Neeraj K. Agrawal (@NeerajKA) November 11, 2011
Stablecoins are specifically designed for price continuity, as the name suggests. Their value is directly tied, or pegged, to a “stable” reserve asset, like a precious metal or the U.S. dollar, so their price is ultimately fixed. By allowing for real-time payments over blockchain networks, they offer faster and more efficient money movement than their fiat counterparts. With a more concrete value proposition for everyday use, they represent a more effective alternative to more highly volatile cryptocurrencies.
But with some stablecoins going as far as offering 99% cheaper fees for consumers and merchants compared to what the current global payment solution providers offer, they also represent a good way out of our dependency on credit cards as a whole.
In a 2021 speech, the Federal Reserve Board’s vice chairman for supervision, Randal Quarles, invited us to “not fear stablecoins,” as their potential benefits should be taken into “strong account,” and “the possibility that a U.S. dollar stablecoin might support the role of the dollar in the global economy.” Elsewhere in the world, things are moving in a similar direction. For example, the Digital Euro Association sees “automated micropayments as a way for Europe to maintain its digital competitiveness.”
The solution may be found in stablecoins themselves or in the mix between traditional financial structures and the innovations of Web3, and it could be easier to implement than we might think.
Related: Bank collapses are spurring interest in self-custody startups
Since merchants may be reluctant to build up the necessary crypto knowledge they would need to accept stablecoins, they could instead look to providers who would allow them to both accept stablecoins as a currency, and get settled into bankable fiat currency without the need to change accounting procedures. The stablecoin provider could add value, security and transparency to its proposition by getting the stamp of approval of something like a bank guarantee, in which case the value of the stablecoin in question would be fully protected, and consumers’ peace of mind would be assured.
The important thing to remember is that both merchants and consumers — sick of a system keeping them hostage — are desperate for innovative solutions to a crisis that’s been left unchecked for simply too long. To this end, the mainstream use of stablecoins as a means of payment does have the potential to save us from our dependency on the credit card industry and even drive down gouged consumer prices. Their value proposition shouldn’t be overlooked.
What will it take to implement a cheaper, more efficient and straightforward way to conduct business? Are we resigned to letting ourselves be taken advantage of? If the answer is no, then stablecoins and other low-fee Web3 solutions may be where we need to start.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph
The fraudsters would normally exploit the smart contracts to allow for the approval of unauthorized transactions.
According to the global payment provider Visa, 2022 became a record-breaking year for cryptocurrency thefts, with over $3 billion stolen in on-chain thefts. Cryptocurrency bridge services were a favored target for threat actors.
Visa published the biannual threats report on March 20. On 24 pages, the document contains data on all sorts of violations that occurred in the digital payments system globally last year — from plastic card fraud schemes to malware. A separate section is dedicated to cryptocurrency and digital platforms.
It pays special attention to token bridges and their vulnerability. Commonly the fraudsters exploit a bridge service’s smart contracts to either forge new transactions or allow for the approval of unauthorized transactions. The total amount of funds, stolen via token bridges, totals $2 billion from January through early October 2022.
The report also mentions a crypto-focused phishing campaign, whose actors were impersonating a crypto exchange company in emails to harvest the victim’s account login data. Once the real exchange prompts the threat actor for the two-factor authentication (2FA), he would use the spoofed site to prompt the victim to enter their 2FA information. And then would use the real 2FA from the spoofed site to complete the login process.
Related: Visa’s crypto strategy targets stablecoin settlements
In February, it was reported that, along with its competitor Mastercard, Visa would delay the launch of new partnerships with crypto firms due to high-profile bankruptcies in the industry. However, Cuy Sheffield, head of product at Visa, dubbed the report inaccurate and reassured that Visa would "continue to partner with crypto companies to improve fiat on and off ramps” and “build new products that can facilitate stablecoin payments.”
On Feb. 20, the Bitcoin market cap flipped the market cap of Visa for the third time in history. By Mar. 14, the gap between the two reached more than $20 billion in favor of BTC.
Visa's head of crypto has pushed back against the notion that the credit card giant is getting cold feet because of the bear market.
Crypto cycles aren’t for the faint-hearted. As the industry continues to evolve from the cypherpunks into the mainstream, we can expect a lot of growing pains. The dumpster fire that was 2022 may have scared off many companies interested in exploring the sector. Case in point: Visa and Mastercard’s embrace of crypto may have hit a snag thanks to the bear market and unclear regulations.
According to a new report by Reuters, the credit card giants are halting the launch of certain crypto products until market conditions and the regulatory environment improve. Cuy Sheffield, who heads Visa’s crypto division, wasn’t pleased with the report, reassuring the market that Visa is very much committed to seeing through its crypto ambitions.
This week’s Crypto Biz explores the latest reports around Visa and Mastercard, Jack Dorsey’s decentralized Twitter alternative, and Goldman Sachs’ apparent need for more digital asset professionals.
Credit card giants Visa and Mastercard will delay the launch of new crypto partnerships due to the bear market and murky regulatory conditions, according to a Feb. 28 report by Reuters. The companies are hesitant to launch new crypto partnerships following high-profile bankruptcies in the sector, like FTX, BlockFi, Celsius, Voyager, Genesis etc. “Recent high-profile failures in the crypto sector are an important reminder that we have a long way to go before crypto becomes a part of mainstream payments and financial services,” a Visa spokesperson said. However, Visa’s crypto head later clarified that the company continues to “partner with crypto companies to improve fiat on and off-ramps.”
1/ This story is inaccurate as it pertains to Visa, here’s the reality https://t.co/oAEaj7MsX0
— Cuy Sheffield (@cuysheffield) February 28, 2023
Jack Dorsey is embracing decentralized social networks with the private beta launch of Bluesky — a so-called decentralized Twitter alternative. Bluesky hit Apple’s app store as an invite-only app, allowing key persons to try out the new platform. An early peek at Bluesky reveals an interface that very much resembles Twitter. The major difference between the two is that Bluesky claims to be “decentralized,” which means it operates on independently run servers rather than centralized servers controlled by a single entity. It’s not entirely clear if Bluesky will have Bitcoin (BTC) integration, something Dorsey feels very strongly about. In June 2022, Cointelegraph reported that Dorsey was building “Web5” powered by Bitcoin.
Watch what they do, not what they say. Amid continued layoffs in the digital asset sector, multinational investment bank Goldman Sachs has not closed the door on hiring more crypto professionals. According to Goldman’s digital asset lead Matthew McDermott, the bank remains “hugely positive” on exploring blockchain applications, which may require more hires. Goldman Sachs’ digital asset unit currently has 70 people and likely won’t be affected by the bank’s job cuts. It feels like only yesterday that Goldman Sachs was hyper-critical of crypto. Now, it’s fully embracing the sector and its innovative potential.
Last week, Crypto Biz told you that Coinbase has a lot at stake. This week, CEO Brian Armstrong reiterated that Coinbase’s staking products do not constitute securities and should not fall under the United States Securities and Exchange Commission’s (SEC) enforcement action. “[We] really just are providing a service that passes through those coins to help them participate in staking, which is a decentralized protocol,” he said, referring to the exchange’s staking products. The SEC has already thrown the book at crypto exchange Kraken for its staking services. Will the regulator buy Coinbase’s argument? Only time will tell.
WATCH: Coinbase CEO Brian Armstrong joins Bloomberg TV after the biggest US cryptocurrency exchange posted a $557 million loss and saw revenue tumble 75% in the fourth quarter https://t.co/zEfQ0mSMe0 https://t.co/dJAkxCtft8
— Bloomberg Markets (@markets) March 1, 2023
It’s hard to get positive mainstream coverage of crypto these days. This week, Binance CEO Changpeng Zhao responded to a scathing article about his exchange’s business practices. Meanwhile, the Solana network experienced yet another outage. This week’s Market Report breaks down the FUD around Binance, and discusses what’s potentially in store for Solana. You can watch the full replay below:
Crypto Biz is your weekly pulse of the business behind blockchain and crypto, delivered directly to your inbox every Thursday.
The head of Visa’s crypto department is denying reports that the US payment giant is pausing its digital currency efforts. Cuy Sheffield, Visa’s head of crypto, tells his Twitter followers that the recent uncertainty in the crypto sector is not prompting the company to step away from digital currencies, as was reported earlier this week. […]
The post Visa Executive Says Payments Giant Not Backing Away From Crypto, Despite Recent Reports appeared first on The Daily Hodl.
Holding gains above $1,750 remains a challenge for ETH, but derivatives data shows traders believe future downside moves will be limited to the most immediate price support.
The price of Ether (ETH) declined 9.8% between Feb. 19 and Feb. 25 after the price resistance at $1,725 proved stronger than expected. Still, the correction was insufficient to break the 6-week-long ascending channel and did not cause Ether derivatives metrics to turn bearish.
Ether's price resilience can be partially explained by the operational failure of some of its smart contract blockchain competitors. For instance, Solana (SOL) faced a 20-hour-long outage on Feb. 25, which was only resolved after a network upgrade coordinated by validators. The network restart also involved purging some of the latest slots, although Solana developers said that "no confirmed user transactions were rolled back or impacted."
NEM (XEM) experienced a "chain halt" on Feb. 27 that lasted for 15 hours, causing multiple exchanges to halt deposits and withdrawals and developers promised to release an update to prevent further misbehavior. Curiously, the latest post from the official NEM account on Twitter, excluding a Merry Christmas greeting, was a "Please Stand By" image posted in July 2022.
The regulatory environment remains shady for cryptocurrencies, and the latest victims were global payment processing companies Visa and Mastercard. According to a Reuters report published on Feb. 28, the firms are delaying the launch of new partnerships with crypto firms until market conditions improve and a more transparent regulatory framework is established.
In more positive news, Ethereum's Sepolia testnet was successfully hard forked on Feb. 28 in preparation for the Shanghai upgrade. The much-anticipated mainnet update expected for March should finally allow validators to withdraw their staked Ether from the Beacon Chain. Developers are now prepping the Goerli testnet to enter a similar stage.
Let's look at Ether derivatives data to understand if the $1,560 support retest on Feb. 25 has impacted crypto investors' sentiment.
The annualized two-month futures premium should trade between 5% and 10% in healthy markets to cover costs and associated risks. However, when the contract trades at a discount (backwardation) versus traditional spot markets, it shows a lack of confidence from traders and is deemed a bearish indicator.
The chart above shows that derivatives traders became slightly bullish as the Ether futures premium (on average) flirted with the 5% threshold on Feb. 26. More importantly, it shows resilience even as Ether price declined by nearly 10% between Feb. 19 and Feb. 25.
The increased demand for leverage longs (bulls) does not necessarily translate to an expectation of positive price action. Consequently, traders should analyze Ether's options markets to understand how whales and market makers are pricing the odds of future price movements.
The 25% delta skew is a telling sign when market makers and arbitrage desks are overcharging for upside or downside protection.
In bear markets, options investors give higher odds for a price dump, causing the skew indicator to rise above 10%. On the other hand, bullish markets tend to drive the skew metric below -10%, meaning the bearish put options are in less demand.
Related: Vitalik Buterin says 'more still needs to be done' over high Ethereum txn fees
The delta skew flirted with the bearish 9% level on Feb. 27, signaling stress from professional traders. However, the situation improved on Feb. 28 as the index moved to 5 — indicating a similar upside and downside risk appetite.
It makes sense for fundamental analysts to avoid adding bullish positions ahead of the Shanghai upgrade, especially since Ethereum developers have a history of delaying significant network changes.
Despite the range of concerning factors, options and futures markets signal that pro traders are conservatively bullish and trust that the ascending pattern will hold. From a technical analysis standpoint, investors appear to believe that the bullish trend will continue unless Ether breaks below the channel support at $1,520.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.