Bitcoin recently received what could arguably be its biggest endorsement yet. A leading executive at payment processing and credit card super-giant Visa, Jonothan Vaux , recently came on record endorsing bitcoin, and that Visa and bitcoin could both benefit by working together.
Vaux is Visa’s executive director of new digital payments and strategy at Visa Europe, so he certainly knows his stuff and is well-respected in the field. Vaux was part of a one day session at Wired Money, one of the leading financial technology and regulation conferences in the world. That Vaux used his time on stage to highlight bitcoin is interesting news in-and-of-itself, and further evidence that the mainstream financial sector is taking note of bitcoin’s progress.
The discussion on bitcoin centered around removing friction between the emerging bitcoin startups and more established, traditional banking companies and financial institutions.
Bitcoin is big, with a current market capitalization of about $4 billion dollars, and with more than 100,000 bitcoin transactions being conducted per day. Still, Visa alone dwarfs the entire world of bitcoin many times over. The total cash volume of Visa topped $7.3 trillion dollars in 2014 and nearly 65 billion transactions were processed on the company’s networks, according to its 2014 annual report.
Of course, Visa is a mature company with a long and established history, and has enjoyed decades of integration with banks, retailers, and society in general. Bitcoin, on the other hand, stormed onto the world stage just a few years ago. In that context, the rapid growth of bitcoin is encouraging, and the fact that companies like Visa are taking note of it is even better.
Further, Vaux discussed the technology underlying bitcoin, and joined the increasing chorus of entrepreneurs, business managers, and analysts who have been noting the potential for bitcoin-based technology to change the world. Simply put, bitcoin’s blockchain technology, which has allowed the currency to self-manage, regulate, and support itself, is becoming a hot topic.
The fact that the blockchain has been able to support hundreds of thousands of transactions per day, all while steadily increasing the bitcoin money supply and tracking the flow of bitcoins, is causing a wide range of experts to take note. Vaux noted that Visa is looking to learn from bitcoin, an d possibly to adapt some of its technological innovations.
One thing Vaux did note, however, is that there is a lot of infighting among the different members of the bitcoin community. When Vaux attended South by Southwest, a leading emerging technology and music festival, he came across people from bitcoin companies and bitcoin users. Instead of seeing cooperation and a drive towards a larger goal, Vaux claims he came across near anarchy with members fighting and clashing with one another.
This infighting hasn’t caused Vaux to doubt the future of bitcoin. Admittedly, however, increased unity and defining goals and a grand vision for bitcoin would help increase the rate of progress for the currency (in the view of the author). Bitcoin is still in its nascent stages, and while the currency has come a long way over the past few years, there is still an immense amount of room to grow.
Vaux also noted that he receives a lot of pitches from bitcoin startups. While he welcomes said pitches, he also has some gripes. First, Vaux noted, most startups focus on millennials, which haven’t been Visa’s most successful customers in the past and likely won’t be in the future. Vaux thus urged companies to think outside of the generational box. Vaux also urged companies to formulate long-term plans and to outline road maps that will help them chart their course in the future.
Vaux ended his speech by noting that “complacency” is the biggest risk Visa faces. Certainly, with new digital currencies and technologies quickly emerging, Visa can’t afford to sit on its hunches and let the world pass it by.