Despite being the largest, most popular, and most widely-recognised brand in the world of cryptocurrency, Bitcoin has failed to convince everyone of its worth.
The Chief Executive Officer of Visa, Alfred Kelly, is one of those doubters. In a recent interview with CNBC, the head of the worldâs largest provider of credit cards said that their company did not consider Bitcoin, or any of its competitors, to be a payment system, and that they would not process any transactions made using the digital currency.
Speaking at the recent National Retail Federation conference, Kelly said that Visa would only process transactions that were backed by fiat currencies (that is, currencies issued as legal tender by the government of a given country, such as US dollars, Euros, or pounds Sterling). Although Bitcoin and other digital currencies can be used to buy things in a limited fashion at the moment, Kelly maintains that it does not qualify as a currency as far as he and his company are concerned. Indeed, he likened the phenomenon to being more like a commodity that may be invested in and traded, but which is not a de facto currency in and of itself.
It is worth mentioning that the worth of many fiat currencies is based on nothing concrete, with many countries having come off the gold standard decades ago in response to one economic crisis or another. With Bitcoinâs immaculate record keeping via blockchain technology and the enforced limitations on growth and in-built scarcity of its mining protocols, it's a comparatively safe bet.
Kelly disagrees, citing recent peaks and troughs in the value of Bitcoin as evidence of the currencyâs volatile nature, something which is not palatable to a mainstream financial institution such as Visa.
Whether Kelly is right or wrong in his assessment remains to be seen, though it seems likely that, as Bitcoin become accepted as a unit of exchange in more and more venues, one or other of the financial behemoths will have to give way to the other.
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