Avivah Litan, Gartner Research VP analyst in a recent interview suggested that VISA should choose stablecoin over bitcoin as bitcoin’s volatility does not make it suitable for banking transactions. Litan’s comment comes in the wake of VISA’s recent pilot API program for its banking partners that would allow customers to purchase bitcoin and other cryptocurrencies where the bank would act as a custodian.
Litan believes Card technology providers should focus on providing the on-boarding tools rather than becoming a service provider themselves as it would add to the transaction cost and defeat the purpose of blockchain transactions. She explained,
“These card and payment company offerings certainly increase the technical rails between consumers, businesses, and blockchains. But the offerings come from centralized financial companies who earn revenues today by charging transaction fees for centralized clearing, settlement, and payment services.”
She added: “Companies we speak to are justifiably skeptical of these services. After all, the revolution of blockchain payments is that they execute peer-to-peer and eliminate central intermediaries and associated bank fees.”
VISA over the years has partnered with several crypto companies allowing the use of its remittance tech for crypto expenditure via credit and debit cards. However, the API pilot would be the first of a kind that would allow VISA partner banks to act as crypto custodians and directly offer bitcoin and other crypto assets to the customer.
Gartner VP Beleive Stablecoin Based Payment Would be More Efficient
Gartner VP Litan said that even though Bitcoin adoption and trading service offered by card companies is understandable, however, the whole purpose of Bitcoin is to eliminate centralized payment system. She also believed that a service that would allow for easy onboarding and expenditure of cryptocurrencies via the use of stable coins is the need of the hour which not many companies are offering at the moment. She also believed that such an on-boarding service should come from card companies themselves who can still make revenue on that business model. She explained,
“The card brands could still earn revenues from on and off-ramp value-added services, and from interest on the reserves underlying the stablecoins.”