Visa Is the 'Bridge' Between Payment and Blockchain Technologies: Head of Crypto

Let's welcome, Visa's Head of Crypto Kai Sheffield to the show. Welcome, great to be here. Thanks for having me. Thanks for for sitting there while we did our little puppet show. That's great. All right. So we are at consensus 2024. Uh Talk to us about how your experience has been so far. This is day two. What have the vibes been like for you? It's fantastic. I think there's a lot of energy and momentum. We're really excited to see what developers are building and, and really how much, you know, Blockchain technology has, you know, started to mature and how the infrastructure has improved and you know, many different payment use cases, you know, that think stablecoins you know, can help enable. And so it's been great to engage with, you know, many clients, many companies and partners in the payments ecosystem who are all looking and exploring how Blockchain technologies can be used to improve payment flows. Now, Visa is one of the most important about companies for payments of any kind around the world. And you've been there for a while as the head of crypto, I'm wondering from a couple of years ago, how have the conversations changed from then to now internally, like the the ideas you're advocating for the the projects you're pushing, how has it changed over time inside a Visa? So we've made really steady progress, you know, consistently every week for five years now. And we actually set up the crypto team uh in the depths of the bear market late 2018, early 2019. And so our approach was really taking a long term view. Uh It's saying if visa cares about any technology that has the potential to improve payments. And so we wanted to take our time, you know, figure out ways that we could, you know, use these technologies to support, you know, our partners. Uh And, you know, we've started to, you know, experiment with stable coins. We started to do a lot of research, a lot of education, you know, for our clients. Uh and our goal is to just continue to make uh consistent, steady progress uh over the next decade. Uh And we're really excited about the opportunities that particularly stable coins can enable five years to the bulls and the bears. That was a nice little set up. We didn't know we were doing there with our puppets um internally. Has there ever been any any pushback anyone ever questioning you through the Bear market? Like should we be spending this time and effort building in this industry that seems to be quite volatile? There hasn't I think we're, we've been really fortunate to be in a company that has a culture that, you know, really from the beginning, from the early days of Visa and, you know, Dee Haw, you know, going all the way back to the sixties, you know, recognize that value is going to be digitized. It's gonna move over many different networks and we wanna be the single connection point for clients, you know, to move value in many different places in many different payment flows. Uh And so we recognize that, you know, the prices of crypto assets are volatile. We don't really care about the prices, we care about the underlying technology and the ways that it can be deployed within the payments ecosystem, but it takes time to do that and you have to do it in a controlled uh client, you know, safe way. Uh And so we're really here for the long haul and have continued to make steady progress, you know, despite the market cycles now in a recent uh visa research piece, I believe you and your colleagues found that of the multi trillion dollar stable coin market, only a fraction of it is actually being used by real people in the payment sense, I think 100 and 49 billion or some number like that, which is a big number, but it does, it is not representative of stable coin usage as a whole. What do you think it's gonna take to increase that number and increase the actual adoption of Stablecoins as a proper payment rail. So first, we think one of the unique aspects of Stablecoins is the fact that you could see all of the data, you know, on chain. And so we've invested a lot of time and resources and how do we understand on chain data and understand how stable coins are are being used. Uh And so we partner with AM labs, we put up a, a dashboard visa on chain analytics.com. And it was really this exercise of, you know, we use on chain data internally. Uh It, you know, answers some questions, it opens up many more questions and we wanted to make that available as a free public tool and resource for our clients, for policymakers, for media. And you know, we started with this adjusted transactions, you know, metric, you know, looking to filter out transactions that seem to be initiated, you know, by bots or as a part of smart contracts. It's not perfect. Uh So we're not saying it's, it's the end all be all. But we think that there's so much opportunity the industry to really use on chain data, you know, to better understand how people are are using stable coins. And some of the takeaways to us, it's not that stable coins are being used by consumers to buy their coffee. It's stable coins are being used for things like large value B to B payments. Uh cross border, you know, peer to peer. Uh And so I think that we're just at the point where we're crossing the chasm from consumers who are already in the crypto space, who are trading crypto on an exchange using stable coins, you know, paying other people in crypto to the infrastructure being there that can enable mainstream consumers, particularly outside the United States in emerging markets, you know, to pay each other uh to pay businesses in many of these flows, you know, over Blockchain rails, but there's a long way to go. Um You know, we're excited to figure out how we can partner with existing companies in the payments ecosystem to start to integrate stable coins in unique ways. And we think it has to be the two together. It's not an either or you know, traditional payment network or stablecoins. It's going to be how can they both interact with each other to improve payments? Tell us a little bit more about that. What's Visa's role in the future of Stablecoins? Yeah. So we, we see ourselves as a bridge between stablecoins of Blockchain technology and the existing payments ecosystem. One of the things that we've been doing is investing in how we can use Stablecoins within some of our core products. You know, for example, when you tap to pay with a Visa card, it's instantly authorized and you could walk out of the store. But there are a lot of things have to happen for money to be moved from whoever issued that card, you know, to, you know, the merchants bank on the other side. And so we've started to experiment with stable coins like us cc running over blockchains like solana to give options for our clients to settle with us, you know, over a Blockchain. So we can receive stable coins, you know, to an account that we have a circle, we can then convert them, you know, to pay out in fiat to merchant a choirs. And so I think we've got, you know, such a large diverse network of traditional financial institutions, fintech, crypto companies. We're trying to figure out how can visa be a bridge that not all those companies are gonna adopt stable coins and blockchains at the same time, let's meet them where they are. If they want to use stablecoins, great, we could support that. They operate in traditional fiat. We'll manage the conversions, you know, back into it. So we're excited to see how we can play that, that role as a bridge. And that reminds me before contestants, I got my pre conference haircut as we all do. Uh I, my barber only takes cash. I said, oh, it was just about the fees because so often small businesses don't like credit cards because of the fees. He said no, it's actually not because of the fees. It's because on Fridays, if I'm getting paid with credit cards, I can't go to the bank and get my money because the banks are closed. So I'm wondering how Visa is thinking about actually helping maybe small businesses even utilize and realize that stable coins could allow for instant settlement and they could take digital payments. Uh and not have to worry about things like the banks being closed on the weekends. Yeah. So, so there are a lot of things that we're doing across the company trying to speed up, you know, how quickly we can get money, particularly to small businesses. You know, we've got a product called Visa Direct where you could do, you push payouts and be able to have a small business, you get money directly to their debit card on a weekend. And so we don't think it's only stable coins. We think Stablecoins have potential and on the back end behind existing Visa products could potentially move money faster. But we think there are a lot of ways that the payments ecosystem will continue to evolve and make money, be able to get to small businesses faster where they need it. It sounds like Visa is uh focused when it comes to crypto is on stable coins. I have to ask you back in 2022. I was so excited when I heard that Visa had trademark applications for things like NFTS and Metaverse and, and wallets. Uh What's happening with those? Is there any focus on that? Have those kind of been uh put to the side while you focus on your Stablecoin research dashboards and looking at how a visa can work with Stablecoins. So we've continued to follow the NFT ecosystem and, and the broader uh creator economy. Um And we think it's, it's definitely evolved and, and changed. And I think, you know, back when we started, you know, exploring, experimenting with NFTSNFTS were really only on blockchains like Ethereum and they were pretty expensive to be able to mit and, you know, there was an ecosystem of, you know, fine art that people were, were collecting. Now, I think some of the shifts that we're starting to see are a lot of the use cases for NFTS are things like loyalty. You know, you can now mint NFTS for fractions of pennies. And so we're seeing interesting experiments with things like digital receipts and loyalty programs where if you hold an NFT, you can get a discount uh on different purchases. And so, you know, the culture that we have is really trying to learn by doing and, you know, working with clients around proof of concepts. We've got a, a visa consulting and analytics business uh where we have had issuers and merchants come to us say, how do we incorporate NFTS in a loyalty program? And so we're still absolutely, you know, interacting with the ecosystem and experimenting. I think we've just seen many of the use cases for NFTS evolved quite a bit from where they were a few years a few years ago, but broadly, we're still really excited about the greater economy and the role that blockchains could play within it. Hi, thanks so much for joining us this morning. We hope you enjoy the rest of the conference. Thanks for having me. This has been great. That was Visa's head of Crypto Kai Sheffield.