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Visa launches crypto advisory service for its banking clients

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Visa's Head of Crypto Cuy Sheffield examines the growing consumer base for cryptocurrencies and details the resources Visa has established to aid customers with crypto investments.

Video transcript

[MUSIC PLAYING]

BRIAN CHEUNG: We're expecting some fireworks on Capitol Hill-- taking off in about 10 minutes-- as executives from FTX, Circle, Coinbase, other major crypto firms all face the House Financial Services Committee to answer questions from lawmakers about the state of the asset class. Let's get a little bit more of a pulse on this from Cuy Sheffield, Head of Crypto at Visa, who's live with us alongside Yahoo Finance's David Hollerith, who's going to be joining for the conversation as well.

Cuy, it's great to have you on the show. I want to talk a little bit about Visa's new advisory businesses as well, but I kind of want to kick off with the news du jour with that big hearing on Capitol Hill. You know, the pulse in Washington appears to be an acknowledgment that crypto is inevitable, so it's just the question of what is the proper way to regulate it. What are you expecting out of that hearing today? Would you expect it to be contentious, friendly? What do you think the tone is going to be?

CUY SHEFFIELD: It's hard to predict the tone, but it's very clear that crypto is top of mind for policymakers and regulators across the world. And we've been tracking these developments very closely. And I think what we're seeing is, there is clear consumer demand and there's a ton [AUDIO OUT] in this ecosystem that, you know, is really driving payments and financial services forward. The question is, really, how can you mitigate risk and protect consumers.

So we think it's really important to have hearings and to be able to have engagement between the public and private sector, because the space moves so quickly that it's really hard to understand all the aspects of it. So we're really interested to see how this hearing goes today and to have further engagement in the future.

DAVID HOLLERITH: Yeah. And Cuy, obviously, Visa's been shipping a ton of crypto products this year, and now you're launching a crypto advisory service. Can you sort of just explain that and how that is playing into Visa's strategy?

CUY SHEFFIELD: Yeah, sure. So over the past three years, we've really become a bridge between crypto platforms and our global network of 80 million merchants across the world. So we partnered with over 60 crypto wallets and exchanges-- you know, the market leaders like Coinbase and FTX and Crypto.com-- and help them offer their own Visa card programs. And you know, now, what we've seen over that time is the volume of inbound calls that we've gotten from our existing clients from large banks has skyrocketed.

And so we're really focused on how can we also become a bridge between these financial institutions and the crypto ecosystem. And we're seeing more and more interest in activity with banks looking to participate, and we think Visa's really well positioned to help advise them on how they can start to interact with this ecosystem.

JULIE HYMAN: Hey, Cuy. It's Julie here. So let's bring these two things together-- the promise, or threat, depending on how you look at it-- a regulation-- and this advisory service that you guys are launching. Because presumably, that's going to be a part of your advising, as well, if there is more regulatory scrutiny. For example, we had several crypto firms earlier in the year that had to pull back on lending products because of scrutiny from the SEC. So what is your sort of big thought bubble for some of these advisory clients when it comes to regulation?

CUY SHEFFIELD: Yeah. I think what's interesting is crypto can be so many different things. You know, you have crypto assets, you have stablecoins for payments, you have new financial services. And so it all depends on the use case. And we found that a lot of our clients, a lot of banks, they haven't had full-time teams that have been tracking the ecosystem and understanding all the latest trends.

And so it's really starting with educating them and showing what's happening and what could that mean for the bank's business and what are ways that they could start to get involved. And it all depends on what the use case is based on what the regulatory environment says and how that will evolve over time.

DAVID HOLLERITH: And Cuy, Visa's also working with central banks to issue central-back-backed digital currencies. And I was just curious, you know, you talked about that before, but where are those partnerships and how does that play into the advisory role?

CUY SHEFFIELD: Yeah. So we've been engaging with dozens of central banks across the world on the topic of CBDC, and what we found is that central banks are moving from just research to looking to pilot, looking to explore and experiment. And there's a really important role for the private sector to play. Someone has to build and operate a CBDC wallet.

What does it actually look like as a product? How do consumers use it? And so what we've been doing is really focused on what is that consumer-facing design, what infrastructure will banks need to operate wallets. And I think banks, particularly in markets across the world where central banks have been very advanced on this, they don't want to wait until CBDC comes.

They want to have a plan, they want to have a strategy, and they want to figure out what a CBDC wallet would look like that the bank would offer to consumers. And so our engagements that we've been doing have been really helpful to then go back and partner with banks so that they can be well positioned as these initiatives evolve.

BRIAN CHEUNG: Hey, Cuy, real quick, is the Federal Reserve one of them? Is there a Fed wallet coming?

CUY SHEFFIELD: We're working with central banks all across the world. I think, in the United States, there's still a lot of open questions about what problem would a digital dollar solve, what would it actually look like. And you know, we're seeing that there are digitized fiat currencies in the form of stablecoins that are growing rapidly. And so we think there's a lot that we can learn of what's happening in the private sector. And you know, it's not clear today-- and the Fed has said this, that there is a case for central bank digital currency right now in the US.

BRIAN CHEUNG: All right. I'll take that as a maybe. But Cuy Sheffield, Head of Crypto at Visa, live with us. And again, Yahoo Finance's David Hollerith also here for that conversation. Thanks again.

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