Bitcoin, the world’s largest cryptocurrency, is not really money and Visa won’t touch it, the credit card giant’s CEO told CNBC.
“I don’t view it as payment system player,” Alfred Kelly said in an interview recorded on Tuesday at the National Retail Federation conference in New York City.
Despite the emergence of bitcoin as digital money that can be used in a limited fashion to buy things, Kelly said, “We at Visa won’t process transactions that are cryptocurrency-based. We will only process fiat currency-based transactions.”
Fiat currencies, such as the U.S. dollar, are issued by governments as legal money. But, as Investopedia describes it, they are not backed by any physical commodity.
Bitcoin, as CoinDesk explains, is not issued by anyone. It’s “mined” or “discovered” by powerful computers around the world competing with each other to solve certain algorithms. The miners then write those transactions to the online blockchain ledger, where all activity is recorded and shared with everyone.
In the current environment, bitcoin acceptance as payment is rather limited, but as prices have soared, it’s become widely traded as a store of value like gold.
“My take is that bitcoin is much more today a commodity that somebody could invest in; and honestly, somewhat of a speculative commodity,” said Kelly, who became the chief executive of Visa in December 2016.
Speculative indeed, considering bitcoin prices lost about a quarter of their value in the past two days and were cut in about half since last month’s record high above $19,000. But even with the recent plunge, bitcoin is still up more than 1,000 percent in the past 12 months.
Earlier Wednesday, on Bank of America’s post-earnings conference call with analysts, Chairman and CEO Brian Moynihan responded to a question about cryptocurrencies after the financial giant banned its advisors from buying bitcoin-related investments for their clients. “We basically told people they could buy at other accounts, not at Merrill Lynch,” Moynihan said.