Bitcoin wallet ZenGo announced the release of Visa payment card: how it affects the market
Crypto wallet technology is changing in ways people have never expected. It was once believed that major banks, financial groups, and financial technology companies would never get on board with cryptocurrency, but that is slowly changing. These companies are beginning to see cryptocurrency as a great opportunity for growth, Visa is one of the prime examples. ZenGo X recently announced that they would be rolling out a Visa card that its wallet users can use to conduct cryptocurrency transactions. But there is more to this than one company speeding up its transactions. The adoption of the Visa system by wallet providers like ZenGo X will have a massive impact on the future of cryptocurrency transactions, consumers, and fiat currencies.
ZenGo’s Visa Payment Card and How It Will Work
The value of many cryptocurrencies, especially Bitcoin, has soared due to unstable economies, currency debasement, and political instability related to more factors than one can count. This leads more people to see cryptocurrencies as a more valuable medium of exchange than fiat. In 2018, there were 35 million crypto-asset users worldwide, according to a recent Cambridge study. The same study states that in 2020, there were 101 million crypto-asset users, which tells us about a 189 percent increase over almost two years. As technology companies overcome the limitations of cryptocurrency, the number of unique asset holders will increase.
Several companies are working on increasing the speed and efficiency of transactions to keep up with the latest trends in consumer demand. One of the ways they are doing this is by integrating their wallets with the Visa payment system. ZenGo X is rolling out a Visa card that will be linked to its multi-currency wallet. Linking their wallets to a Visa card will allow users to spend their funds anywhere in the world so long as the merchant accepts Visa cards. The ZenGo Visa card will be released in the United States in early 2021, and in other countries at later dates.
What Effect Will This Have on the Market and Crypto?
The adoption of card-based payment systems by companies like ZenGo X, Coinbase, and others will have a myriad of effects on the financial technology market, cryptocurrencies, and fiat currencies. Some of these effects will bring benefit; others could be negative.
Generally, the effect the Visa payment system will have on the fintech market will be positive. As mentioned above, several companies have adopted the Visa payment system, and if other companies offering crypto wallets (like https://wlxwallet.com/ and many others) want to stay competitive, they will have to adopt them as well. Visa’s entrance into this field of the fintech market will likely cause other card companies like MasterCard, American Express, etc. to follow and offer services to wallet providers. As a result, consumers will be able to choose from dozens of different companies. All of these companies will offer different rates, fees, and services, all of which will appeal to different types of customers.
Besides the fintech market, the adoption of card-based payment systems like Visa will make cryptocurrency more accessible and easier to use. One of the problems with cryptocurrencies is that transaction times are slow. Bitcoin and Litecoin are notoriously slow, taking 60 and 30 minutes respectively to confirm. There are few, if any, cryptocurrencies with speeds faster than six minutes. While this may not be a major issue to those engaging in online transactions, for those who want to purchase something as small as a cup of coffee, it is a problem. Who wants to stand in front of a barista for an hour waiting for a payment to process? Visa can handle tens of thousands of transactions per second. When someone swipes his regular fiat visa card to make a purchase, the transaction is usually completed in a second or two. Now, thanks to companies like ZenGo, transaction speeds with cryptocurrencies have the potential to be as fast as transactions with fiat dollars.
The adoption of card-based payment systems may have the effect of stabilizing cryptocurrency prices. One reason why cryptocurrency prices wildly fluctuate is that they are highly speculative investments. Since they cannot be used at the local store, many people hold onto them until they reach an incredibly high value, and then comes a massive sell-off. The cycle repeats over and over again. If cryptocurrencies become more than get-rich-quick speculative investments and instead become viable mediums of exchange used by hundreds of millions of people and widely accepted, they could become stable currencies.
There is one possible negative aspect of the implementation of new card payment systems. One question that needs to be considered seriously is how their adoption will affect fiat currencies. Fiat currencies like the dollar are valuable because they are used for everyday purchases and large purchases of oil, grain, and other commodities. However, if enough people and countries begin thinking that they are better off using cryptocurrencies to buy cups of coffee or crude oil because they have more purchasing power and are just as easy to use as the dollar thanks to faster and more efficient payment systems, the value of fiat could fall against cryptocurrencies.
Implementing the Visa system by companies like ZenGo X is the best thing that could have happened to cryptocurrency holders. Now they will be able to use their funds wherever Visa cards are accepted. However, the implications are wider than just being able to swipe a card at the local Dollar General. The increasing use of card-based systems for cryptocurrency wallets will result in greater consumer choice. Furthermore, the evolution of cryptocurrencies into widely used mediums of exchange could result in their prices stabilizing and the possible end of fiat’s hegemony.