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If 2021 has taught us anything about digital currencies, it’s that big banks and major payments providers are now feeling more comfortable with Bitcoin (BTC). While the CEO of PayPal and other large corporations are expressing excitement for crypto payments and salaries paid in Bitcoin, executives from Visa, JPMorgan and ING all agree that Bitcoin is still an investment vehicle rather than a currency. 

This notion was revealed during a panel discussion entitled “Buying with Bitcoin,” which took place during Forbes’ “2021 Blockchain 50 Symposium: Crypto Goes Corporate” online event. Michael del Castillo, associate editor at Forbes, led the discussion and was joined by Umar Farooq, CEO of JPMorgan’s blockchain unit Onyx; Mariana Gomez de la Villa, program director for distributed ledger technology at ING; and Cuy Sheffield, vice president and head of crypto at Visa.

Have Bitcoin payments advanced since 2014?

When panelists were asked whether or not anything has changed for Bitcoin payments since 2014, all three executives noted that the primary use case for Bitcoin is still as a store of value. Farooq pointed out that accessibility is the only major change Bitcoin payments have undergone since 2014:

“Square and PayPal, for instance, are enabling easier ways to utilize Bitcoin. Although, I think Bitcoin payments remain more as a marketing play for many large companies.”

While Farooq mentioned that consumers can certainly pay for items using Bitcoin, the volatility creates a major challenge. He further pointed out that tax implications create even more complications when it comes to crypto payments.

Sheffield noted that Visa is seeing growing demand from customers wanting to access Bitcoin, yet many still view the digital currency as more of a “savings account.” As such, Sheffield explained that Visa is currently focused on “stacking sats,” or allowing customers to acquire small units of Bitcoin overtime. “Companies like Fold are enabling customers to spend fiat and then earn Bitcoin back.This has been our primary motivation,” he remarked.

Echoing Farooq and Sheffield, Gomez de la Villa noted that Bitcoin remains an investment, primarily due to challenges such as ongoing high transaction fees. “I don’t think Bitcoin as a means of payment will be widely used right now,” she said.

JPM Coin is not a cryptocurrency

Given the sentiment expressed by all three panelists regarding Bitcoin payments, it shouldn’t come as a surprise that Farooq mentioned that JPM Coin — JPMorgan’s digital currency offering that was announced in 2019 — is not a cryptocurrency.

Rather, Farooq explained that JPM Coin was created specifically to meet the needs of JPMorgan’s Fortune 500 and Fortune 1000 corporate clients. “Our clients want access to programmable money, conditional payments and future capabilities. But they don’t care as much about being on a fully decentralized, public network with autonomy,” he said.

Farooq noted that JPM Coin provides corporations with the future capabilities of payments but acts more like a digitalized M1, or the money supply typically issued by banks. He said:

“It’s our point of view that corporations can come and interact on the platform to perform decentralized transactions across the broader ecosystem, allowing them access to programmable money. JPM Coin is not a pure cryptocurrency because, in my mind, a pure cryptocurrency is something with independent value on a public blockchain, like Bitcoin or Ether.”

In addition to JPM Coin, Farooq discussed the reasons behind the recent $65-million investment round in ConsenSys, which was led by major financial institutions including JPMorgan. According to the software company ConsenSys, the new funding will help expand its enterprise blockchain infrastructure solutions to enable more decentralized finance and Web 3.0 applications on Ethereum. Given this announcement, del Castillo asked Farooq if JPM Coin is a competitor to Ether (ETH).

According to Farooq, JPM Coin is not competing with Ether, noting that JPM Coin specifically caters to JPMorgan’s clients and not to retail investors. Farooq also mentioned that although JPMorgan built the Quorum platform on Ethereum, which has now become ConsenSys Quorum, the idea has been for those two platforms to merge to allow for JPMorgan’s blockchain solution to be built on the network that ConsenSys runs on. “We have a great relationship with ConsenSys and will continue to collaborate on the core technology with them,” Farooq said.

Stablecoins will enable new payment methods

When asked about the future of stablecoins, all three panelists agreed that stablecoins could be a useful tool for cross-border transactions, along with a solution that will enable fintechs and startups to build financial products upon.

Stablecoins have been of particular interest to Visa, as the major credit card provider recently announced a pilot program that will allow its partners to leverage the Ethereum blockchain to settle fiat transactions. According to an announcement from Visa, the company will be partnering with the crypto exchange and card issuer Crypto.com to provide a crypto settlement platform for fiat transactions later this year. This will enable Visa’s partners to exchange the stablecoin USD Coin (USDC) over Visa’s payment network to clear fiat transactions.

Sheffield noted that Visa has been following the stablecoin ecosystem closely over the past few years, with a special focus on USD Coin:

“We’ve been impressed and excited to see USD Coin and a developer ecosystem emerge around it. There is also an increasing number of fintech and crypto companies actually building their businesses on top of USDC.”

Sheffield mentioned that USD Coin is becoming a “crypto-native dollar-based treasury infrastructure,” noting that work is being done to ensure Visa acts as the bridge between USD Coin payments and innovative crypto companies.

In regards to cross-border transactions, Sheffield pointed out that stablecoins will enable new digital wallet products, followed by more efficient cross-border business-to-business payments leveraged by non-crypto companies. Echoing Sheffield, Farooq noted that stablecoins will help on the cross-border front but pointed out that regulations must first be in place:

“In the short term, stablecoins will act like money in your Apple Wallet — they will be used within closed ecosystems to create and generate value. But the long term depends on regulators becoming comfortable with cross-border payments at scale.”



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