Amid the wild price swings, amid the fits and starts toward mainstream acceptance, might cryptocurrencies be the bridge toward financial inclusion — helping underserved populations improve their financial education, building wealth in the process?
Visa said Wednesday (Feb. 3) that it has launched a pilot program, Visa Crypto APIs, the latest leg in its digital currency strategy that will bring crypto (including bitcoin) to financial firms — and in turn, enable customers to buy and sell those digital assets.
The pilot is being launched with First Boulevard, a neobank focused on the Black community, in an initiative that Cuy Sheffield, head of Crypto at Visa, and Donald Hawkins, CEO and founder of First Boulevard, told Karen Webster is focused on economic empowerment.
“In addition to working with First Boulevard to help them issue debit cards,” said Sheffield, “we’ll be working with them to pilot this new set of crypto [application programming interfaces (APIs)]…we’ll enable First Boulevard customers to buy and sell bitcoin” through digital accounts.
Those crypto transactions, in turn, will be facilitated by Anchorage, a federal chartered digital bank. Wider commercial availability should come later this year, said Visa, which has said that the digital currency strategy is part of the drive to become a network of networks.
It’s a program that marks a departure from solely payments processing, he told Webster. He clarified that the pilot is separate from the Visa debit cards issued by First Boulevard.
“We’ve seen a growing number of digital wallets and neobanks that are looking to add buying and selling bitcoin as a feature that appeals to millennial and Gen Z consumers,” said Sheffield, and Visa will target the financial institutions (FIs) and neobanks that lack the infrastructure to fully embrace crypto assets and blockchains.
As part of the pilot, FIs including First Boulevard are able to harness the Visa network — and specifically the Anchorage infrastructure — to buy and sell bitcoin. The APIs available through the Visa Developer Platform route orders to Anchorage and help Visa clients track consumer balances of crypto held in an omnibus account at Anchorage.
First Boulevard’s Hawkins said the additional capability will indeed enable his mission-driven bank to attract and retain customers. Buying and selling bitcoin — as a functionality — will also serve to help foster financial inclusion for the Black community, he said.
“The wealth gap is the worst it’s ever been,” he told Webster. “Homeownership is worse nowadays than it was in the 1960s. And when you think about assets and wealth building, the Black community in general really doesn’t have that conversation and relationship when it comes to money.”
Educational programs and rewards programs (with cash back for shopping at Black-owned businesses) can help the community reclaim some of its former financial might, said Hawkins, and down the line, buy cryptos at scale.
The potential audience is significant, as Hawkins stated that 48 percent of the Black millennial population has expressed an interest in owning cryptos.
Visa As Crypto ‘Bridge’
“Right now, here are funds that you earn by supporting the community — and also yourself — that now you can invest in cryptocurrency. You can use those funds to put back into your deposit account,” said Hawkins, in a way that automates the wealth-building process.
Sheffield stated that Visa Crypto APIs represents the latest stage in the ongoing effort to make Visa “the bridge between innovative consumer-facing crypto wallets and Visa’s global network of 70 million merchants. The idea is that we can add significant utility to these wallets and these assets by enabling them to be easily spent.”
Visa’s pilot program comes after announcements earlier this year that the company has 35 crypto platforms that issue with Visa, such as Coinbase.
For right now, said Sheffield, on the path toward spendable crypto, Visa is observing that consumers are interacting with bitcoin as if it’s digital gold, a new asset class, but one where crypto (and bitcoin) could serve as gateways for consumers to broaden their financial knowledge. Hawkins maintained that cryptos will become “table stakes” for neobanks serving a diverse range of populations.
Of the partnership with First Boulevard, Sheffield said: “You can’t just throw a new asset class in front of someone. You have to teach them about what it is, how it works. And so, we’re going to be partnering together to provide resources about crypto and about financial literacy that will be integrated into the First Boulevard platform.”
As Sheffield told Webster of making crypto available to underserved communities and the joint efforts with First Boulevard: “This is about how you can provide access to new asset classes and teach people how to save and invest.”
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