Visa Buys a CryptoPunk NFT for $150,000 — What Does It Mean for the Future of Payments?
Add Visa to the growing list of companies diving into unconventional investments. Tesla purchased Bitcoin earlier this year. Then Palantir announced during its earnings call that it had purchased $50 million in gold bars. But Visa’s purchase of a non-fungible token might have great implications for consumers and transactions of the future.
Cuy Sheffield, Visa’s head of crypto, wrote in a blog post, “We think NFTs will play an important role in the future of retail, social media, entertainment and commerce … To help our clients and partners participate, we need a firsthand understanding of the infrastructure requirements for a global brand to purchase, store, and leverage an NFT.”
For its first investment, Visa chose a $150,000 CryptoPunk NFT, a digital avatar that Sheffield said is a “cultural icon for the crypto community.” The company purchased the NFT using Ethereum.
While you can purchase NFTs with crypto, you can’t trade NFTs the way you might other collectibles. That’s because an NFT represents a digital certificate of ownership of a virtual item, not ownership of — or intellectual property rights to — the item itself, CNBC reported. The underlying item remains publicly accessible online. However, NFTs are often compared to physical collectibles such as works of art, sneakers or even rare baseball cards. But unlike physical assets, you don’t have to worry about your valuable items being damaged in a fire or flood and, while theft can happen, cybersecurity measures make it a rare occurrence.
Visa is not the first company to adopt NFTs as a form of investment or currency. Auction house Christie’s has sold NFTs of rare artwork for as much as $69 million dollars, and CNN, The New York Times and Fortune have sold NFTs they created, according to CNBC.
Although Visa did not elaborate on its reasons for purchasing the NFT, the purchase could lead to a future where the payment processing company accepts alternative forms of payment, including crypto and NFTs.
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