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Visa buys CryptoPunk - Let's understand why?

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Avatar for Cyekmyster
Written by   5
1 month ago

 

An interesting story that caught my eye while scrolling CoinMarketCap's telegram announcement channel was Visa having bought a CryptoPunk. A green-eyed female, sporting a Mohawk, No. 7610 CryptoPunk for $150k. It got me intrigued and I wanted to dive further into the depths. A credit card company, a payment processor, buying a culturally iconic CryptoPunk NFT is definitely a development of sorts.

The world has transitioned from the physical realms to the digital realms and art for one has moved beyond museums and galleries into online marketplaces. The trust has evolved from humans to trustless systems through smart contracts. Only time will tell how life would transition further into the simplicities and complexities of modern technology. But, why would a credit card company decide to invest in an NFT? How does it serve its unequivocal goal of being at loggerheads with the cryptocurrency and blockchain ecosystem especially when there is a clear conflict of interest? 

Blockchain technology has become an unstoppable force. With use cases increasing into diversified domains, it simply cannot be ignored. The existing setups will have to find acceptance for the growing ecosystem and help it to shape the world for prosperity. That's an ideal world and there is nothing ideal about the one we live in.

I took a deep pause and pondered at my naivety. If they can't control it, they rather tag along and eat a piece of the pie.

The truth of the mainstream population drifting into the blockchain world is a great opportunity for the traditional financial setups to venture out in these territories for diversification - in the pursuit of newer opportunities. "To help out clients and partners participate, we need a firsthand understanding of the infrastructure requirements for a global brand to purchase, store, and leverage an NFT."
This sale is a portal for Visa to pitch its services as a crypto consultant.

The sale happened on 18th August but made headlines on 23rd coinciding with Visa's whitepaper for businesses and brands to better understand NFTs (sounds like a sales pitch). Oh yes, that's exactly what it is. And what would have made a bigger noise than buying one of the 10,000 24x24 pixel images of the CryptoPunk collection? Almost forgot, it has red lipstick on it. 

What's further interesting is that the credit card company didn't take custody of this 49.5 ETH worth art piece but instead a newly-licensed bank called Anchorage, helped facilitate this deal. Now Anchorage is the first known US bank to have custody of such a novel asset. The CryptoPunk is secured in Visa's digital vault accessible with Visa's private key. Anchorage claims the security of a heavily blinded digital door. Wonder who lights it up!

Visa wasn't required to go through a full KYC process. But Anchorage still made sure to check that box. That got me confused but made sense because they want other corporates and banking giants to follow suit and this could very well serve as a blueprint for that. With billions of dollars changing hands into NFTs, the market is only growing with increasing use cases.  

Cut Sheffield, head of Crypto at Visa, spoke of particular interest in the cross-section of NFTs and sports. "NFTs are gaining momentum as digital-first sports memorabilia," he said while adding "We expect a huge range of new cases in the years ahead."

Visa called this to be only the beginning of their work in the space. It is interesting to see big companies coming together to hop on the bandwagon. From CNN to Fortune magazine, all have sold their own NFTs.
Has the sale made enough noise to grab the needed attention, my guess - way more for its worth!

 

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