Why did Visa buy a CryptoPunk worth 150,000 USD?

Visa is the most recent major corporation to join the NFT frenzy. The transactions processor announced on August 23 that it had purchased a “CryptoPunk”, one of the thousands of NFT-based digital avatars, for well almost 150,000 USD in Ether, joining the burgeoning craze over digital assets, which some belief might be a huge game-changer in the domains of art, music, and virtual ownership of assets.

Cuy Sheffield, Visa’s VP, said during an emailed statement to MarketWatch on August 23, “We want to have a voice at the board as the crypto ecosystem grows”.

The Visa official explained, “By actually engaging in this sector, we get greater personal knowledge, eventually enabling us to effectively assist our clients when they explore the market”.

Cuy Sheffield wrote in a blog post on Monday, “We believe NFTs will serve a key part in the future of retail, social media, entertainment, and commerce”.

“We want to have a personal understanding of the infrastructural needs for a multinational brand to acquire, hold, and use an NFT to let our customers and collaborators participate”. CryptoPunks are a “cultural symbol for the crypto world”, according to Sheffield. “We are diving in headfirst with our CryptoPunk acquisition,” he added. “Our effort in this sector is only getting started.”

The transaction was made possible by Anchorage, a legally authorized digital asset bank, according to Visa.

Several large corporations have recently begun dabbling with NFTs. Numerous NFTs; Christie’s has sold off some valued millions of dollars. In March, the auction house achieved a new milestone when a digital artist Beeple's work, was sold for 69 million USD.

However, some news organizations, like CNN, The New York Times, and Fortune magazine, have sold their NFTs. However, some skeptics are wary about NFTs. While such tokens serve as a digital certificate of possession, purchasers do not own the actual object, and web users can still access the linked material. Some individuals have even pirated the works of other artists and sold them as NFTs.

In this example, the largest U.S. card network purchased one of the CryptoPunk series' distinctive avatars, a group of 10,000 pixel-art figures created by Larva Labs in 2017, which have come to symbolize the NFT frenzy. Shalom Meckenzie, an Israeli entrepreneur, paid $11.8 million for CryptoPunk #7523 at Sotheby's in June. Visa's acquisition is a "wonderful approach to increase awareness about the possibilities of this sector while also giving us a chance to understand and assist our customers to understand it," according to Sheffield.

Furthermore, NFTs are regarded as opening up new business strategies that did not previously exist, such as for artists who may add conditions to an NFT that assures they receive a portion of the revenues every occasion it is traded, allowing them to profit if their artwork appreciates. Within the easily traceable domain of blockchain, NFTs also allows singers and sports figures the ability to offer additional rewards to their followers.

Visa claims it will not be the last big financial firm to acquire an NFT. “It was difficult to conceive that every big business would have a proactively regulated profile and connect directly with these internet communities in the early days of social media,” Sheffield stated.

“Correspondingly, while Visa is the first big brand to do so, we believe that many more businesses will realize the benefit of accumulating NFTs to represent their brand identities and engage with enthusiastic communities of creators and collectors over time,” added the executive.

Visa began testing the use of digital money to process payments on its system earlier this year. Earlier in 2021, MasterCard also stated that several cryptocurrencies would be supported on its network. Consumers are becoming more interested in such offerings, according to officials from both firms.

Visa's measures came after bitcoin soared to its greatest level since May, reclaiming a value of about $50,000, while the larger crypto complex rose to a value of $2.1 trillion, also around its all-time highs.