Visa joins the NFT craze with first $150,000 purchase

By Gaia Lamperti

The hyped world of digital assets has a new joiner, as payment giant Visa acquired its first non-fungible token (NFT) for the equivalent of $150,000 in Ether, taking a first step in the fast-growing ecosystem.

The deal involved CryptoPunk 7610, one of the 10,000 unique digital collectible characters with proof of ownership stored on the Ethereum blockchain. CryptoPunks are considered the original NFTs, launched in 2017 by Larva Labs and generated algorithmically, each one of them has a unique combination of features. Visa’s CryptoPunk is a female avatar with mohawk, green eyes and bright red lipstick.

The acquisition was carried out thanks to the support of Anchorage Digital, a newly licensed bank, which facilitated the transaction and is keeping custody of the NFT for Visa in a digital vault – the first known US bank to do so.

Cuy Sheffield, Visa’s Head of Crypto said that the company thinks NFTs will “play an important role in the future of retail, social media, entertainment, and commerce,” as he said during a Q&A .“We felt that CryptoPunks would be a great addition to our collection of artifacts that can chart and celebrate the past, present, and future of commerce,” he added in an interview.

Visa is not new to collectibles and owns several vintage pieces related to commerce such as early paper credit cards and the predecessors of electronic point-of-sale terminals that were used to record transactions.

But what are NFTs?

As you may have heard already, NFTs are the latest craze from all things crypto and they are unique, non-replaceable (hence, “non-fungible”) digital assets which could be anything from digital art, multimedia, collectibles, articles, and even digital fashion.

Once purchased, a smart contract certifies their authenticity, provenance, and ownership, recording the deal on the blockchain. Most NFTs are part of the Ethereum blockchain but it is worth noting that other blockchains can implement their own versions of NFTs too.

Whilst NFTs have been around since 2008, in 2021 the market saw an impressive growth with massive deals like the $390,000-worth NFT of a video by musician Grimes or the $6.6 million for a video by digital artist Beeple.

The acquisition’s relevance

With the NFTs marketplace accounting for $1 billion in payment volume in August, Visa is looking into how to apply its expertise in seamless and secure digital payments to the NFT-commerce, making it more accessible and useable for both buyers and sellers.

Wider support from a traditional financial institution like Visa could escalate the already thriving NFT market boosting customer engagement and opening relevant opportunities for creators. As blockchain scalability platform Skale Labs’ CEO Jack O’Holleran puts it: “We are starting to see a critical mass of institutional players and payments service providers engaging with Ethereum, DeFi, and digital collectibles. Visa’s acquisition of a CryptoPunk was not just a learning experience for them, but a statement about the importance of blockchain and Crypto in the future of finance and consumer goods and services. This transaction represents the first-ever US-based financial institution facilitating the custody of a special digital asset. Clearly, NFTs are solidifying their central role in the future of social media, investing, and entertainment.”