Visa’s Secret Crypto Strategy: Fun
Who says business has to be boring?
“The competitive advantage crypto has that most people haven’t understood yet is that we just have more fun,” says Cuy Sheffield, Visa’s head of crypto. The payments giant is practicing what it preaches: It revealed on Monday that it followed the Internet’s “cool kids” and purchased a non-fungible token, or NFT, of a CryptoPunk, one of 10,000 iconic computer-generated characters, for $150,000.
Visa says it bought a “punk”—specifically, No. 7610, a lady sporting a mohawk and green eye makeup—because of the project’s historical significance. While initially given away by a couple of crypto pioneers in 2017, the pixelated face-pics are now selling anywhere from hundreds of thousands to millions of dollars. The project represents one of the earliest and most influential experiments involving NFTs, verifiably unique crypto tokens that make digital content—anything from artwork to virtual real estate to pictures of rocks—traceable and tradeable on a blockchain, the public ledger that underpins cryptocurrencies. The punk art has also spawned myriad copycats, including “bored apes,” “weird whales,” and “pudgy penguins.”
“Owning a punk is a signal. It signifies that you were either there early enough” to get one, Sheffield says, or that “you had enough conviction in the NFT ecosystem, and in the role they played, to be willing to spend” a lot of money to buy one.
— VisaNews August 24, 2021
While the acquisition may seem odd for a corporation, it isn’t so unusual. Many companies, including many major banks and Wall Street firms, like JPMorgan Chase, UBS, and Deutsche Bank, collect famous artworks and display them at their offices. Visa already has an archive of financial artifacts, including early paper credit cards and zip-zap “knuckle buster” machines for manual card-imprinting. And other companies have already begun experimenting with NFTs too, including Coca-Cola and Anheuser-Busch.
Crypto is just the latest technologic frontier for business—and Sheffield says he’s been having a blast getting in on the action. “In the past six months, I feel I’ve had the most fun I’ve had my entire career. I feel like I’m a kid again,” he tells Fortune.
Visa is making crypto inroads. The company sees lucrative opportunity in the tech behind cryptocurrencies like Bitcoin and Ethereum. Sheffield equates the commercial potential of NFTs to the rise of e-commerce enabled by the Internet. Visa could help mediate NFT interactions between merchants and customers, for instance.
While critics say NFTs are spurious, since digital content can be replicated for free online, proponents say the tech holds other appeal. Unlike physical goods, NFTs don’t suffer wear-and-tear, and anyone can trade them instantly and cheaply. “We think there are going to be millions of new merchants that emerge that are individuals, that are creators, that can reach this global audience. It’s just, it’s powerful,” Sheffield says. “That’s the world that is coming here.”
The CryptoPunk-purchase has been a learning experience for Visa too. When the company’s crypto wallet address became publicly known, people started sending it all sorts of strange NFT items, including cartoons of naked body parts. “You can’t prevent someone from sending you something. I think, in many ways, it’s kind of like spam email,” Sheffield says.
Companies are beginning to catch on that it pays to endorse play. The folks at upstart brokerage Robinhood understand the value of a good laugh. A quarter of the company’s second quarter revenue derived from trading…Dogecoin, a jokey, doggo-themed cryptocurrency. Heck, these past few weeks at Fortune—where we sold NFTs of our own for $1.3 million—have been among the most fun in my career, too.
Will more businesses soon crash the party? “As long as TradFi”—traditional finance, that is—”is anti-fun, they’re gonna have some trouble getting into crypto,” Sheffield says.