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Visa (V) Forays Further into Cryptocurrency Space With BlockFi

Visa Inc. V recently collaborated with BlockFi, to roll out a credit card, which will exclusively reward bitcoin to users after each purchase. Notably, BlockFi is best known for offering enhanced financial products and services to participants in cryptocurrency markets.

Notably, Deserve, which is a credit card firm, and Evolve Bank will work in conjunction with the above-mentioned companies to introduce BlockFi Bitcoin Rewards Credit Card, which is the first credit card to be launched across the crypto ecosystem.

The card, with an annual fee of $200, will be launched first in the United States with the shipping of the same cards commencing in spring 2021.

What makes the credit card noteworthy is that it enables automatic conversion of 1.5% cash back to bitcoin that will keep accruing with every transaction on the card, which in turn will be transferred to the clients’ BlockFi account. This entire procedure will take place on a monthly basis. Further, extra bitcoin rewards in the form of a signup bonus of $250 in bitcoin can also be earned consequent to spending an amount equal to or above $3,000 on the card during the course of initial three months.

Shares of Visa have gained 16.1% in a year compared with the industry’s rally of 10.9%.

Moreover, the company has been actively co-operating with cryptocurrency firms to promote the use of crypto currency. Case in point, the cryptocurrency firm Coinbase introduced the Coinbase Visa debit card across the United States this October. The company also welcomed crypto currency lending and borrowing company Cred to its Fast Track program in September, by virtue of which Cred will be able to take advantage of Visa’s vast network, resources and services to scale up its business.

Visa’s teaming up with the crypto startup Fold to issue a new Visa co-branded card in this April is another noteworthy move. Notably, Fold was also part of Visa’s Fast Track program.

Coming back, the rolling out of BlockFi Bitcoin Rewards Credit Card seems to be in line with the consumer behavior of preferring credit cards over debit cards, the reason being the former equipped with higher reward rates and enhanced purchase protections.

It has to be noted that bitcoin has emerged to be the most popular cryptocurrency amid the COVID-19 pandemic, which triggered volatility accross the worldwide economy and equity markets. It is worth mentioning, bitcoin seemed to be the only alternative investment, which was not affected much by the pandemic. Demand for bitcoin is likely to surge in the days ahead, driven by factors like increased eagerness of institutional investors to adopt bitcoin, inclination to assets that offer protection against inflation and limited supply of the bitcoin.

Furthermore, cryptocurrency being a form of digital currency stands well-poised for growth amid the increased usage of digital transactions, which was gradually gaining popularity but the pandemic accelerated the trend. Also, the same currency facilitates hassle-free and cost-effective currency exchanges.

The presence of a trusted payment facilitator like Visa, which has more than 25 digital currency wallets linked to its systems, further reinforces the belief of individuals in increased usage of crypto and digital currencies. Notably, Visa has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other companies like Mastercard Incorporated MA, PayPal Holdings, Inc. PYPL and Square, Inc. SQ are also undertaking steps to promote increased usage of bitcoin, and crypto development and its universal adoption.

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