Visa Integrates Crypto Withdrawals With Transak, But Experts Worry About Security

Payment giant Visa V has partnered with Web3 infrastructure provider Transak to bypass centralized exchanges and introduce cryptocurrency to fiat withdrawals directly from users' wallets. 

Industry experts say the decision raises concerns about security, user experience and the potential impact on the decentralized nature of digital currencies.

What Happened: Users in 145 countries can now cash out over 40 cryptocurrencies and pay at 130 million merchant locations on Visa's network, Cointelegraph reported.

Visa's involvement in cryptocurrency began in 2020 with its partnership with blockchain firm Circle USDC/USD to support the USDC stablecoin on certain Visa cards.

In September, Visa expanded its crypto services by supporting USDC payments settled on the Solana SOL/USD blockchain.

Also Read: Dwight Howard's NFT Collection Falls Flat, Accused Of Alleged 'Rug Pull' By On-Chain Investigator

Why It Matters: Harshit Gangwar, Marketing Head and Investor Relations Lead at Transak views this collaboration as a significant stride toward the mainstream acceptance and utilization of cryptocurrencies.

Speaking with Benzinga, he said, “This is a major step towards mainstream acceptance and utilization of cryptocurrencies,” pointing out the enhanced accessibility and convenience of the transactions facilitated by this integration.

Lorenzo Santos, Senior Product Manager at MetaMask, lauded the collaboration, saying, “Transak’s integration with Visa opens new horizons for MetaMask users globally, providing more flexibility in smooth cryptocurrency to fiat conversions.”

Transak's role in this integration is pivotal as it holds licenses in multiple jurisdictions and ensures compliance with Know-Your-Customer and Anti-Money Laundering regulations, enabling legal transactions.

Yanilsa Gonzalez-Ore, North America Head of Visa Direct, underlined the user-centric benefits of this integration, stating, “By enabling real-time card withdrawals through Visa Direct, Transak is delivering a faster, simpler and more connected experience for its users — making it easier to convert crypto balances into fiat.”

However, reactions to the integration were not only positive.

Steve Crew, founder of Golden Road Reborn, cautioned about the possible risks, including heightened security threats and user interface challenges.

Eitan Katz, CEO and co-founder at Kima, also voiced apprehensions, suggesting that this initiative might inadvertently lean towards traditional financial systems, potentially undermining the core principles of cryptocurrency.

The partnership between Visa and Transak enables users to transfer cryptocurrencies like Bitcoin BTC/USD from wallets such as MetaMask directly to a Visa debit card.

What's Next: The news follows Tether's quarterly attestation report, which highlighted a $2.85 billion profit in the final quarter of 2023.

Read Next: FTX Aims Repay Customers, 'FTX 2.0' Off The Table: 'The Objective Is Within Reach' (UPDATED)

Image: Shutterstock