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Visa jumps into the NFT craze, buying a ‘CryptoPunk’ for $150,000

Visa jumps into the NFT craze, buying a ‘CryptoPunk’ for $150,000

23 Aug 2021

CryptoPunks — one of the most popular non-fungible tokens — displayed in Times Square on May 12, 2021.

Alexi Rosenfeld | Getty Images

Visa is the latest major company jumping into the NFT craze.

The payments processor said Monday it bought a “CryptoPunk,” one of thousands of NFT-based digital avatars, for nearly $150,000 in ethereum.

An NFT — which stands for non-fungible token — is a unique digital asset designed to represent ownership of a virtual item. Unlike bitcoin and other cryptocurrencies, NFTs can’t be exchanged like-for-like with another NFTs.

Proponents say this makes NFTs scarce, driving up their value. NFTs have often been compared to physical collectible items like rare trading cards and works of art.

“We think NFTs will play an important role in the future of retail, social media, entertainment, and commerce,” Cuy Sheffield, head of crypto at Visa, said in a blogpost Monday.

“To help our clients and partners participate, we need a firsthand understanding of the infrastructure requirements for a global brand to purchase, store, and leverage an NFT.”

Sheffield said CryptoPunks have become a “cultural icon for the crypto community.”

“With our CryptoPunk purchase, we’re jumping in feet first,” he said. “This is just the beginning of our work in this space.”

Anchorage, a federally-chartered digital asset bank, facilitated the purchase, Visa said.

Big firms join NFT craze

Several big firms have been experimenting with NFTs lately.

Christie’s has auctioned off several NFTs, some worth millions of dollars. The auction house set records in March when an image created by the digital artist Beeple sold for $69 million.

Meanwhile, a number of media publications, including CNN, The New York Times and Fortune magazine, have sold NFTs of their own.

But some critics are skeptical of NFTs. While such tokens represent a digital certificate of ownership, buyers don’t own the underlying item, and internet users can still view the associated media online. Some people have even stolen other artists’ work and gone on to sell them as NFTs.

“The purchaser of Beeple’s $69 million NFT artwork, ‘Everydays – The First 5000 Days’, owns the unique token,” Adam Rendle, partner at law firm Taylor Wessing, said in a blogpost.

“They do not, however, own copyright or any other intellectual property rights in the digital artwork itself. They cannot distribute or otherwise commercialise the represented asset.”