On Monday VISA announced that it had purchased an NFT for the company’s balance sheet. The global payment processor said that it bought a “CryptoPunk,” which is just one of thousands of NFT-based digital avatars that have risen in popularity in recent months.
The purchase was 49.5 Ether or the equivalent of nearly $150,000 in American dollars.
What is a NFT? NFT stands for Non-Fungible Token, are unique digital assets that represent ownership of virtual items. The current market for NFT’s is hotter than ever and this most recent publicized purchase adds to the hype.
AriZona Iced Tea also just announced that they had purchased a Bored Ape Yacht Club Bored Ape, however the announcement was marred with controversy as project creator Yuga Labs told Decrypt that Arizona was not authorized to use its branding the way they did in the announcement.
CryptoPunks creator Larva Labs confirmed that Visa bought NFT CryptoPunk #7610.
Unlike other cryptocurrency like Bitcoin or Litecoin, a NFT cannot be exchanged as each is uniquely created and minted on the blockchain. This is what creates scarcity and in-turn value for the latest digital art.
This is why these digital avatars are being compared to rare collectibles such as those collectors are investing in on Rally like vintage sports cards or limited works of art.
Cuy Sheffield, head of crypto at Visa shared more details in a blogpost, “We think NFTs will play an important role in the future of retail, social media, entertainment, and commerce.”
He elaborated further saying “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.” “CryptoPunks have become a cultural icon for the crypto community and with our CryptoPunk purchase, we’re jumping in feet first,” Sheffield said. “This is just the beginning of our work in this space.”
Anchorage, a federally-chartered digital asset bank, facilitated the purchase, Visa said.