At Visa’s annual shareholder meeting Tuesday, Visa CEO Al Kelly declared the card giant remains committed to cryptocurrency uses despite their recent turmoil. He also hinted at potential management team changes.
The company hasn’t incurred any credit losses in the wake of recent crypto industry setbacks, and investments it made in crypto startups or funds are “immaterial,” Kelly said.
Following the collapse of the crypto exchange FTX in November, other crypto businesses have been negatively impacted, including crypto lender BlockFi, which paused withdrawals because of its exposure to FTX.
Support from major companies such as Visa, which is the largest card network company in the U.S., could buttress the nascent crypto industry. That’s particularly true in Visa’s case, given its support in providing consumers channels for moving their assets between cryptocurrencies and government-issued currencies.
Stablecoins, which are a form of crypto typically pegged to a fiat currency, remain promising, as do related digital assets known as central bank digital currencies, Kelly said in response to a shareholder question relayed by a Visa executive at the meeting.
“We continue to believe that stablecoins and central bank digital currencies have the potential to play a meaningful role in the payments space,” Kelly said.
The Visa CEO went on to extoll the benefit of the company’s partnerships worldwide that allow consumers to buy cryptocurrencies using Visa cards and to connect their digital wallets to cards so that they can spend money tied to the value of their crypto holdings.
While he said he could understand why a shareholder would ask the question about crypto, given recent high-profile crypto failures, he told his audience that the company would be careful not to put its reputation at risk in the arena.
Management team turnover?
The annual meeting is the last for Kelly as CEO at Visa because next month he will turn the CEO job over to Ryan McInerney, though he will remain as a full-time executive chairman, he said. In referencing McInerney, Kelly suggested that there may be changes to the San Francisco-based company’s management team in connection with the CEO shift.
“I will do all I can to support Ryan and his newly configured leadership team,” Kelly said. “I will be rooting for them at all times and I know that Visa will get to new heights under their direction.”
A Visa spokesperson declined to comment on any executive changes, citing the company’s plan to deliver an earnings report later today. It’s not uncommon for a new CEO to change a leadership team, but it can sometimes herald strategic shifts.
A shareholder proposal calling Visa to permanently separate the CEO and board chairman jobs failed to pass at the annual meeting, attracting only 17.4% of votes cast. The company had recommended shareholders vote against the proposal.
Eschewing curbs on legal sales
Kelly also discussed other topics at the meeting, including Visa’s use of capital; its stock price relative to the business performance; and the company’s role in applying standards as it facilitates transactions.
In response to one shareholder’s question regarding Visa’s role in facilitating transactions, Kelly took the opportunity to reiterate the company’s prior criticism of standard-setting efforts that could put restrictions on legal sales.
Last year, the International Organization for Standardization approved a unique merchant category code for gun and ammunition sellers. The new ISO code, which has yet to be implemented, will provide a means to track gun sales in card transactions.
“In my opinion, asking private companies to serve as moral arbiters on which legal goods can be bought or sold sets a very dangerous precedent,” Kelly said. “Furthermore, we believe that managing through subjective standards would expose Visa to significant reputational and other risks and ultimately become untenable to manage. With that said, we do not tolerate the use of our network or products for any illegal activity.”
Kelly’s response also speaks to Visa’s entanglement last year in a court case related to child pornography. In reaction to a ruling in that case, Kelly also stressed that Visa isn’t in the business of making “moral judgments” with regard to legal purchases using the company’s card network.