- Discover Financial hired Alexandra Prodromos last week as a new product manager of blockchain and digital currency, according to her LinkedIn profile. A spokesman for the Riverwoods, Illinois, company declined to comment on employee matters, but Discover had posted a job opening for the position earlier this year.
- Prodromos has created a name for herself in the Chicago area as a knowledgeable professional on the topic of distributed-ledger technology, the blockchain that underpins cryptocurrencies, and on smart contracts, and digital assets generally, including cryptocurrencies. She had served as executive director of the nonprofit Chicago Blockchain Center and helped inspire the Illinois Blockchain Initiative, according to a Crain's Chicago Business report.
- With the new hire, Discover sought a manager who would create a roadmap for developing new products in the area; enhance the company's capabilities in the realm; conduct research to identify new payment products; and make recommendations to the company's leadership about those endeavors, according the company's ad for the opening.
U.S. credit card companies are racing to respond to rising global demand for new digital payment products and ways to use cryptocurrencies in payment processes. The increased attention to distributed-ledger technology and cryptocurrencies followed a jump last year in the value of the crypto sphere's flagship denomination, Bitcoin. The currency has more than tripled in value from a year ago but has lost about half its worth since peaking at $64,863 on April 14, according to Yahoo Finance.
About 21 million Americans, or 14% of the population, own a cryptocurrency, according to the crypto exchange company Gemini. However, the tendency for volatility in the market has led even crypto advocates such as billionaire entrepreneur Mark Cuban to call for more regulation in the arena.
Prodromos worked with Illinois state officials on digital asset issues, according to the Crain's Chicago Business profile. So she is aware of evolving regulation and legislation in the industry. Given her involvement with various digital asset initiatives, conferences and organizations since 2016, she is also well-networked.
Discover spokesman Jon Drummond declined to even confirm whether Prodromos had been hired, but said, "As for our strategic path in cryptocurrency, we’re not ready to say too much about that, but we are closely monitoring the rapidly evolving market and related regulatory developments. We want to ensure that customers are provided with strong consumer protections as we move forward."
With hundreds of different cryptocurrencies now involved in billions of dollars of transactions worldwide, there is a major incentive for the card companies to have a hand in the emerging crypto marketplace. With China's decision this year to create a central bank digital currency and other countries, including the U.S., considering such a move, the stakes will rise even higher.
Visa embraced the new asset over the past year, rolling out its own stablecoin pilot program using the cryptocurrency Ethereum, and outlining a number of strategies it plans to pursue in the arena, including a partnership with Crypto.com to offer a prepaid card and allowing settlement of transactions in a digital currency using the stablecoin USD Coin. It's also partnering with Crypto.com, Bitpanda and Coinbase to enable cash payouts from cryptocurrencies into fiat currencies.
Based on that laundry list of crypto steps, it's not surprising that Visa got an early start, hiring a vice president to head crypto initiatives, Cuy Sheffield, in 2019.
In the $3.6 trillion credit card market, Visa is by far the largest company and Discover is the fourth-biggest, with Mastercard and American Express more evenly matched for the no. 2 and 3 spots, respectively, according to Nilson Report figures for 2020.
An American Express spokeswoman didn't name a particular executive overseeing digital asset efforts, but said "responsibilities for blockchain and digital currency fall across a few areas of our businesses including Amex Ventures, Digital Labs and Technologies."
At Mastercard, Jess Turner is head of new digital infrastructure and fintech, overseeing digital asset and blockchain issues, a company spokesman said.
The potential upside to crypto has caused some banks that previously eschewed digital assets to reconsider. Goldman Sachs relaunched its cryptocurrency trading desk in March — less than a year after the bank labeled Bitcoin an "unsuitable" investment for clients.
JPMorgan Chase extended banking services last year to crypto exchanges Coinbase and Gemini — and this year unveiled its own digital token, JPM Coin — less than three years after CEO Jamie Dimon called Bitcoin "a fraud."