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Visa is the most recent large corporation to join the NFT bandwagon.
The payments processor said it paid roughly $150,000 in Ethereum for a "CryptoPunk," one of the thousands of NFT-based digital avatars.
An NFT (non-fungible token) is a one-of-a-kind digital asset used to indicate ownership of a virtual item. NFTs cannot be exchanged like-for-like with other NFTs, unlike bitcoin and other cryptocurrencies.
Proponents argue that this increases the scarcity of NFTs, hence increasing their value. Physical collectibles such as rare trade cards and works of art have been used to compare NFTs.
Cuy Sheffield, Visa's head of crypto, stated in a blog post on Monday." "We think NFTs will play an important role in the future of retail, social media, entertainment, and commerce,"
"With our CryptoPunk purchase, we're jumping in feet first," he said. "This is just the beginning of our work in this space."
The purchase was made possible by Anchorage, a federally chartered digital asset bank, according to Visa.
The NFT frenzy has enticed large corporations. Several large corporations have recently begun experimenting with NFTs.
Several NFTs, some valued millions of dollars, have been auctioned off by Christie's. In March, the auction house made history when a digital artist's image, Beeple, sold for $69 million.
Meanwhile, several news organizations, including CNN, The New York Times, and Fortune magazine, have sold their own NFTs.
However, some skeptics are wary of NFTs. While such tokens serve as a digital certificate of ownership, purchasers do not own the underlying object, and internet users can still access the related media. Some people have even stolen the work of other artists and sold it as NFTs.