Payments provider Verrency and virtual currency platform Coinify are partnering to enable customers to carry out digital currency payments through their banks, Verrency CEO David Link told Bank Innovation. 

Banks will be able to use Verrency’s middleware software, which upgrades a bank’s existing software without replacing it, to offer virtual currency as a payment option on customers’ existing bank cards. As a user, should a bank choose to implement the feature, “you would notice the ability on your own banking app for you to select that funding source for your debit or credit card,” Link said, adding that the technology will enable banks to experiment within the digital currency space.

“When you have stable tokens or fiat tokens, eventually there is going to be a place for them in mainstream usage,” Link said, pointing to Facebook’s virtual currency Libra and China’s proposed state-backed currency as examples. “Banks will need to offer customers the ability to use those tokens without replacing their existing payment methods or infrastructure.”

While the feature currently is available for bank implementation, no banks have signed on yet. Link noted that Verrency is in discussions with a few banks.

See also: Libra not a threat, ‘still playing out,’ Remitly CEO Oppenheimer says

Corporate and financial services regulatory lawyer Israel Bitton of fintech-focused David Rabbi law firm is enthusiastic about Verrency and Coinify’s partnership because of the tech infrastructure layer that allows digital currency payments to take place.

“Verrency has laid out banking infrastructure that will merge traditional banking payment methods with cryptocurrencies such as bitcoin into mainstream banking systems,” Bitton said in a message to Bank Innovation. “Their digital banking platform already is being used by banks in Europe and the Middle East, and the addition of this new tool to their platform makes them increasingly attractive to many banks that recently have been looking to enter the digital currency and blockchain world.”

Bitton noted that cryptocurrency use has “seen a complete shift” over the past two years, “since the days of speculative ICO investments and frauds” in 2017. Cryptocurrencies, he said, are being legitimized “as a means of payment, which clearly has been evidenced by the recent rise of stable coins such as Facebook’s Libra, IBM, Goldman Sachs, JPMorgan and this unique partnership between Coinify and Verrency.”

Others, however, are less enthusiastic about the tool’s prospects. According to Marc Boiron, a transactions-focused attorney at FisherBroyles, the challenge is that there aren’t compelling use cases for customers to use cryptocurrencies as payment methods.

“Frankly, I don’t think that at this point it’s huge news,” Boiron told Bank Innovation. “The reason for [crypto payment] adoption being so low has little to do with actually not being able to use crypto in an easy way. There’s no crypto that makes sense to hold for use.”

Boiron pointed out that even the largest cryptocurrencies, like bitcoin and ether, are viewed as stores of unstable value rather than forms of payment. Banks also may have concerns with liability and compliance, he noted.

“The reason for that is partially because bitcoin is slow,” Boiron explained. “And that’s where [Verrency and Coinify’s] technology is actually important. Probably the reason why people care about it is because it solves that problem. It says, even if bitcoin is slow, we’re going to let you pay immediately.”

The problem that Verrency and Coinify’s technology doesn’t solve, however, is that most cryptocurrencies are “extremely volatile” assets with “upside potential,” which makes very few people actually want to spend them, explained Boiron. “So even if you have technology that allows you to spend it easily, it’s probably not going to be used all that much.”

The Verrency-Coinify tie-up comes at a time when regulators are looking to digital currencies with increased interest. For example, China announced earlier this month that it would be accelerating its research into a fiat-backed cryptocurrency and already has filed 74 patents on it.

Meanwhile, digital currency Libra, which is backed by Facebook and the other 27 current members of the Libra Association, continues to rankle regulators and incumbent banks. The digital cash would be offered via a wallet embedded on Messenger and WhatsApp. The Senate Banking Committee raised concerns about regulatory and competitive risks that could accompany Libra in a hearing last month. One of the committee’s concerns was that the technology could give Facebook a step up over banks and other payment solutions companies foraying into cryptocurrencies.