A form of digital money known as Monaco gained as much as 695 percent in value since May 17, when its issuing company tweeted that it would offer a Visa Inc.-branded payment card.
Monaco didn’t have a deal with Visa.
Later that month, Monaco put out a press release describing the benefits of its Visa-branded card.
Again, no agreement with Visa.
Monaco is, however, working with a Visa-licensed issuer, Wirecard AG. As far as Visa goes, Monaco is being vetted through the credit-card issuer’s review process, according to spokeswoman Lea Cademenos.
Cademenos didn’t say how Monaco’s decision to promote two nonexistent relationships with Visa would affect the review process. Wirecard didn’t return requests for comment.
“In retrospect, we probably wouldn’t put the Visa name on there yet,” Kris Marszalek, Monaco’s chief executive officer, said in an interview. “It probably would have been more prudent to just leave it out until everything is done.”
In an Aug. 31 press release, Monaco announced a new mobile application along with plans to debut five different payment cards. There was no mention of Visa. The value of Monaco’s currency dropped 29 percent that day. Accounting for all its ups and downs, Monaco’s money has tripled in value since May 17.
Monaco dropped 7.7 percent to $7.57 at 9:18 a.m. in New York. The five largest cryptocurrencies -- Bitcoin, Ethereum, Ripple, Bitcoin Cash and Litecoin -- all posted gains Monday.
Fledgling digital-money companies are clamoring for deals with Visa because it would mean their currencies would be accepted at the 44 million merchant locations in Visa’s network. But there are obstacles. While cryptocurrencies typically offer users anonymous transactions, payment networks and financial institutions are required to follow know-your-customer rules to prevent money laundering and funding for criminal activity.