HomeCryptoVisa Teases Ethereum Collab, Aims to “Actively Contribute” to Crypto Development
Visa Teases Ethereum Collab, Aims to “Actively Contribute” to Crypto Development
December 20, 2022
Global payments giant Visa signaled its stronger and more sustained interest in cryptocurrencies on Monday, publishing a document outlining how the company could one day partner with the Ethereum network on automatic payments.
The paper, triggered by an internal company hackathon held earlier this year, details how Ethereum users could, with support from Visa, schedule automatic payments sent from self-guarded crypto wallets. Such functionality is not yet possible on the Ethereum mainnet, but would be enabled by a popular Ethereum proposal called “Account Abstraction,” which would allow Ethereum user accounts to function like smart contracts and feature pre-programmed execution functions.
While cryptocurrency auto payments don’t necessarily have a dramatic impact on the banking and payments landscape, it is yet another sign that Visa is planning to become an active player in cryptocurrencies, an industry it sees as potentially critical to the long-term future of payments.
“We want the opportunity to actively contribute to the technical developments taking place in the cryptocurrency ecosystem,” said Catherine Gu, Head of CBDC and Protocols at Visa Decrypt. “The best way to do that is to learn by doing, actually delving into Web3 infrastructure and blockchain protocols, areas that I think are going to be really important for payments.”
Gu’s group, initially organized to examine the potential of digital currencies backed by world governments, is now actively investigating what other blockchain technologies are poised to reshape the world of payments and how soon their adoption could be implemented.
That day doesn’t seem, according to Gu, to be particularly close.
“This technology is very nascent right now, but there may be something on the way,” Gu said. “A lot of research needs to be done on fundamental aspects that are important to payments, such as security and scalability.”
An enduring and elusive goal for blockchain networks like Ethereum has long been scalability: the ability to maintain network security by allowing for cheap, instantaneous transactions at scale. Many planned updates to the Ethereum network focus on addressing this issue. Proto-dankharding, for example, is an early version of a system that could one day radically reduce the amount of data needed to be securely analyzed to process massive amounts of Ethereum transactions. The launch is expected by the end of next year.
“From a payment standpoint, most [blockchain networks] they are not yet scalable enough to process transactions at a really high speed securely and reliably,” Gu said.
Until networks like Ethereum can scale extensively, they are unlikely to be significantly complemented by large companies like Visa. But the payments company, which has been in regular communication with leading Ethereum developers, is optimistic that such technological horizons are within reach.
This optimism offers a stark departure from the gloom of current mainstream sentiment around cryptocurrencies, dominated over the past month by the ever-evolving demise of cryptocurrency exchange FTX and its disgraced founder. Sam Bankman-Fried.
“It is very important to understand what is signal and what is noise,” Gu said. “We are taking a long-term perspective on this technology. It can have real utility, and that’s why we’re here: to invest more, to do research».
In October, the company trademark applications filed indicating that he was mulling over a cryptocurrency wallet and a metaverse product. A month later, Visa terminated a partnership with FTX that allowed users of the cryptocurrency exchange to obtain Visa-branded debit cards.
In the same month, rival payments firm Mastercard partnered with cryptocurrency trading platform Paxos start trading cryptocurrencies for banks.
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