Visa Teases Ethereum Collab, Aims to ‘Actively Contribute’ to Crypto Development

Global payments giant Visa signaled its stronger, sustained interest in cryptocurrencies on Monday, publishing a document outlining how the company could one day work with the Ethereum network to make automatic payments.

The paper, prompted by an internal company hackathon held earlier this year, details how Ethereum users would be able—with Visa support—to schedule automatic payments sent from self-monitored crypto wallets. Such a possibility 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 have pre-scheduled execution functions.

While automated crypto payments wouldn’t necessarily have a dramatic impact on the banking and payments landscape, it’s a further sign that Visa plans to become an active player in crypto, a sector it sees as potentially critical to the long-term future of payments.

“We want to have the opportunity to actively contribute to the technical developments happening in the crypto ecosystem,” said Catherine Gu, Visa’s Head of CBDC and Protocol. Decipher. “The best way to do that is to learn by doing—actually going deeper into Web3 infrastructures and blockchain protocols, areas that I think will be very important for payments.”

Gu’s group, first organized to examine the potential of digital currencies backed by world governments, is now actively exploring what other blockchain technologies are poised to reshape the world of payments—and how quickly their adoption could be implemented.

It seems that day is not particularly close in Guo’s opinion.

“This technology is in its infancy right now, but there could be something down there,” Gu said. “A lot of research needs to be done around fundamental aspects important to payments, such as security and scalability.”

A persistent, elusive goal for blockchain networks like Ethereum has long been scalability: the ability to maintain network security while allowing for cheap and instant transactions on a massive scale. Many of the expected updates to the Ethereum network are aimed at solving this problem. Proto-danksharding, for example, is an early version of a system that could one day radically reduce the amount of data needed for secure analysis to process huge chunks of Ethereum transactions. It is expected to be launched sometime later next year.

“From a payment standpoint, most [blockchain networks] they are not yet scalable enough to process transactions at really high speed in a secure and reliable way,” Gu said.

Until networks like Ethereum can scale significantly, it is unlikely that large companies like Visa will significantly integrate them. But the payments company, which has been in regular communication with Ethereum’s core developers, is optimistic that such technological horizons are within reach.

That optimism offers a stark departure from the gloom of the current mainstream crypto mood, which has been dominated for the past month by the ongoing demise of crypto exchange FTX and its disgraced founder, Sam Bankman-Fried.

“It’s very important to understand what is signal and what is noise,” Gu said. “We are looking at this technology much longer term. It might have a real benefit and that’s why we’re here: to invest more, to explore.”

The company is in October filed applications for trademarks indicating that he was thinking about a metaverse crypto wallet and product. A month later, Visa ended its partnership with FTX that allowed users of the crypto exchange to get Visa-branded debit cards.

In the same month, rival payment company Mastercard partnered with crypto trading platform Paxos start crypto trading for banks.

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