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Visa is teasing an Ethereum collaboration seeking to 'actively contribute' to the development of crypto. On Monday, the payment company released an article that explores the potential for automatic payments in cryptocurrencies.
On Monday, global payments giant Visa signaled its stronger and more enduring interest in cryptocurrencies by releasing a paper outlining how the firm could one day partner with the Ethereum network on automated payments, Decrypt reported.
The paper, sparked by an internal company hackathon held earlier this year, details how Ethereum users could—with support from Visa—schedule auto-payments sent from self-custodial crypto wallets. This feature is not yet available on the Ethereum mainnet, but will be implemented through a popular Ethereum proposal called “Account Abstraction,” which would allow Ethereum user accounts to function like smart contracts and feature pre-scheduled execution functions.
While automatic payments in crypto would not necessarily have a significant impact on the banking and payments environment, it is another sign that Visa plans to become an active player in crypto, a sector it sees as potentially critical for the long-term future of payments.
“We want to have an opportunity to actively contribute to technical developments happening in the crypto ecosystem,” Catherine Gu, Visa’s Head of CBDC and Protocols, told Decrypt. “The best way to do that is learning by doing—actually getting deeper into Web3 infrastructures and blockchain protocols, areas I think are going to be really important for payments.”
The Gu group, first formed to explore the potential of digital currencies backed by the world's governments, is now actively exploring what other blockchain technologies have the potential to change the world of payments and how soon their adoption can be realized.
“This technology is very nascent right now, but there could be something there down the road,” Gu said. “A lot of research needs to be done around fundamental aspects important for payments, like security and scalability.”
A constant, elusive goal for blockchain networks like Ethereum has long been scalability: the ability to maintain network security while enabling cheap and instant transactions on a massive scale. Many of the upcoming updates to the Ethereum network aim to address this issue.
“From a payments standpoint, most [blockchain networks] are not yet scalable enough to process transactions at a really high speed in a secure and trusted way,” Gu said.
Until networks like Ethereum can scale widely, it is unlikely they will be meaningfully integrated by large firms like Visa. But the payments company, which communicates regularly with Ethereum's core developers, is optimistic that such technological horizons are within reach.
© 2022, Eva Fox | Tesmanian. All rights reserved.
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About the Author
Eva Fox
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.
