Global payments giant Visa released a report on Monday explaining how the company can eventually interact with the Ethereum network on automated payments, signaling its increased, ongoing interest in cryptocurrencies.
The paper describes how Ethereum users might plan auto-payments made from self-custodial cryptocurrency wallets with support from Visa. The document was inspired by an internal corporate hackathon that was held earlier this year. This capacity is not yet feasible on the Ethereum mainnet, but it would be made possible by a well-liked Ethereum proposal dubbed “Account Abstraction,” which would let Ethereum user accounts perform pre-scheduled execution activities and operate like smart contracts.
Although the introduction of crypto auto-payments may not significantly influence the banking and payments environment, it is another indication that Visa intends to participate actively in the cryptocurrency market, which it views as potentially crucial to the long-term future of payments.
“We want to have an opportunity to actively contribute to technical developments happening in the crypto ecosystem. 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,” Catherine Gu said.
Gu’s group is currently researching what additional blockchain technologies are set to revolutionize the world of payments—and how fast their adoption may be implemented. The group was originally established to look into the possibility of digital currencies supported by global governments.
Gu thinks that day doesn’t seem to be coming up too soon.
“This technology is very nascent right now, but there could be something there down the road. A lot of research needs to be done around fundamental aspects important for payments, like security and scalability,” Gu said.
Scalability, or the capacity to maintain network security while allowing for inexpensive and quick transactions on a large scale, has long been a coveted but unattainable aim for blockchain networks like Ethereum. This issue will be addressed in many of the Ethereum network’s upcoming releases.
It’s doubtful that big companies like Visa will substantially integrate significant networks like Ethereum until they can widely grow. However, the payments business is certain that such technological possibilities are within reach since it has been in constant contact with Ethereum’s core developers.
That optimism is a sharp contrast to the pessimism of the current public attitude about cryptocurrencies, which has been driven in recent weeks by the ongoing collapse of the crypto exchange FTX and the disgraced founder Sam Bankman-Fried.
“It’s very important to figure out what’s the signal and what’s the noise. We’re taking a much longer-term perspective on this technology. It may have real utility, and that’s why we’re here: to invest more, to do research,” Gu said.
The company submitted trademark applications in October, indicating that it was considering developing a crypto wallet and a metaverse product. A month later, Visa ended its collaboration with FTX, which had given customers of the cryptocurrency exchange access to debit cards with the Visa logo.
That month, Paxos and Mastercard, a competing payments company, introduced cryptocurrency trading for banks.
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