Global payments giant Visa signaled its stronger and more sustained interest in crypto on Monday, publishing a document outlining how the company could one day partner with the Ethereum network for automated payments.
It paperDetails emerging from an internal company hackathon earlier this year detail how Ethereum users, with support from Visa, can schedule automatic payments sent from standalone crypto wallets. Such a feature is not yet possible on the Ethereum mainnet, but it will be enabled by a popular Ethereum offering called “Account Removal”, which will allow Ethereum user accounts to act like smart contracts and implement pre-scheduled execution functions.
While crypto auto payments won’t necessarily have a dramatic impact on the banking and payments landscape, it’s another sign that Visa plans to become an active player in crypto, a sector it sees as potentially important 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, Head of CBDC and Protocols at Visa. Decode. “The best way to do that is to learn to really dig deeper into Web3 infrastructure and blockchain protocols, areas that I think will be really important for payments.”
Gu’s group, which was first organized to explore the potential of digital currencies backed by global governments, is now actively investigating what other blockchain technologies are poised to transform the world of payments, and how soon their adoption can take place.
That day, according to Gu, does not seem particularly close.
“This technology is very nascent right now, but there could be something down the road,” Gu said. “A lot of research needs to be done on fundamental aspects of payments like security and scalability.”
An enduring, elusive goal of 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 upcoming updates to the Ethereum network are aimed at solving this problem. Proto-inflationAn example is an early version of a system that could one day radically reduce the amount of data needed for secure analytics to process huge chunks of Ethereum transactions. It is expected to launch sometime next year.
“From a payment perspective, most of it [blockchain networks] are not yet scalable enough to process transactions at truly high speeds in a secure and reliable manner,” Gu said.
Until networks like Ethereum can scale at scale, they are unlikely to be meaningfully integrated by large companies like Visa. 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 provides a significant departure from the gloom of current mainstream crypto sentiment, dominated over the past month by the steadily unfolding demise of crypto exchange FTX and its disgraced founder. Sam Bankman-Fried.
“It’s very important to figure out what is signal and what is noise,” Gu said. “We have a much longer-term perspective on this technology. It can have real utility, and that’s why we’re here to invest more, to do research.”
The company in October filed trademark applications indicating that it was discussing a crypto wallet and a metaverse product. A month later, Visa ended its partnership with FTX, which allowed users of the crypto exchange to receive Visa-branded debit cards.
In the same month, rival payments company Mastercard partnered with crypto-trading platform Paxos run a crypto trade for banks.
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