Global payments giant Visa showed strong and sustained interest in cryptocurrencies on Monday, releasing a paper outlining how the company could work with the Ethereum network on automated payments.
of paper, which stems from an internal hackathon held earlier this year, details how Ethereum users can schedule automated payments sent from a self-managed crypto wallet, with the support of Visa. Such a feature is not yet possible on the Ethereum mainnet, but it is called an “account abstraction” where Ethereum user accounts act like smart contracts, with pre-scheduled execution capabilities. Made possible by the popular Ethereum proposal.
While automatic payments for cryptocurrencies won’t necessarily have a dramatic impact on the banking and payments landscape, they are a further indication that Visa plans to become an active player in cryptocurrencies. .
Catherine Gu, Head of CBDC and Protocols at Visa, said: Decryption“The best way to do that is to learn by doing. It’s actually a deep dive into Web3 infrastructure and blockchain protocols. increase.”
Gu’s group, which was originally organized to explore the potential of a world government-backed digital currency, now has other blockchain technologies poised to reshape the world of payments, as well as their adoption. We are actively investigating how soon it will be implemented.
In Gu’s opinion, that day doesn’t seem particularly near.
“The technology is in its very early stages right now, but something could happen in the future,” Gu said. “A lot of research needs to be done on fundamental aspects that are important to payments, such as security and scalability.”
A persistent and elusive goal of blockchain networks like Ethereum has long been scalability. It’s the ability to maintain network security while enabling large-scale, cheap, and instant transactions. Many updates to the expected Ethereum network will focus on tackling this issue. protodunk shardingFor example, this is an early version of the system that could one day radically reduce the amount of data that needs to be safely analyzed to process high volumes of Ethereum transactions. It will be released in the second half of next year.
“From a payment perspective, most of the time, [blockchain networks] It’s not scalable enough to process transactions very fast in a secure and reliable manner,” said Gu.
Until a network like Ethereum can scale widely, it is unlikely that there will be any meaningful consolidation by a big player like Visa. But a payments company that is in regular contact with Ethereum’s core developers is optimistic that such technical horizons are within reach.
That optimism offers a notable departure from the current grim sentiment on mainstream crypto, which was dominated last month by the constant demise of cryptocurrency exchange FTX and its ignominious founder. Sam Bankman-Fried.
“It’s very important to understand what is signal and what is noise,” says Gu. “We have a longer-term view of this technology. It could have real utility, and that’s why we’re here: invest more , to conduct research.”
In October, the company trademark application It shows that we were considering crypto wallets and metaverse products. After a month, Visa Partnering with FTX With this, users of cryptocurrency exchanges can now acquire Visa-branded debit cards.
In the same month, rival payments firm Mastercard partnered with cryptocurrency trading platform Paxos, start crypto trading for banks.
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