Blockchain
Visa, one of the world’s largest digital payment platforms, is digging deep into the cryptocurrency space.
In an interview with Blockworks, Visa’s head of CBDC and protocols, Catherine Gu discussed the company’s current exploration of blockchain protocols and consensus mechanisms. Highlighting Visa’s strong interest in the area, she said it aims to better understand the underlying fundamentals of blockchain and assess its potential role in shaping the future of payments.
The payments giant recently released a technical paper showing how to transform digital transactions using account abstraction (AA).
Ethereum mainnet is currently seeing about a million transactions per day. By comparison, Visa carries out an average of 707 million transactions per day, according to the paper notes.
The team is currently exploring ways to potentially abstract gas costs for users and allow users to pay transaction fees with ERC-20 tokens instead of the blockchain’s native cryptocurrency.
“The ultimate question is: what is the main pain point? What is the main use case for making blockchains really mainstream,” Gu told Blockworks.
Gu explained that the team had stumbled upon account abstraction through an internal hackathon. She then began going down a rabbit hole as they learned more in-depth details about space.
“There was a lot that we didn’t fully appreciate, like just understanding the basic distinction between a [Externally Owned Account] against one [Contract Account]what that implication means and how it feeds into the UI and UX,” Gu said.
Using ready-made open-source codes, the Visa team has been experimenting with the 4337 paymaster contract to see how users can use it to delegate payments to the paymaster. The group also began looking for ways to pay gas fees with a generic ERC-20 token.
Since crypto technology is still quite new to the Visa team, Gu and her team are figuring out the interactions between the various contracts and learning the roles of each network participant.
Most of what Visa is doing on the blockchain these days is considered an experiment, Gu noted.
“I would still consider what we’ve done purely as research because it’s a long way from how we think about what our final product roadmap should look like,” she said.
Become an SME and work with the larger crypto community
Since the Visa crypto team is still in its infancy, Gu explains that there is no clearly defined roadmap today.
Nevertheless, she noted that the shared goal for her and her team is to become subject matter experts and discover concrete developments from there.
“We really need to understand the technology thoroughly, that is the core goal of the product team…once we get to that stage we will look at ways to contribute…we want to share these ideas with the crypto community and encouraging other companies and developers to come and give us feedback,” Gu said.
Much of Visa’s research can be found on their crypto thought leadership website. In addition to looking at account abstraction, Gu and her team are also exploring themes of interoperability, scalability, and privacy.
“As blockchain technology matures, we’re really thinking about different use cases…whether that’s targeting consumers, institutions and even central banks exploring CBDCs…privacy is going to be a big area of focus,” she said. “So for us, I think it’s going to be important to understand both the implications and the design behind privacy going forward.”
