Dec 19, 2022,03:06pm EST V +0.7% today released a proposal that would let owners of the ether cryptocurrency set up automatic payments directly from their own, self-custodial wallets, a proposal that would not require banks or other centralized entities to be part of the picture. While the service is far from groundbreaking to pretty much anyone who has a bank account, the proposal, resulting from an internal hackathon hosted by Visa earlier this year, would go a long way to making the often obtuse world of crypto more approachable for consumers Coming at a time when more than $2 trillion has been wiped off the cryptocurrency market value and following numerous high-profile bankruptcies of centralized exchanges and lenders, the proposal is the latest of a number of promising efforts to align digital assets with early proponents’ vision of a banking system shorn of layers of fee-grabbing intermediaries. Visa’s head of central bank digital currencies and protocols, Catherine Gu, who co-wrote the proposal says that, “If one of the major use cases of blockchain is for payments, then the basic requirement is that the blockchain has to function just as good as today, if not better.” Click here to subscribe to the Forbes CryptoAsset & Blockchain Advisor. The proposal, published on Visa’s website today, emerged from a competition among the company’s employees in February to solve the problem of how an ether owner could pay a bill with crypto at a future date while temporarily away from internet service. With a bank the process of pre-authorized payments is easy because the financial institution can write whatever rules it wants for its account holders. But it is much more complicated in the world of public blockchains, where a single codebase of basic tools, called blockchain primitives, is available to anyone. The EthereumETH +4% network today offers externally owned accounts (EOA), or user accounts, and contract accounts, which automatically run code known as smart contracts. The Visa proposal would essentially merge the two into a single account, turning the smart contract for executing commands into a software wallet for storing cryptocurrency. A process called account abstraction (AA). The idea of turning the smart contract itself into a wallet was proposed in 2015 by Ethereum creator Vitalik Buterin and formalized in 2017 as ethereum improvement proposal (EIP) 86. Currently marked as “stagnant” resulting from more than six months of inactivity, the Visa proposal could rejuvenate interest, if Buterin marked it as Draft, or if one of several newer proposals sees traction. “The truth is there is still debate on how AA should be implemented on Ethereum,” the paper authors wrote. In addition to the research on automating payments, the Visa team is working with Ethereum developers outside the company to increase the capacity to handle large volumes of transactions, provide increased security, interoperate with other blockchains, and do it all while ensuring users’ privacy is protected, according to Gu. “We are committed to continuing to do research and do more education, into blockchain primitives and protocols surrounding things that will be potentially important for payments,” she says. “So I think this is an ongoing effort.” Though Visa was among the first traditional payment giants to take digital assets seriously, with the 2015 launch of its first crypto-linked card, it is now competing against the likes of MastercardMA +0.8%, PayPalPYPL +0.1%, and Block (formerly known as Square), in bringing such payments to mainstream users. The account abstraction hackathon predates the crypto market collapse by several months, but the timing of this announcement happens to coincide with a larger push by crypto developers to emphasize the early “not your keys, not your crypto” mantra, that opposes centralized exchanges and other entities maintaining custody of digital assets owned by their customers. Since FTX filed for bankruptcy in November, centralized exchange volume has diminished to $14 billion from $34 billion, according to Forbes analyst and co-founder and CEO of investment manager NovaBlock, Leeor Shimron, though after an initial bump in decentralized exchange volume, transacted on codebases that connect traders directly, the numbers have reduced due to “lower asset prices and thus less interest heading into the holidays,” he says. Similarly, hardware wallets, visually similar to USB sticks, which give users extra layers of protection while still holding their own private access keys have also increased, though not without controversy. In November, Czech Republic-based Trezor reported that its device sales increased 300% from the monthly average in the preceding quarter, though there are possible vulnerabilities resulting from the role hardware developers play in providing the security of customers’ assets. Follow me on Twitter or LinkedIn. Check out my website. Send me a secure tip. Michael del Castillo
Are you fucking kidding me? The title of this thread is total bullshit click-bait. Nothing in the content you posted even remotely implies that "VISA will soon allow customers to pay with Ethereum". Get your head out of your ass and read the very first words... "a proposal that would ... set up automatic payments". FFS... VISA is, after all, a payment processor. They're happy to set-up automatic payments to and from anyone you want. But, I guarantee the underlying will be a sovereign currency. Hell, if you want to automatically convert your sovereign into sea shells and drop those into the Mariana trench, they'll be more than happy to do that (for a small fee). C'mon @Tokenz... did you even bother to read the article at all?
Because a few internal hackers in an internal hackatron gave the green light? You must be kidding me. The next attack and ensuing disaster is just waiting to happen around the corner. Stupid does not learn.
Oh man, I guess the writer of the article is wrong. He will need to change it soon since it will eventually happen anyway
This is the actual proposal, without the creepy face in the picture, with an actual explanation of what is really going on. https://usa.visa.com/solutions/crypto/auto-payments-for-self-custodial-wallets.html After reading it... how about direct debits? That thing that we have been using for decades? So they want to setup direct debits from an e-wallet. Banks will not like it
If it ever gets implemented, it will be tough for the masses to transact in crypto (at least in the US) as the govt is likely to treat crypto as securities and apply wash sale rules.
The US still treats crypto as 'property', which does in fact make things very complicated in using Bitcoin as a 'currency'. If you're in a country like Germany, and hold onto crypto until long-term tax-rules click in, then there is no tax at all on the asset. If you have a lot of crypto, one solution is to just borrow against it.