Visa Proposes Auto Payments for Ethereum Users

December 20, 2022

Visa, a credit giant, recently issued a proposal to enable Ether token owners to organize automatic payments straight from their self-custodial wallets. The respective proposal would require the banking institutions or the rest of the centralized companies to be a participant in the respective project. Formerly this year, Visa conducted a hackathon in which it aimed at increasing the span of the crypto world by making it accessible to a considerable number of customers.

Visa Issues a Proposal for Auto Payments Benefiting Ether Owners to Take Banking Decisions

This service would provide benefits to all the people who possess bank accounts. The move comes at a point when $2T amount has vanished from the market of cryptocurrency after the huge bankruptcies. As a result, centralized lenders and exchanges became defunct despite doing a lot of efforts to remain in the industry. Furthermore, several of these institutions attempted to make harmony between the banking system and digital assets.

Catherine Gu, the chief of CBDCs and protocols at Visa who is also the co-author of the current proposal, stated that if payments are considered a prominent utilization of blockchain technology then there is a fundamental requirement for the blockchain that it must operate finely as it is doing presently if not improved. In February 2022, a competition was organized between the employees of Visa to sort out the problem of how a person owning Ether could recompense the bills via crypto assets.

Banking Institutions to Eliminate the Need for Internet Service for Crypto Payments

The condition was the payment of bills without internet service through crypto. In such a situation, there was the requirement for a bank that would make the process convenient. The financial organization can note down the suitable rules for the account holders. However, it is complex in the public blockchain space where “blockchain primitives” (basic tools’ sole codebase) is accessible to anyone.

The Ethereum network now provides externally owned accounts (EOAs) or consumer accounts, as well as contract accounts. These account types automatically operate codes called smart contracts. The proposal by Visa would fundamentally merge the above-mentioned account types into one. With this, the smart contract would turn into a software wallet that would store crypto and execute commands. This process is known as account abstraction (AA). The respective concept was proposed by Vitalik Buterin (Ethereum co-founder) in 2015.