Visa, one of the largest lending companies in the world, is exploring the possibility of using smart contracts and programmable payments to give Ethereum holders the ability to make automatic payments from their own self-managed wallets. This means that the transferred funds are not controlled by a bank or other centralized third party, but by the Ethereum holders themselves.
To make this possible, Visa offers to use a concept called Account Abstraction (AA). Originally formalized by Vitalik Buterin in 2017 as EIP-86, AA unifies external accounts (user accounts) and smart contract accounts into a single Ethereum account type. This allows the integration of smart contract functionality into user accounts, as well as enabling multi-owner accounts through multi-signature verification and delegable accounts. AA also allows the creation of a public account through which anyone can make transactions.
Although AA has not yet been implemented on the Ethereum platform, the recent EIP-4337 proposal from 2021 offers a method of implementing AA that does not require changes to the Ethereum network protocol.
Visa is working with Ethereum developers outside of the company to increase capacity to process large transaction volumes and improve security and interoperability. In October 2021, Visa filed two trademark applications for its own crypto wallets and announced a partnership with JP Morgan to work together on private blockchains to simplify international payments.
This move into the standalone cryptocurrency space reflects Visa’s belief in the potential of blockchain technology to transform the way payments are made. By allowing Ethereum holders to set up automatic payments through their own self-managed wallets, Visa enables a more decentralized and secure payment system that does not rely on traditional banks or other centralized third parties.
Using smart contracts and programmable payments is a natural progression for Visa, as the company has a long history of innovation and strives to stay at the forefront of technological advancements in the financial industry. By exploring the potential of blockchain technology and cryptocurrency, Visa is positioning itself as a forerunner for the future of payments.
As more and more people turn to cryptocurrencies and decentralized finance (DeFi) as an alternative to traditional financial systems, the demand for secure and reliable payment solutions will only grow. By exploring the use of smart contracts and programmable payments, Visa demonstrates its commitment to meeting this demand and remaining relevant in an increasingly digital world.
Conclusion
Overall, Visa’s decision to explore and offer the use of smart contracts and programmable payments for Ethereum holders is a significant step forward in the adoption and proliferation of blockchain and crypto technology. -cash. By enabling a decentralized and secure payment system, Visa is paving the way for a future where blockchain and cryptocurrencies play a central role in how we exchange transactions and value.