Giant Watch: What is VISA's cryptocurrency team researching?

Catherine Gu, Head of CBDC and Protocols at Visa, discusses the company's current exploration of blockchain protocols and consensus mechanisms.

Original title: "An Inside Look at Visa's Crypto Team"

Written by: BESSIE LIU

Compilation: Deep Tide TechFlow

Visa, one of the world's largest digital payment platforms, is delving into the cryptocurrency space.

Catherine Gu, Head of CBDC and Protocols at Visa, discussed the company's current exploration of blockchain protocols and consensus mechanisms. She highlighted Visa's strong interest in the space, saying it aims to better understand the fundamentals of blockchain and assess its potential role in shaping the future of payments.

The payments giant recently released a technical paper showing how account abstraction (AA) can be used to transform digital transactions.

The Ethereum mainnet currently sees approximately 1 million transactions per day. By comparison, Visa averages 707 million transactions per day.

The team is currently working on how to abstract gas fees for users and enable users to pay transaction fees using ERC-20 tokens instead of the blockchain's native cryptocurrency.

In response to the question “What are the main pain points? What are the main use cases that will really bring blockchain to mainstream adoption?” Gu explained that the team stumbled upon account abstraction through an internal hackathon. Then, they began to delve into more details of the field.

“There are a lot of things we don’t fully understand, such as just understanding the basic difference between an ‘externally owned account’ and a ‘contract account’, what that means and how it affects UI and UX,” Gu said.

Using readily available open source code, the Visa team experimented with the 4337 payment contract to see how it could be used by users to delegate payments to payers. The team is also starting to look into how any generic ERC-20 token can be used to pay for gas.

Since cryptography is relatively new to the Visa team, Gu and his team are working to figure out how the different contracts interact and understand the role of each network participant.

Much of what Visa is currently doing on the blockchain is considered experimentation. "I still think what we're doing is purely research because it's so far removed from our thinking about the final product roadmap," she said.

Since Visa's encryption team is still in its infancy, Gu explained that there is no clear roadmap yet.

Still, she says she and her team share a goal of becoming experts and spotting specific developments from them. Gu said: "We really have to get to the bottom of the technology, which is a core goal of the product team...Once we get to that stage, we'll look at ways to give back...We want to share these ideas with the crypto community and encourage other companies to and developers to give us feedback."

Much of Visa's research can be found on their Crypto Thought Leadership website. In addition to working on account abstractions, Gu and his team are exploring topics such as interoperability, scalability, and privacy.

"As blockchain technology matures, we're really looking at different use cases...whether it's at the consumer level, institutions, or central banks exploring CBDCs...privacy is going to be a big area of focus," she said. "So it will be important for us to understand the impact and design of privacy in the future."