Big Tech Watch: What Is Visa's Cryptocurrency Team Researching?

Written by: BESSIE LIU

Compiled by: TechFlow

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

Catherine Gu, Visa’s head of CBDC and protocols, discussed the company's current exploration of blockchain protocols and consensus mechanisms. She emphasized Visa’s strong interest in this field, aiming to better understand the fundamentals of blockchain technology and assess its potential role in shaping the future of payments.

The payment giant recently released a technical paper demonstrating how account abstraction (AA) could transform digital transactions.

Ethereum currently processes around 1 million transactions per day. In contrast, Visa averages 707 million transactions daily.

The team is currently researching ways to abstract gas fees from users and enable them to pay transaction fees using ERC-20 tokens instead of the native cryptocurrency of a blockchain.

When asked about "the main pain points—what are the real use cases that will drive mainstream blockchain adoption?", Gu explained that the team stumbled upon account abstraction during an internal hackathon, after which they began digging deeper into the topic.

"There’s a lot we don’t fully understand yet," said Gu, "such as simply grasping the fundamental difference between externally owned accounts and contract accounts—what that means and how it impacts UI and UX."

The Visa team experimented with the 4337 paymaster contract using readily available open-source code to explore how users could delegate payment responsibilities. They also began investigating how any generic ERC-20 token could be used to pay gas fees.

Since crypto technology is still relatively new to Visa’s team, Gu and her colleagues are working hard to understand interactions between different contracts and clarify the roles of each network participant.

Most of Visa’s current work on blockchain is considered experimental. "I still view what we’re doing as pure research, as it’s far removed from our thinking about an eventual product roadmap," she said.

As Visa’s crypto team is still in its early stages, Gu explained there is currently no clear roadmap.

Nevertheless, she stated that her team shares a common goal: to become experts and uncover concrete opportunities along the way. "We really need to dive deep into this technology—that’s the core objective for our product team... Once we reach that stage, we’ll look into ways to give back... We want to share these ideas with the crypto community and encourage other companies and developers to provide us feedback," said Gu.

Much of Visa’s research can be found on their crypto thought leadership website. In addition to studying account abstraction, Gu and her team are exploring topics such as interoperability, scalability, and privacy.

"As blockchain technology matures, we’re really thinking through different use cases... whether for consumers, institutions, or central banks exploring CBDCs... privacy will become a key focus area," she said. "So for us, understanding the implications and design of privacy in the future will be very important."