Visa is reportedly exploring plans to let customers convert crypto assets into fiat currencies.
Speaking at the StarkWare Sessions 2023 conference in Tel Aviv, Cuy Sheffield, head of Visa’s crypto operations, said the company has “been testing how to actually accept settlement payments from issuers in USDC starting on Ethereum and paying out in USDC on Ethereum,” per a report by Cointelegraph.
Sheffield said since 2021 Visa has been exploring how it can use USDC and public blockchains for settlement payments between Visa and its clients.
“That’s been one of the areas where we want to build muscle memory. The same way that we can convert between dollars in euros on a cross-border transaction, we should be able to convert between digital tokenized dollars and traditional dollars.
The Sunday (Feb. 5) Cointelegraph report notes that Visa has been looking for ways to incorporate blockchain technology into its network to move funds more quickly.
The company said as much last year in a technical paper published last year, as PYMNTS reported in December.
The paper argues that blockchain adoption is increasing, although setting up automatic recurring payments is difficult because some digital wallets require engineering work to permit pull payments.
That’s an obstacle that needs to be overcome, as consumers want the convenience of automatic recurring payments — to the extent that 30% of them have changed the way they pay bills within the last two years, citing convenience as the reason, Visa said.
While making that change is simple on a banking app, it’s more difficult on some digital wallets, the paper noted.
“Ethereum supports push payments but doesn’t natively support pull payments — auto payments are an example of pull payments,” the authors wrote in the technical paper.
The authors examined the use of smart contracts for self-custodial wallets to do away with the need for the user to actively participate and push payments each time, instead allowing the smart contract to pull funds automatically.
Account abstraction (AA) proposes that user accounts should function like smart contracts and that more flexibility can be permitted to validate blockchain transactions, the Visa paper argued.
Meanwhile, payment networks might not need blockchain to get faster, PYMNTS’ Karen Webster wrote in her list of predictions for 2023.
“In 2023, we will see payments and financial networks get smarter without crypto and blockchains, including private ones,” Webster wrote. “Traditional networks will get faster as innovators make it possible to embed instantaneously into any payments workflow at scale and businesses create new use cases for instant payouts.”