Visa has supported a partnership by Huobi and Solaris to allow European users to make payments from crypto accounts using Visa-supported debit cards.
Creating multiple payment options (with fiat and digital currencies) as Blockchain innovation evolves has become part of the mission of many financial institutions. Visa, a trusted leader in the digital payment industry, is also part of the vision.
More on Debit Cards
Crypto exchange Huobi recently announced a new partnership project with European Financial services provider Solaris. The partnership will issue a Visa-backed debit card to allow users to initiate crypto-to-fiat currency payments.
Users in the European Economic Area (EEA) will have access to debit cards in Q2 of 2023. The EEA includes all countries that make up the European Union.
Andrea Ramiono, head of strategy at Solaris, commented on the partnership. He said the development was the first step in Huobi’s Solaris partnership, indicating the possibility of more innovations from the collaboration. This development marks a milestone in Huobi’s efforts to make virtual assets accessible to everyone.
Huobi’s Visa card is not the first in the EU. In 2020, Binance launched a Visa-backed crypto-to-fiat card that allows European citizens to withdraw funds from the Binance wallet.
Visa has supported many crypto innovations and pioneered several gap-bridging crypto-fiat projects. For example, on October 22, Visa partner with Blockchian.com to offer crypto debit cards to US citizens.
Visa also partnered with ZELF, a fintech company, to launch an anonymous debit card with crypto top-up like Huobi. Debit cards allow users to open a USD-based checking account with just their name, email, and phone number.
Visa Proposes Custodial Wallet For Automated Crypto Payments
Through a blog post dated December 20, 2022, Visa proposed a new crypto solution. The project will allow service providers to withdraw funds from users’ Ethereum wallets without constant manual authorization on each transaction. It is synonymous with recurring subscription billing in the traditional banking industry, where users can authorize automatic monthly billing on some services like Netflix.
According to Visa, automatic recurring payments in crypto will be possible through a new independent custodian wallet called “delegable account.” The custodian wallet itself will be based on the concept of Account Abstraction (AA). Users can automatically transfer funds from their own custodian wallet account at recurring intervals by setting programmable payment instructions.
An AA-based custody wallet will allow user account functions like smart contracts. This implies that individuals can schedule transactions without requiring authorization each time.
In 2015, Vitalik Buterin, the founder of Ethereum, proposed this concept to allow ETH-based wallets and smart contracts to merge into one account. The post notes that “AA” was part of many Ethereum Improvement Proposals in previous years. But it failed due to implementation difficulties, such as the need to meet several protocol changes and security guarantees.
According to the Visa team, it is easier to integrate automatic payment systems through wallets hosted on third parties like crypto exchanges. However, the risk they run is that users will have to rely on their funds to take care of these third parties. Considering the experience with the bankrupt exchange FTX and others, trusting funds to a third party has proven to be risky.
At Visa team confirmed that the pilot of delegated accounts on the private chain of StarkNet, a layer-2 scale solution, was successful. With the success rate of previous Visa crypto payment projects, we can only expect more innovations in the future.