Research Report] Analysis of the inevitability of structural combination of the on-chain transition of global payment infrastructure (Visa) and Web3 native KYC infrastructure
1.On-chain paradigm shift in global payment networks
Recently, the convergence of traditional finance (Web2) and blockchain (Web3) is accelerating as Visa, the No. 1 global payment network company, unveiled the ‘Visa Stablecoin Platform (VSP)’ and adopted ‘Open USD’ as the first supported asset.
Visa's ultimate goal is to replace existing closed and expensive traditional interbank payment networks (such as SWIFT) with a blockchain highway that operates 24 hours a day and enables instant settlement.
However, the biggest obstacle to this great transformation is the resolution of legal and regulatory hurdles such as Know Your Customer (KYC) and Anti-Money Laundering (AML).
This report analyzes the inevitability that the on-chain payment system promoted by Visa will overcome the limitations of the existing Web2 method of identity authentication and ultimately be structurally combined with the large-scale Web3 native KYC infrastructure built by Pi Network.
- Conflict between limitations of existing Web2 KYC and Web3 on-chain payment
The identity authentication that Visa has previously linked is nothing more than a 'Web2-based identity authentication' controlled by each commercial bank and a centralized security company. This has the following critical limitations:
• Disruption of user experience: Users must photograph their ID and wait for approval every time they use various dApps or wallets on the blockchain, completely hindering the speed and efficiency of real-time payments.
• Centralized data leakage risk: Since personal information is stored centrally on a specific organization's internal server, it conflicts with strong personal information protection laws around the world, such as Europe's GDPR, and can lead to a large-scale security incident in the event of hacking.
• Dissonance with anonymity-oriented on-chain ecosystem: The blockchain ecosystem is driven by wallet addresses (public addresses), but traditional Web2 KYC does not provide an organic on-chain connection mechanism between wallet addresses and real identities.
- Technical requirements for Web3 native KYC (DID/zk-KYC)
In order for Visa to attract hundreds of millions of general users to payment networks based on public blockchains such as Ethereum and Solana, a completely different 'Web3 native identity authentication' system is essential.
• Self-Sovereign Identity (SSI) and Wallet-Based Credentials: Users are in direct control of their identity data, and the moment they connect a wallet, their wallet must be immediately verified on-chain (Verifiable Credentials) to ensure that it is a compliant whitelist wallet.• Privacy protection through zero-knowledge proof (ZKP): Visa does not store sensitive information such as the user's name or resident registration number directly on the server, and must adopt a structure that approves payments by only checking on-chain mathematical proof (SBT or zk-KYC token) in response to the question, "Is this user an authenticated person not involved in illegal money laundering?"
- Structural strength and inevitability of combination of Pi Network KYC infrastructure
Considering these Web3 native KYC requirements, the large-scale identity authentication infrastructure built by Pi Network has a clear structural interface that cannot help but be combined with Visa's VSP ecosystem.
• Large global-scale authenticated user pool: Pi Network has more than 60 million users around the world and has already completed the authentication of tens of millions of authenticated users through its own ‘AI + distributed human verification’ system. From Visa's perspective, it is an unrivaled infrastructure that can reduce initial user acquisition and authentication costs to close to zero.
• On-chainization of Web3 Credentials (VC): Pi Network has succeeded in the world's largest DID (Decentralized Identity Authentication) experiment, which allows ordinary individuals to cross-verify the identities of others and grant tamper-proof identity credentials on the blockchain. Once this information is on-chain in the form of ‘verifiable credentials’ through the mainnet, it can be immediately interoperable with Visa’s systems.
• Inclusion of the underprivileged in traditional finance: Pi's decentralized KYC system can cover even global users who have insufficient ID systems or do not benefit from traditional banking infrastructure. This is perfectly in line with the scalability of the ‘global ubiquitous payment network’ pursued by Visa.
- Conclusion and combined scenario outlook
Visa's big picture of on-chain stablecoin payments will only be realized when the triangular axis of "Web2 financial capital (Visa) + blockchain rail (OUSD) + Web3 native identity authentication (DID)" is completed. If Visa only relies on Web2-type authentication from existing commercial banks, it cannot absorb the liquidity of the Web3 ecosystem, and conversely, excluding Pi Network's infrastructure is the same as giving up the world's largest on-chain whitelist user group that has already been established.
Therefore, the realistic future form of combination will not be one in which Visa directly purchases Pi Network's KYC infrastructure, but one in which the Pi Network ecosystem (wallet and mainnet) is linked to Visa's settlement network (VSP) and payment card infrastructure in the form of an API, and Pi's Web3 DID data is mapped as a whitelist to Visa's on-chain payment approval rail. This is the most ideal and structurally inevitable direction of evolution that combines the reliability of traditional finance and the innovation of Web3.
Ultimately, all the systems that Visa is currently preparing are aimed precisely at the Pi Network.Research report: Analysis of the structural inevitability of the on-chain transition of global payment infrastructure (Visa) and Web3 native KYC infrastructure
1.On-chain paradigm shift in global payment networks
Recently, Visa, the leading global payment network company, has unveiled its 'Visa Stablecoin Platform (VSP)' and adopted 'Open USD' as its first supported asset, accelerating the convergence of traditional finance (Web2) and blockchain (Web3).
Visa's ultimate goal is to replace traditional, closed, and costly interbank payment networks (such as SWIFT) with blockchain highways that operate 24 hours a day and allow for immediate settlement.
However, the biggest obstacle to this major transformation is the resolution of the legal and regulatory hurdles of Know Your Customer (KYC) and Anti-Money Laundering (AML).
This report analyzes the necessity of Visa's on-chain payment system overcoming the limitations of the existing Web2 identity verification method and ultimately being structurally integrated with the large-scale Web3 native KYC infrastructure built by Pi Network.
- The Conflict between the Limitations of Existing Web2 KYC and Web3 On-chain PaymentsThe identity verification that Visa has previously linked is merely a 'Web2-based identity verification' controlled by each commercial bank and a centralized security company. This has the following fatal limitations.
Disconnection of user experience: Every time a user uses various dApps or wallets on the blockchain, they have to take a photo of their ID and wait for approval, which completely hinders the speed and efficiency of real-time payments.
Centralized data leakage risk: Because personal information is concentrated on the internal servers of specific institutions, it conflicts with strong global privacy laws such as Europe's GDPR, and hacking can lead to massive security incidents.
Dissonance with an anonymity-oriented on-chain ecosystem: While blockchain ecosystems operate on a public address, traditional Web2 KYCs fail to provide an organic on-chain connection mechanism between the wallet address and the actual identity.
- Web3 Technical Requirements of Native KYC (DID/zk-KYC)
To attract hundreds of millions of general users to payment networks based on public blockchains such as Ethereum and Solana, a 'Web3 Native Identity Verification' system of a different dimension is essential for Visa.Self-Sovereign Identity (SSI) and Wallet-based credentials: Users directly control their identity data, and upon connecting a wallet, it must be immediately verified on-chain whether the wallet is a regulated whitelist wallet.
Privacy protection through zero-knowledge proof (ZKP): Visa does not directly store sensitive information such as the user's name or resident registration number on the server, but must only verify on-chain mathematical proof (SBT or zk-KYC token) for the question, "Is this user an authenticated individual unrelated to illegal money laundering?" and approves the payment accordingly.
- The structural strengths and inevitable integration of Pi Network KYC infrastructure
Considering these Web3 native KYC requirements, the large-scale identity verification infrastructure built by Pi Network has a clear structural connection that inevitably integrates with Visa's VSP ecosystem.
A large-scale real-world user pool: Pi Network has over 60 million users worldwide and has already completed the real-world authentication of tens of millions through its proprietary 'AI + distributed human verification' system. From Visa's perspective, it is a unique infrastructure that can reduce initial user acquisition and authentication costs to near zero.Web3 on-chain authentication (VC): Pi Network has successfully conducted the world's largest DID (Decentralized Identity) experiment, where ordinary individuals cross-verify the identities of others and grant them identity qualifications that cannot be forged or altered on the blockchain. If this information is on-chained in the form of 'verifiable credentials' through the mainnet, it can be immediately interoperated with Visa's system.
Inclusion of traditional financial underserved groups: Pi's decentralized KYC system can cover global users who lack an ID system or do not benefit from traditional banking infrastructure. This perfectly aligns with the scalability of Visa's pursuit of a 'global ubiquitous payment network.'
- Conclusions and Combination Scenario Forecasts
The grand vision of on-chain stablecoin payments envisioned by Visa will only be realized when the triangular axis of "Web2's financial capital (Visa) + Blockchain Rail (OUSD) + Web3 Native Identity (DID)" is completed. If Visa relies solely on Web2 authentication from existing commercial banks, it cannot absorb the liquidity of the Web3 ecosystem. Conversely, excluding the infrastructure of the Pi Network is equivalent to abandoning the world's largest on-chain whitelist user group already established.Therefore, the realistic form of integration in the future will not be for Visa to directly purchase the KYC infrastructure of the Pi Network, but rather for the Pi Network ecosystem (wallet and mainnet) to be linked to Visa's settlement network (VSP) and payment card infrastructure in an API format, with Pi's Web3 DID data being whitelisted on Visa's on-chain payment approval rail. This is the most ideal and structurally inevitable direction of evolution, where the reliability of traditional finance and the innovation of Web3 are combined.
Ultimately, all the systems Visa is preparing now are precisely targeting the Pi Network.