- Visa’s research team is looking into creating a universal payment channel to support global transfers of digital currencies.
- The payment channel would connect different blockchains, the company said in a blog post on Thursday.
- Central banks around the world are picking up their efforts to develop their own digital currencies.
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Visa, the world’s largest payment processing company, said on Thursday it was looking into creating what it called a universal payment channel (UPC) to support central bank digital currency and stablecoin transfers across the globe.
The channel would act as a hub to connect multiple blockchains to enable secure transfers of digital currencies, the report said.
Many central banks including those of the UK, US and the eurozone have been looking into launching their own digital currencies, known as CBDCs, and have questioned whether these could be used in cross-border transfers.
“While digital currencies may not be a part of your daily financial life today, it’s likely that they will play an important role in the future,” Visa said.
“The UPC solution aims to serve as a network of blockchain(s)- adding value to multiple forms of money movement, whether they originate on the Visa network, or beyond,” the company said.
Visa said it had considered using the channel for transfers of stablecoins, such as USDC, because their value is tied to an existing currency like the dollar and, as such, they can be linked to CBDCs.
The UPC will be able to process billions of transactions with reduced fees, Visa said.
It would connect different blockchain networks by creating dedicated payment channels between them. This could mean connecting CBDC networks between countries, or connecting CBDC networks with vetted private stablecoin networks Visa said.
“How about sending $US500 ($AU692) in USDC to a friend in London, and having those funds automatically converted to digital British pounds before they arrive in her CBDC wallet. Now imagine all this happening in real-time, across multiple networks, and compatible with multiple digital wallets,” the report by Visa’s research team said.
Visa has not wasted any time engaging with the growing crypto landscape. In July it partnered with 50 crypto companies to allow clients to spend their digital currencies. The company even bought a $US150,000 ($AU207,525) CryptoPunk non-fungible token which is unique, digital and tied to art in August.