On September 30, Catherine Jo, Visa’s Global Head of CBDC Product, wrote that the company’s research and product teams are working on a new blockchain initiative called the Universal Payment Channel (UPC).
The cross-chain interoperability hub will connect various DLT networks to facilitate digital asset transfers.
Gu used the example of splitting the bill between friends using different types of money, such as a central bank digital currency (CBDC) and a stablecoin such as Tether. She described it as a kind of universal converter of money:
“Think of it as a ‘global adapter’ between blockchains, allowing central banks, businesses, and consumers to seamlessly exchange value, regardless of the shape of the currency.”
Cryptocurrency settlement visa?
Visa is confident that digital currencies will be a part of everyday financial life in the future. The payments giant is also confident that there will be more central bank digital currencies to be launched, even if the US is still slowing on this front.
Visa’s UPC aims to connect all newly issued CBDCs and stablecoins on a single platform across a chain to enable seamless transfers. The UPC will connect dedicated payment channels between blockchains such as CBDC networks of different countries or private vetted stablecoin networks.
Gu also pointed out that there are certain advantages to the speed of transactions that Visa can offer over existing public blockchains that are much slower, although she did not name them. The new platform will operate as Layer 2, and handle transactions outside the main threads.
“UPC’s specialized payment channels will be built from the blockchain and take advantage of smart contracts to communicate back to various blockchain networks, providing a high throughput of transactions securely and reliably and improving overall speeds.”
She added that the UPC solution aims to function as a network of blockchain networks, “adding value to multiple forms of money movement, whether originating on or off the Visa network.”
There was no mention of the ability to transfer cryptocurrencies such as Bitcoin or Ethereum, but the infrastructure put in place will likely allow this. Visa referred to BTC as digital gold earlier this year and is clearly keen to be a part of the space.
COTI Cardano Partner launches Visa Debit Cards
In a related development on September 30, digital financial technology platform COTI announced new products that will provide Visa debit cards and bank accounts to users.
In July, Visa approved the first debit card to allow Bitcoin payments for the Australian market.
Featured image courtesy of CBerry
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