- Visa’s research team is looking at creating a universal payment channel to support global transfers of digital currencies.
- The payment channel would connect various blockchains, the company said in a blog post Thursday.
- Central banks around the world are stepping 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 investigating 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 the United Kingdom, the United States and the eurozone, have considered launching their own digital currencies, known as CBDCs, and have questioned whether these could be used for cross-border transfers.
“While digital currencies may not be a part of your daily financial life today, it is 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) – add value to multiple types of money movements, whether they originate from the Visa network or beyond,” the company said.
Visa said it had considered using the channel for transfers of stablecoins, such as the USDC, because their value is pegged to an existing currency such as the dollar, and as such can be linked to CBDCs.
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 controlled private stablecoin networks, Visa says.
How about sending $ 500 in USDC to a friend in London, and get 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 network and compatible with multiple digital wallets, “reads the report from Visa’s research team.
Visa has not wasted time engaging in the growing crypto landscape. In July, it partnered with 50 crypto companies to enable customers to use their digital currencies. The company even purchased a $ 150,000 non-fungal token, which is unique, digital and linked to art in August.