Visa has said it is working on an interoperability system that would work across different blockchain networks and connect different Central Bank Digital Currency networks across the world.
According to Visa, this system would be called the Universal Payment Channel. The payment company said, “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.
“Over the past two years, central banks around the world have shown an increasing interest in exploring CBDC — a new, digital form of central bank money that can be used directly by consumers, merchants, and financial institutions.
“In the coming years, many central banks will likely implement some form of a digital ledger. Central banks will select the tech stacks and design protocols that make the most sense for their constituents, taking factors like governance, market requirements, technology providers, compliance standards, and nation-specific priorities into consideration.”
Visa further explained how they believe the Central Bank Digital Currency network will work smoothly as well as the role the Universal Payment Channel will play.
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“As the number of digital currency networks increases — each with unique design characteristics — the likelihood that consumers, businesses, and merchants are transacting on the same network and utilizing the same type of money decreases.
“We believe that for CBDCs to be successful, they must have two essential ingredients: a great consumer experience and widespread merchant acceptance. It means the ability to make and receive payments, regardless of currency, channel, or form factor. And that’s where Visa’s UPC concept comes in.”
According to VISA, its UPC hub would connect different blockchain networks by establishing dedicated payment channels between them, connecting CBDC networks between countries and connecting CBDC networks with vetted private stablecoin networks.
The payment company added that its UPC will increase digital currencies transaction speeds making CBDC useful and attractive for consumers and businesses globally.