The project, a collaboration between Visa research and product teams, has been in development since 2018 when the underlying concept first emerged
Visa announced on Thursday that it had developed a conceptual protocol for digital asset interoperability. Recent advances confirm that the company is on a path to creating an interoperable network of blockchain transactions. The Visa research team that examined the interoperability of blockchain consisted of engineers and scientists fixated on new technologies and has been in the works since 2018.
“Imagine sharing the check with your friends when everyone at the table is using a different type of money […] How about sending $ 500 in USDC to a friend in London and having those funds automatically converted to digital pounds sterling before they get into her CBDC wallet? Visa said, describing the interoperability users will see in the new facility called Universal Payment Channels (UPC).
Visa explained the need for interoperability in a blog post as most users are currently using conventional payment methods. The global payments giant noted that digital currencies would play a much more important financial role in the near future. Regarding CBDCs in particular, Visa felt that many central banks are likely to set up some sort of digital ledger as part of the integration of digital currencies.
The payment giant also stressed that for CBDCs to work, they need to provide a great customer experience and wide acceptance by merchants. In the published whitepaper, Visa stated that the UPC would securely connect different blockchain networks to enable real-time transactions across different digital wallets. The functionality would be such that dedicated payment channels would be set up between multiple blockchain networks.
Additionally, Visa announced that it had also deployed its first smart contract on Ethereum’s Ropsten testnet during the UPC’s development, with the channel accepting ETH and the USDC stablecoin. On the way to achieving interoperability, Visa therefore sees that transactions with the specialized payment channels would be faster.
“UPC’s specialized payment channels would be set up outside the blockchain and use smart contracts to communicate with the various blockchain networks, deliver high transaction throughput securely and reliably, and improve overall speed.”
Visa continues to grow in the blockchain and cryptocurrency space after announcing in July that it has partnered with more than 50 crypto platforms and exchanges to implement crypto-linked cards for customers. Earlier this year, the payment company worked with Circle to develop a corporate card that businesses can use to send and receive payments in USDC.