Visa is working with Consensys to build a payments infrastructure for CBDCs


Visa and ConsenSys, a blockchain software startup, are working to develop a central bank digital currency (CBDC) pilot program to explore retail applications like cards and wallets.

Both companies will initially meet with an estimated 30 central banks to discuss the goals governments hope to achieve with state-backed digital currency. The pilot program is scheduled to start in the spring of this year.

Visa to pilot CBDC in selected countries

Visa (V) announced on Thursday that it will take its crypto services to the next level by teaming up with blockchain software company Consensys to create a central bank for digital currency (CBDC).

The payments giant plans to launch a “CBDC sandbox” in the spring, where central banks can try out the technology after developing it on Consensys’ quorum network.

Visa is working with Consensys to build a payments infrastructure for CBDCs

Visa Trades At $214. Source: TradingView

Customers can use their CBDC-connected Visa card or digital wallet anywhere Visa is accepted around the world, according to Catherine Gu, Head of CBDC at Visa, who spoke to ConsenSys in a blog post Q&A.

Said:

“If successful, CBDC could expand access to financial services and make government disbursements more efficient, targeted and secure – an attractive proposition for policymakers.”

A CBDC is a type of central bank obligation issued in digital form for use by the general public, comparable to the US dollar.

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Countries launch CBDCs

The decision comes as regulators around the world scramble to figure out how CBDCs should be treated in a changing financial landscape dominated by cryptocurrencies. The idea that crypto and digital money will turn the financial markets upside down or replace fiat currency is a big problem.

Mastercard also announced the launch of a CBDC testing platform in 2020, allowing banks to simulate the issuance, distribution and exchange of CBDCs between banks, financial service providers and consumers.

“Central banks are moving from research to wanting to have a tangible product to experiment with,” Chuy Sheffield, Head of Crypto at Visa.

If Visa is successful, it could help bridge the gap between central banks and financial institutions. Visa is accepted by over 80 million merchants worldwide.

In the last year and a half, the number of countries investigating CBDCs has more than doubled. According to the Atlantic Council’s CBDC tracker, at least 87 different countries — accounting for 90% of global GDP — are considering financial technology in some way.

China has already launched a number of digital yuan pilot initiatives and plans to accept the currency for the Beijing Winter Olympics. Nigeria and the Bahamas have their own CBDCs in circulation.

Earlier in December, Visa announced the creation of a global crypto advisory practice to help financial institutions develop their cryptocurrency businesses as demand for crypto commodities grows.

Related Article | Visa is building a payment channel network on Ethereum

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Visa is working with Consensys to build a payments infrastructure for CBDCs

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