Visa is working on a universal payment channel project that connects blockchain networks to a variety of cryptocurrencies, stablecoins and central bank digital currencies (CBDCs).
As the company announced on Thursday (Sept. 30), the payments giant’s research and product teams are working on a universal payment channel (UPC) initiative, which is a blockchain interoperability hub that connects blockchain networks and allows for transfers of digital assets.
“Imagine splitting the check with your friends, when everyone at the table is using a different type of money — some using CBDC like Sweden’s eKrona, and others preferring a private stablecoin like USDC,” Visa said in its announcement. The company added that this type of tool “may well be a reality” in the “not-too-distant future” with the UPC project.
The project is designed to create dedicated payment channels between blockchain networks, connecting CBDC networks from country to country as well as with private stablecoin networks, per the announcement.
The Visa research team originally began working on the UPC concept back in 2018, developing an interoperability framework that would run independently of the underlying blockchain mechanisms. “Ultimately, the UPC solution aims to serve as a network of blockchain networks — adding value to multiple forms of money movement, whether they originate on the Visa network, or beyond,” Visa said in its announcement.
Visa last year announced it was linking its international payments network to Circle’s U.S. Dollar Coin (UDSC). The collaboration saw Visa providing a credit card that lets companies make and receive payments with the digital currency.
“This will be the first corporate card that will allow businesses to be able to spend a balance of USDC,” Cuy Sheffield, head of crypto at Visa, said at the time.
In July, Visa reported it had formed partnerships with more than 50 cryptocurrency platforms and exchanges to allow end users to spend digital currencies via crypto-linked cards, with those customers spending more than $1 billion through the first half of 2021.