Visa has conceptualised a solution for the interoperability of central bank central currencies (CBDCs) issued on different blockchains and stackablecoins in payments.
According to a blog post, the Universal Payments Channel (UPS, universal payment channels) platform acts as a hub, connecting multiple networks and enabling the secure transfer of digital currencies.
"Think of it as a 'universal adapter' for blockchains, allowing central banks, businesses and consumers to exchange value seamlessly, regardless of the form factor of the currency," said Visa's head of global products for CBDC Catherine Gu.
According to the company's researchers, many central banks will issue digital currencies in the coming years. Because of their unique design features, it is unlikely that these assets will be able to operate seamlessly on the same network.
"For CBDCs to be successful, they must have two main ingredients: excellent user acceptance and widespread acceptance by merchants. This means the ability to make and receive payments regardless of currency, channel or form factor," added Gu.
The UPS hub will connect different blockchains - whether CBDC networks between countries, or private stackcoin protocols.
Visa noted that UPS also addresses the issue of bandwidth, as most DLT networks are significantly inferior to traditional solutions in this respect. To ensure speed, dedicated UPS payment channels will operate outside of the blockchain and use smart contracts to back it up.
Researchers have already deployed a basic contract in the Ethereum Ropsten test network.
They have been working on UPS since 2018.
To recap, Visa had earlier proposed an offline payment method for CBDC.
Representatives of the company were part of a team of experts who will help the UK authorities to study the central bank's digital currency.
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