• Visa Launches First Ethereum Smart Contract for its “Universal Payment Channels” Platform for CBDCs and Stablecoin

  • On Thursday, payment giant Visa unveiled its “Universal Payment Channels” (UPC) platform for central bank digital currencies (CBDCs).

    According to Visa’s paper, with a “significant growth” in digital tokens such as crypto, stablecoins, and CBDCs, as the number of distributed ledger technology (DLT) networks grows, transacting parties are becoming dispersed.

    In this case, the company envisions a future payment network built on DLT networks. This is where Visa’s UPC digital currency interoperability platform comes into play.

    UPC is a scalable, interoperable digital currency platform that works on a hub-and-spoke model, with clients registering with a UPC hub to route their transactions to other clients.

    Visa lists cross-border payments for CBDCs and a digital currency marketplace as UPC use cases. It intends to serve as a link between independent CBDC networks and regulated stablecoins.

    We anticipate that the advancement of this technology will greatly expand the utility of digital currencies as a means of digital payment across a network of businesses, consumers, and developers.”

    Visa has also tested its first smart contract on Ethereum’s Ropsten testnet. This payment method accepts both Ether (ETH) and USDC, a stablecoin. Visa stated,

    “UPC’s specialized payment channels would be established off the blockchain and would use smart contracts to communicate back with the various blockchain networks, delivering high transaction throughput securely and reliably while also improving overall speeds.”

    In the future of its Universal Payment Channels, Visa sees privacy, concurrent transactions, UPC-as-a-Service, and liquidity management on layer 2.

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