Visa Deploys First Smart Contract on Ethereum for its “Universal Payment Channels” Platform for CBDCs and Stablecoins
Payment giant Visa revealed its “Universal Payment Channels” (UPC) platform for central bank digital currencies (CBDCs) on Thursday.
In its paper, Visa noted that with a “significant growth” in digital tokens in the form of crypto, stablecoins, and CBDCs, as the number of distributed ledger technology (DLT) networks increases, transacting parties are getting scattered.
Here, the company envisions a future payment network built on top of DLT networks. This is where Visa’s interoperability platform for digital currencies UPC comes into play.
UPC is a scalable, interoperable platform for digital currencies which operates in a hub-and-spoke model, where clients register with a UPC hub to route their transactions to other clients.
Visa ticks cross-border payments for CBDCs and a marketplace for digital currencies as UPC’s use cases. It aims to become a bridge between independent CBDC networks and to connect regulated stablecoins with CBDCs.
“We envision that the development of this technology will significantly expand the utility of digital currencies as means of making digital payment across a network of businesses, consumers, and developers.”
“UPC's specialized payment channels would be established off the blockchain and leverage smart contracts to communicate back with the various blockchain networks, delivering high transaction throughput securely and reliably and improving speeds overall.”
Check out Visa’s first sample smart contract here https://t.co/mlqyRlMeqO
— Cuy Sheffield (@cuysheffield) September 30, 2021
Visa sees privacy, concurrent transactions, UPC-as-a-Service, and liquidity management on layer 2 in the future of its Universal Payment Channels.