Visa has been active in the engagement with crypto, and this week is no exception. Reports have revealed that the payment facilitator and the financial services company have deployed their first smart contract on Ethereum Testnet.
The move is not the first to signal Visa’s increased acceptance to embrace crypto in its operations.
Visa universal payment channel
The company shows a clear investment in becoming a leader in processing payments through central banks through crypto. Visa’s first smart contract deployment was a payment channel accepting both Ether and USDC. This is a conceptual protocol under development by the payment processor that will enable interoperability between central bank digital currencies (CBDCs), known as the “Universal Payment Channel” or UPC.
Now is the time given the global discussion on CBDCs. This week alone, Nigeria is seeking to be the first country in Africa to launch a CBDC, the Bank of England has released its CBDC forum members, and the Central Bank of New Zealand has solicited public comment on CBDCs. . Of course, the biggest story of speculation is the recent bitcoin ban in China, coupled with rumors of the country’s exploration of a “digital yuan.” Through it all, it’s safe to say that crypto and centralized currencies have been at the forefront of most countries’ treasury departments as of late.
Visa’s UPC is designed to support different CBDCs on a variety of blockchains. The company’s chief crypto, Cuy Sheffield, described the initiative as a “concept for longer-term future thinking around how Visa could potentially help become a bridge between a digital currency on a blockchain and another digital currency on another blockchain “.
Ethereum testnet is host to Visa's first take at a Universal Payment Channel protocol. | Source: ETH-USD on TradingView.com
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It’s all part of the plan
This week’s development is far from Visa’s first step in getting into crypto. Last month the company bought a CryptoPunk and posted a positive outlook around NFTs. And midway through 2021, the company said more than $ 1 billion had been spent on encrypted Visa cards during the year. Through it all, Visa has shown a clear favorite in Ethereum also, and now use the channel again with the universal payment channel. The company’s clear engagement with Ethereum could prove fruitful in establishing a new blockchain institutional membership.
In the correspondent UPC Research and Analysis Report published by Visa, the company displays a clear desire to be a “network of blockchain networks” for global transactions. 21Shares digital asset tracker described Ethereum as “The single most important innovation within the crypto-asset and blockchain industry since the inception of Bitcoin in 2009.” Should Visa’s UPC be built on the backbone of Ethereum? There are good reasons to be optimistic about the future.
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