Visa to accelerate crypto mainstream adoption with new 'Universal Payments Channel'
- Visa deployed its first smart contract on Ethereum Testnet with a payment channel accepting Ether and USDC.
- The payments giant developed a conceptual protocol that enables interoperability between CBDCs for payments.
- Visa's Universal Payments Channel (UPC) will support the exchange of CBDCs on various blockchains.
Visa is focused on cryptocurrency adoption and introduced a solution for payments using central bank digital currencies across blockchains through its concept of UPC.
Visa takes lead in enabling payments through central bank cryptocurrencies
Payments giant Visa has led the way in cryptocurrency adoption several times in 2021. Earlier this year, the company announced plans to work with local crypto companies and facilitate businesses accepting crypto payments.
The company is focused on combining reliable payment solutions with cryptocurrency payments while innovating in the industry. The American financial services firm has developed a protocol that shows how central bank digital currencies (CBDCs) on different blockchain networks could be exchanged and used for payment.
Visa's concept of a "Universal Payments Channel" outlines the interconnection between different CBDCs and paves the way for future payments on the financial services giant.
Cuy Sheffield, Visa's head of crypto, states,
This is a much longer-term future thinking concept around a way that Visa could potentially help become a bridge between one digital currency on one blockchain and another digital currency on another blockchain.
Interestingly, the proposed base layer for Visa's UPC is Ethereum. Though regulation on cryptocurrencies is currently underway in most countries, centralized institutions worldwide have embraced the idea of CBDCs.
Visa is therefore creating a hub for adoption and use of CBDCs to promote the mainstream adoption of digital currencies. Cryptocurrency analysts are considering Visa's move key to Ethereum's institutional adoption.
Pseudonymous analyst @Pentosh1 reacted to Visa's announcement,
First Visa buys an NFT
— Pentoshi Won’t Dm You. hates Dm’s. DM's are scams (@Pentosh1) September 30, 2021
Then they start building on $Eth
Sounds like institutional adoption
Slowly, then all at once pic.twitter.com/o738W1Xt8r
Visa agrees that CBDCs and stablecoins are expected to play a significant role in the future of payments between individuals and institutions worldwide.
Visa's whitepaper describes its UPC concept as follows,
The UPC protocol facilitates payments through an entity, called the UPC hub (or server — we use the terms interchangeably), which acts as a gateway to receive payment requests from registered sending parties and routes them to registered recipient parties.
In addition to the development in CBDC acceptance, Visa has deployed its first-ever smart contract on Ropsten, Ethereum's testnet. The smart contract accepts ETH and USDC both. According to their head of crypto, Visa is keen on ramping up its solutions that include digital currencies and payment products in the future.
Visa aims to be a "network of blockchain networks" through its strides in crypto acceptance and adoption.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
