Visa launches universal payment channel for stablecoins and CBDCs
Visa, one of the biggest companies to be supporting crypto-related products over the last 2 years, has announced the launch of a universal payment channel that would support transactions between stablecoins and CBDCs.
It is a huge and ambitious idea from Visa at this time as it hopes to establish a payment gateway channel to rival the payments system that exchanges fiat currencies at this time. The project is still in its nascent stages and the timelines have not been announced as yet but with the resources it has, there is little doubt that it would have the capacity to get a project of this scale, done. This channel would help to freely exchange stablecoins and CBDCs, like those announced by the likes of Nigeria and in the works from countries like China, to be freely exchanged with one another.
This assumes that stablecoins and CBDCs would be here to stay and they would need to supplement each other and also be able to work with other CBDCs for the digital payment system to be able to rival that of the fiat payment system that we have now. This platform is expected to work like a Layer 2 solution where the initial transaction processing happens in a different layer and not on the blockchain as the blockchain tends to slow down processing and also increase fees. The transactions, after being processed, would be confirmed on the blockchain and this would help to combine the speed of the legacy networks that we have now with the transparency and the security that the blockchains offer.
This is indeed a massive idea as the proposed payments channel is likely to have its own processes and policies and it would need the companies that back the stablecoins and the countries that issue the CBDCs to be receptive enough to make their digital currencies compatible with the new payment channel. This could be a roadblock in the long term with many countries still reluctant to accept stablecoins and the notion of CBDCs and even those who accept these ideas might be reluctant to participate in a private payment channel and may choose to have their own channel. All this points to the fact that interesting times are ahead for the crypto industry and with more and bigger private players looking to actively participate and support such innovations, things can only be deemed positive.