Visa Partners With ConsenSys• January 14, 2022 5:49 pm • Comments
Visa recently announced that it would partner up with ConsenSys in order to connect traditional financial institutions with central bank digital currencies.
The goal of the partnership is to allow customers to use Visa cards that are connected to central bank digital currencies in any place that regular Visa cards are accepted all around the world.
If this were to be completed, CBDCs would be just as accessible and usable as regular fiat currencies for regular consumers which would greatly boost the rate of crypto adoption.
.@Visa is joining forces with @ConsenSys to help connect central bank digital currencies (CBDCs) with traditional finance.@mikeybellusci reportshttps://t.co/UeEPixFMTM
— CoinDesk (@CoinDesk) January 13, 2022
Customers will eventually be able to use their CBDC-linked Visa card or digital wallet anywhere that Visa is accepted globally, Catherine Gu, Visa’s head of CBDC, said in a blog post Q&A with ConsenSys.
“If successful, CBDC could expand access to financial services and make government disbursements more efficient, targeted and secure – that’s an attractive proposition for policy makers,” Gu said.
Visa’s CBDC Payments Module was created as an on-ramp for CBDCs to existing payment networks, according to Gu. Banks and issuer processors will be able to plug into the module and integrate their existing infrastructure, she added.
Visa has been involved in crypto related projects as early as 2019 and has leveraged it’s existing payment network as a way for customers to to buy crypto as well as to convert crypto back to fiat currency.
To help garner greater acceptance and to provide trials into what this potential experience might be like, Visa has mentioned that they are working on a potential “sandbox” where banks can actually experiment with the new technology.
That being said, central banks don’t seem to be introducing any digital coins any time soon despite the fact that they are starting to be interested in testing the theory out.
Companies have been advising the Federal Reserve on digital currencies for over a decade already.
Hopefully, with the support of Visa in helping to make crypto easily accessible and usable over it’s widely accepted payments platform and utilizing it’s partnership with ConsenSys, this will encourage sooner change.
Yahoo reports on the many advantages of the Visa-ConsenSys partnership and why it will benefit everyone:
The partnership uses a “two-tier” distribution model for CBDCs. Central banks would design their digital currency on Consensys’ Quorum where they would set its monetary and governance rules. They then use Visa’s infrastructure to distribute the currency via financial intermediaries like commercial banks.
Eswar Prasad, a senior professor of trade policy at Cornell University and author of “The Future of Money,” explained to Yahoo Finance some of the advantages of the Visa-Consensys model. It doesn’t cut payment providers out of the equation, and could allow competition for who can provide the most efficient, low-cost services.
The company continues to explain on their website that the experience that they are aiming for will be very similar to the experience that is currently available today.
If CBDC networks are integrated into our banking apps, we would be able to use CBDC-linked cards just as simple as regular credit and debit cards.
Visa continues to work on various other projects to shape the future of of crypto which will become more and more integrated with future financial systems.
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