Global payments giant Visa has partnered with blockchain technology solutions firm Consensys to develop technology for Central Bank Digital Currencies (CBDCs).
Announcing plans to launch in the spring, Visa wants to build an on-ramp, or a ‘sandbox’ for central banks to mint CBDCs using Consensys’ Quorum protocol, reports Coin Bureau.
Visa and Consensys will use a ‘two-tier’ distribution system for CBDCs where central banks can use Quorom to set the coin’s monetary attributes, and then use Visa’s payment channels to distribute it to financial institutions.
Data from The Atlantic Council suggests that 87 countries representing 90 per cent of the world’s GDP are exploring CBDCs in some shape or form.
Commenting on the announcement, Catherine Gu, Visa’s Head of CBDC, said: “Visa’s CBDC Payments Module is designed to provide an on-ramp for CBDC to existing payment networks, so that CBDC networks can easily connect to traditional financial service providers.
“For banks and issuers processors, they’ll be able to plug into the module and integrate their existing infrastructure and be enabled to do things like issue CBDC-linked payment cards or wallet credentials for consumers to use.”
She added that the next two to three years will be “critical” in understanding the role CBDC will play in payments systems in the future
She explained: “The key challenge is understanding how new forms of money can coexist with existing means of payments and existing systems.”
WARNING: Nothing in this article should be read or understood to be financial and/or investment advice. Readers should take their own financial advice from a suitably qualified independent financial adviser before making any investment decisions.
Get the latest money-saving and benefits news sent straight to your inbox. Sign up to our weekly Money newsletter here.
