Visa Inc has revealed its plans to begin a piloting program with blockchain software company ConsenSys to test central banks’ digital currencies with wallets and cards.
The program should begin this spring after both companies confirmed they’ve held talks with central banks from approximately 30 countries regarding their plans on introducing digital currencies (CBDCs).
Cuy Sheffield, Visa’s head of crypto said “stablecoins and CBDCs will coexist in the future and there’ll be a number of different approaches to creating products based on that”.
Catherine Gu, Visa’s Head of CBDC added: “CBDC could expand access to financial services and make government disbursements more efficient, targeted, and secure – that’s an attractive proposition for policy makers.
“With CBDC, a central authority could send fast payments to a targeted set of users and program specific spending parameters.”
Most of the ‘traditional’ payment service providers began to look at the government-backed digital assets as a safe and secure way to utilise blockchain, which is also faster and more efficient than the usual electronic transactions.
Back in 2020, Mastercard launched a similar CBDC testing platform.
Additionally, Visa recently began to offer payment cards linked to USD Coin, a stablecoin issued by a consortium that includes Circle Internet Financial Inc.
Some of the nations already circulating CBDC are Nigeria and the Bahamas, while China is also piloting a digital yuan in several cities before plans to push use at the Beijing Winter Olympics.
ConsenSys, led by Ethereum co-founder Joseph Lubin, has already cooperated with some central banks to test CBDCs including the Hong Kong Monetary Authority, the Reserve Bank of Australia, and the Bank of Thailand.
According to The US Federal Reserve Chair Jerome Powell, a report evaluating a government-backed virtual currency is expected soon.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.