Crypto Corner: Visa Steps Up On Digital Currency

Mighty Visa (V) has a vision, a crypto vision, and it’ll change the world… and the way we all think about and use money. Over the last few years, Visa has been charging full steam ahead on this vision, forming new partnerships, making acquisitions, and collaborating far and wide across the globe, all with the aim of bringing the world the first ever cross-border, cross-chain, interoperable payment network powering both fiat and cryptocurrencies in tandem… or, in harmony.

The capability that Visa is working to bring to fruition is a Central Bank Digital Currency (CBDC) interoperability designed to provide an on-ramp for CBDCs to existing payment networks, which would allow CBDC networks to easily connect to traditional financial service providers. Banks and issuers processors will be able to plug into Visa’s infrastructure and integrate their existing infrastructure, thus enabling them to issue CBDC-linked payment cards or wallet credentials. Okay, but what does all that mean, exactly?

Imagine it’s the future, and Visa has accomplished their ambitions… we’re all connected, and we’re used to a world where digital currencies are used in everyday transactions, just like fiat money is today. You’ve flown oversees for a business trip and met up with colleagues at a local restaurant. The check comes and it’s time to pay, but… oh no, you have no cell service. No problem. You open your phone, click pay, and tap your phone to the server’s device. The money is transferred to the restaurant directly and converted into the local fiat currency, all done.

This is possible because, in the future, your digital money is downloaded directly to your device and stored in a secure hardware wallet embedded in the device. The wallet is still managed by the wallet provider, but since the digital currency is downloaded directly to your phone, it doesn’t matter if you’re online or not. You go to catch a cab to the next conference with your work buddy, they pay for the cab. Still no problem.

On the way there, you touch devices and your phone (still offline for some reason), adds your half of cab fare to their digital wallet and converts it to local currency. Since you are using Bluetooth or Near Field Communication (NFC, which is used to pay at the grocery store by hovering your phone or watch over a payment terminal), you are good to go and there are no banks, ATMs, or PayPal usernames that need to be exchanged. You have used your CBDC on a business trip thanks to Visa’s vision.

5 Fundamentals

Visa’s cryptocurrency dreams are coming true, powered by the company’s five-pillared plan: easy to buy crypto, easy cash out for fiat, APIs, stablecoin settlements, and CBDCs. Each of these five pillars are integral to bringing Visa’s vision into fruition, so let’s take a closer look at each.

First, Visa is working to make sure it’s easy for people to buy cryptocurrencies. Since the success of this vision will hinge on digital currency adoption, this must be fostered, and it needs to be really easy for people to buy crypto and add it to their wallet. Next, it must be possible for people to cash out their crypto for fiat currency. Nobody wants to dabble in digital currency only to have their fiat held hostage… so, Visa wants to make sure it’s easy for people to cash out to fiat and immediately spend that money anywhere Visa is accepted.

Third, we have APIs, which is short for application programming interface. An API piece is important because it’s what allows software to work together. It allows pieces of technology to play well together to accomplish tasks, like when you need to checkout online and you choose Paypal… an API made that checkout possible. An API will allow banks and neobanks to add cryptocurrency options for their clients.

Next, customers must be able to stay within their ecosystems by settling in stablecoins. For instance, settling in USD Coin (USDC), which is a stablecoin with its value pegged to the U.S. dollar. Finally, the last prong on this plan involves CBDCs. With almost nine out of ten of the world’s central banks considering launching a Central Bank Digital Currency and one in ten actively piloting a program, Visa would like to integrate these currencies right into the network so they can work seamlessly, as in our imagined scenario.

A Crypto Legend In The Mix

To bring this vision to fruition, Visa has partnered with a company named ConsenSys to develop new infrastructure that can help central banks and traditional financial institutions come together and build simple, user-friendly services on top of CBDC networks. ConsenSys is a blockchain technology company headquartered in Brooklyn, New York that was founded in October of 2014 by Joseph Lubin. Joseph Lubin is the perfect person to partner with for this venture, as he’s the co-founder of Ethereum… the man knows what he’s doing. He sees the vision that Visa sees, and together these powerhouses are bringing the new world of money into fruition right before our eyes.

ConsenSys has the same vison of mass integration and adoption of CBDCs, and together the two are working to draw the attention of lawmakers and banks to a deep well of positive outcomes that could be seen with the adoption of CBDCs and those CBDCs being facilitated on the Visa network. They point out that this could enable governments to expand financial access and handle money in a more efficient way.

So where will Visa’s vision take us? We can see some possibilities, but can we truly imagine how this will change the world? Either way, change is upon us, so keep coming back. We have a lot to discuss about crypto, the companies grabbing the bull by the horns in the space, and the systems and tools coming into fruition today that will shape our collective tomorrow.