In Brief:
- Visa is working on a Universal payment channel
- The channel will work as a bridge to make stablecoins and CBDCs interoperable.
- The company began developing a framework for blockchain interoperability in 2018.
Payment giant Visa Inc. is working on a Universal payment channel (UPC) that will help to connect different blockchains for various digital currencies and Central bank digital currencies (CBDCs).
According to the announcement, the company proposes a hub-and-spoke payment route referred to as “Universal Payment Channels” that can be utilized to support digital token transfers.
“It is crucial to facilitate payments that are universal across networks, scalable to massive loads and highly available,” according to the UPC whitepaper. The Universal Payment Channel (UPC) will make Stablecoins and CBDCs interoperable.
The UPC will work as a bridge to transfer Stablecoins between various countries. It will interconnect multiple blockchain networks and will allow users for the secure transfer of digital currencies.
“The UPC protocol facilitates payments through an entity, called UPC hub, which acts as a gateway to receive payment requests from registered sending parties and routes them to registered recipient parties,” per the announcement.
The Research team of Visa started working on the UPC concept in 2018. The main benefit of such a protocol is scaling UPC to millions or even billions of users or transactions.
Visa has been working aggressively in the blockchain space for the last two years. It has also helped increase the adoption of cryptocurrencies. According to a report by Visa, its customers spent more than $1 billion on its crypto-linked cards in the first half of this year. It also purchased cryptopunk NFT last month for 49.5 ETH.
