Visa, an American multinational financial services organization, said that it will endeavor to make CBDCs and stablecoins more interoperable. It’s working on a concept dubbed Universal Payments Channel (UPC), which would act as a hub, linking different blockchain networks and enabling safe digital currency transfers. The capacity of different computerized systems to easily connect and share information is referred to as interoperability.
CBDCs would be able to be moved from one blockchain to another, and stablecoins would be able to function on various blockchains thanks to the UPCs. On September 30, Visa issued a whitepaper describing its critical function as an interface for CBDCs and stablecoins. The move has the potential to transform digital token payments.
In view of the continuing digital revolution, or digital money, Visa stressed the need of having such an interface:
The rise of digital assets such as cryptocurrencies, stablecoins, and CBDCs has resulted in an explosion of blockchain networks with various characteristics and functionalities. As the number of blockchain networks grows, so does the likelihood of transacting parties being in the same network.
In such a scenario, ubiquitous, massively scalable, and globally accessible payment mechanisms are required.
To succeed in the financial system, CBDCs also require a positive customer experience and widespread merchant acceptance, or the capacity to make and receive payments regardless of currency or channel.
With the aid of Visa’s interface platform UPC, these problems may be solved. The whitepaper outlined the following benefits and functionalities of Visa enabled UPCs:
The UPC would create specialized payment channels across blockchains, such as linking CBDCs from different nations or private stablecoin networks. Its goal is to act as a hub for blockchain networks.
By developing new payment channels within the UPC hub, it will be able to introduce a new and trustworthy blockchain to the network of networks.
UPC’s customized payment channels will transmit payments in a secure way with a high transaction volume.CBDCs will be helpful and appealing to the public and enterprises thanks to UPC’s cross-chain compatibility.