Visa announces partnership with blockchain technology firm ConsenSys to develop CBDC on-ramp tools

Payment giant Visa has announced a partnership with blockchain technology company ConsenSys to jointly develop a module designed to help central banks and financial institutions build user-friendly services on central bank digital currency (CBDC) networks,media reported.

Visa said the partnership connects the new CBDC framework with the existing financial ecosystem to create an applicable roadmap and allow consumers to spend with CBDC at any Visa-accepting merchant.

A Visa spokesperson said: “We have held talks with nearly 30 central banks to understand their views on CBDCs and to determine that our network, infrastructure and value-added services can support their CBDCs.”

But a Visa spokesperson also said it was impossible to predict if and when the Federal Reserve or other central banks could launch a CBDC.

Unlike cryptocurrencies such as Bitcoin, CBDCs are electronic forms of central bank money, issued with the support of governments and traded on a centralized permissioned blockchain.

At present, many countries are stepping up their exploration. According to the Bank for International Settlements (BIS) third survey on CBDC in early 2021, the proportion of banks researching CBDC has increased in recent years. Of the survey respondents, 86% of central banks are actively researching the potential of CBDC, and about 60% are conducting CBDC experiments or proof-of-concept.

It is reported that Catherine Gu, head of CBDC at Visa, said in a blog: “If the plan is successful, the scope of financial services of CBDC will be further expanded. In addition, the project can also make the use of CBDC more efficient, safe and targeted. Sex. It’s definitely an attractive proposition for governments.”

But according to Shailee Adinolfi, director of strategic sales at ConsenSys, the widespread use of CBDC will require the combined efforts of central banks and traditional financial players.

According to an external spokesperson for ConsenSys, the company has helped National Australia Bank, Bank of Thailand, Societe Generale, Hong Kong Monetary Authority and other central banks to establish CBDC pilots.

On the CBDC payment module, Catherine Gu, head of Visa's CBDC, pointed out that by connecting to the existing payment infrastructure, it can ensure that CBDC is accepted and used by enterprises from the beginning, which will help various basic developers, financial technology Companies and financial institutions can build new ecosystems on the CBDC network in an orderly manner.

According to the company, Visa’s CBDC payment module is designed to provide an on-ramp to existing payment networks so that the CBDC’s network can easily connect to financial service providers. For example, banks will be able to go into this module and integrate with their existing infrastructure to issue CBDC-related payment cards or wallet credentials, etc.

“The user experience we envision looks very similar to current payment methods.” Catherine Gu further explained, “If the CBDC network is seamlessly integrated into users’ existing banking applications, users will be able to use CBDC-related payments at checkout. Visa card."

Visa expects to pilot the module this spring, when the company will be ready to work with central banks, financial institutions and fintech firms to integrate the module into their technology stacks, Catherine Gu said.

She also said: “In the next two to three years, understanding the role that CBDC will play in future payment systems will become critical. In addition, the most critical challenge is to explore how new forms of money interact with existing payment methods and existing systems. coexist."