ConsenSys and Visa, the blockchain startup software company, are developing a pilot program for central bank digital currencies (CBDC). This will allow them to test retail applications like cards and wallets.
To discuss the government’s goals with digital currencies that are government-backed, both firms will first meet 30 central bank representatives. This pilot program will begin in spring 2019.
Visa To Pilot CBDC In Select Countries
Visa (V), announced Thursday that they will team up with Consensys, a blockchain software company to develop a central bank digital currency offramp (CBDC).
The payments giant plans to launch a “CBDC sandbox” in the spring, where central banks can try out the technology after minting it on Consensys’ Quorum network.
Visa Trades At $214. Source: TradingView
Customers will be able to use their CBDC-linked Visa card or digital wallet anyplace Visa is accepted globally, according to Catherine Gu, Visa’s head of CBDC, who spoke with ConsenSys in a blog post Q&A.
Gu Said
“If successful, CBDC could expand access to financial services and make government disbursements more efficient, targeted and secure – that’s an attractive proposition for policy makers.”
The CBDC, a digital version of a central bank obligation, is comparable to the US Dollar.
|Visa Survey Reveals That Crypto Payments could Boom in 2022
National CBDCs are being launched
This decision is coming as global regulators struggle to determine how CBDCs should be treated in an evolving financial environment dominated by cryptocurrency. It is not clear whether crypto or digital money can replace fiat currencies, but it does raise a serious issue.
Mastercard announced in 2020 the launch of a CBDC testing platform. This allowed banks to simulate the distribution, issuance and exchange of CBDCs between banks and financial service providers.
“Central banks are moving from research to actually wanting to have a tangible product they can experiment with,” Chuy Sheffield, Visa’s head of crypto.
Visa’s success could bridge the gap between financial institutions and central banks. More than 80 million merchant locations around the world accept Visa.
Over the past two years, more countries have been investigating CBDCs than ever before. According to the Atlantic Council’s CBDC tracker, at least 87 different countries — accounting for 90% of global GDP — are considering financial technology in some way.
China is already launching a series of digital currency pilot programs and will accept it for the Beijing Winter Olympics. Nigeria and Bahamas both have their own CBDCs.
Visa has announced, in December 2018, that it will establish a global crypto advisory firm to help financial institutions develop their crypto operations and meet growing demand.
|Visa Is Building A Payment Channel System On Ethereum
Featured Image from Pixabay. Chart by TradingView.com