Visa builds hub for cross-chain crypto payments

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Key takeaways Visa has announced plans to create an interoperability hub for cross-chain payments. The protocol, called Universal Payment Channels (UPC), will enable the seamless transfer and exchange of digital assets across various blockchains and payment channels. Visa has also started testing the UPC on Ethereum’s Ropsten test network. Share this article

Visa is launching a universal crypto payments hub, enabling interoperability of digital assets across different blockchain networks and payment channels.

Visa plans further integration of crypto

Financial services giant Visa seeks to revolutionize digital payments.

In a blog post published Thursday, the company announced that it has published a research paper describing a universal hub for central bank stablecoins and future digital currencies. The Universal Payment Channels (UPC) protocol will connect various blockchains and digital currency platforms, allowing users to exchange funds between them.

UPC aims to tackle one of the biggest challenges facing digital asset adoption: interoperability between channels. In the blog post, Visa gives an example of what its new hub can facilitate:

“Imagine sharing the check with your friends, when everyone at the table is using a different type of money – some using a central bank digital currency (or CBDC) like Swedish krona eKrona, and others preferring a private stablecoin like the USDC. “

With the UPC protocol, Visa hopes to replicate the seamless cross-border and multi-currency payment functionality in existing international payment systems. Although development is still in its early stages, the company’s research paper describes a solid theoretical framework and multiple use cases for integrating its new product.

The decision to create the UPC protocol shows that Visa expects digital currencies to play a much bigger role in daily payments in the future. For example, many countries are currently experimenting with implementing central bank digital currencies (CBDCs). Additionally, the recent boom in Layer 1 blockchains such as Terra and Solana also increases the need for interoperability between chains.

As more and more money flows through various blockchains and digital asset ecosystems, traditional payment systems will need to adapt to accommodate the new flow.

In addition to Visa’s research paper, the company also rolled out its very first smart contracts for UPC on the Ethereum Ropsten test network at the end of last week. The contract shows an example of a payment channel that accepts both Ethereum and USDC. In the contractual notes, Visa states that while the current version uses a dedicated contract for each pair of assets, future versions will use a single contract to cover the interoperability of all assets.

In recent months, Visa has shown considerable interest in integrating crypto services into its products. In March, Visa began allowing users to settle USDC payments directly on the Ethereum blockchain, making payments more efficient. Last month, meanwhile, the company spent $ 150,000 on an NFT CryptoPunk, which Visa chief crypto Cuy Sheffield described as a way to learn about the emerging trend of NFT through an experiment. practice.

Disclaimer: At the time of writing this feature, the author owned BTC, ETH, and several other cryptocurrencies.

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