One of the largest payment processors worldwide, Visa, has announced that it will build a universal payment network. This on the network of Ethereum (ETH).
Potentially major interoperability issues
The payment processor is reportedly already in the process of implementing this payment channel, dubbed the “Universal Payments Channel,” on the Ethereum Ropsten testnet.
The payment processor expects that now that central banks around the world are looking at a CBDC, interoperability is going to be a huge problem. This is because every service provider has to deal with users who pay in different CBDCs at the same time. Visa wants to solve this problem with the universal payment channel.
How might central banks, businesses & consumers seamlessly exchange value across #blockchain networks, no matter the currency? Check out Visa’s latest thinking on the challenge of cross-chain interoperability: https://t.co/lIOzEqAhNp pic.twitter.com/wHrNGYTBya
— VisaNews (@VisaNews) September 30, 2021
Universal Payments Channel
To process payments, which can be made in different currencies, Visa is currently developing a hub called the ‘Universal Payment Channel’. This hub connects multiple blockchains with each other, with which digital currencies can be transferred in a secure way.
With this, Visa seems to be betting on a future in which different currencies on different blockchains will be used by different people, who carry out transactions with each other.
Visa’s work on the ‘Universal Payments Channel’ started as early as 2018 and Visa recently implemented the draft contract on Ropsten testnet. This concept has provisions for channel opening, closing, validity period, dispute resolution and token implementation specifying USDC stable coins.
It is worth noting that it is currently still a draft contract, which means that bugs can still arise or other things do not yet work as desired.