On Thursday, Visa announced a plan to create a system that would allow automatic conversion between different Central Bank Digital Currencies (CBDCs) as well as stablecoins. 

Visa's announcement gave real-world examples of how this would simplify a life where so many CBDCs and stablecoins exist.

"Imagine splitting 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 Sweden’s eKrona, and others preferring a private stablecoin like USDC. How about sending $500 in USDC to a friend in London, and having those funds automatically converted to digital British pounds before they arrive in her CBDC wallet."


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Calling it a “universal adapter” linking businesses, customers, central banks and blockchain systems, the payments giant is setting up a "Universal Payments Channel" (UPC). This will create cross-chain interoperability, allowing customers across multiple networks to conduct financial transactions in real-time, compatible with different digital wallets.

“The UPC hub concept that emerged would connect different blockchain networks by establishing dedicated payment channels between them — whether that means connecting CBDC [central bank digital currency] networks between countries or connecting CBDC networks with vetted private stablecoin networks,” the company said.

Visa — which has been working on UPC since 2018 — said that in the future, central banks will increasingly implement a digital ledger, but the proliferation of digital currency networks will make it less likely that customers and businesses will rely on the same network or even use the same currency. This makes interoperability for digital currencies more urgent than ever.

“For CBDCs to be successful, they must have two essential ingredients: a great consumer experience and widespread merchant acceptance. It means the ability to make and receive payments, regardless of currency, channel, or form factor,” the company said.

On Thursday, Visa uploaded a sample of its code for a UPC smart contract onto Ethereum's Ropsten testnet, outlined the mechanics of UPC in a research paper, and provided a policy guidance for central banks.

Visa also said UPC would have major implications for digital currencies' transaction speeds, saying that UPC would be able to deliver speedier results as a result of smart contracts communicating with blockchain networks — making it a "network working for everyone."

"Ultimately, the UPC solution aims to serve as a network of blockchain networks — adding value to multiple forms of money movement, whether they originate on the Visa network, or beyond."