The Visa company has joined forces with the American start-up ConsenSys, specializing in blockchain, to create an infrastructure that will allow central banks to experiment with the deployment of digital currencies (CBDCs).
Visa is accelerating in cryptocurrency. After joining forces with around fifty platforms, such as Coinbase, last year to allow its customers to use their cards to make payments in digital currencies at 70 million businesses around the world, the American card giant payment wants to participate in the rise of national digital currencies. In this context, the group has joined forces with the American start-up ConsenSys, specializing in blockchain. The latter was launched by Joseph Lubin, co-founder of Ethereum, a computer protocol competing with bitcoin.
This partnership aims to create an infrastructure, available in the spring, which will allow central banks to experiment with the deployment of digital currencies (CBDCs). In this perspective, they will benefit from the Quorum protocol implemented by ConsenSys. It is on the latter that central banks will be able to design their digital currency and set their monetary and governance rules. Visa will then be responsible for distributing the currency through intermediaries such as commercial banks.
“Digital versions of traditional currencies bring little innovation”
The new infrastructure dedicated to these digital currencies will be able to connect to existing payment modules, which means that businesses will rely on it to issue payment cards or digital wallets (wallets). “The main challenge is to understand how new forms of money can coexist with existing means of payment and systems”, indicated to The Block Catherine Gu, who deals with central bank digital currencies at Visa. She further specifies that ConsenSys is already helping Australia, France and Thailand to develop central bank digital currencies. For its part, Visa launched a cryptocurrency advisory activity a few weeks ago for its professional clients such as financial institutions and merchants.
National digital currency projects have been on the rise for several years. Unlike cryptocurrencies like bitcoin or ethereum, which are characterized by their decentralization, central bank digital currencies (CBDCs) allow states to maintain monetary control and governance. “The digital versions of traditional currencies bring little innovation to what is already being done (most of the euros we use are already virtual). I see a lot of marketing from central banks in the hope that it doesn’t sound like outdated institutions ”, estimated Grégory Raymond, journalist specializing in crypto-assets with Digital. And to warn: “I see in these digital currencies of central banks a danger to individual freedoms: all transactions, even the smallest, will be traced. It is surely preferable to stay in an environment with cash to avoid certain abuses leading to the ultra-surveillance of citizens. ”
87 countries are interested in central bank digital currencies
According to the Atlantic Council’s “CBDC Tracker”, at least 87 different countries, representing 90% of global GDP, are working directly or indirectly on central bank digital currency projects. Establishing an international network of multiple central bank digital currencies would save businesses around the world nearly $ 100 billion a year in transaction fees for cross-border payments, according to a report released in late 2021 by JP Morgan and the firm Oliver Wyman.
China, one of the most advanced countries on the subject, is also in the process of launching the digital yuan, the future means of electronic payment on smartphones that could potentially replace the coins and banknotes bearing the inescapable image of Mao. The Communist regime should also use the Beijing Winter Olympics (February 4 to 20, 2022) as a springboard for its cryptocurrency.
On the Old Continent, a digital euro is also in the making, but the European Central Bank (ECB), which is currently working on the file, estimates that it will not be accessible to inhabitants of the euro zone until 2026. The Bahamas are the first country in the world to have taken the plunge by launching in October 2020 the sand dollar. More recently, Mexico announced its intention to launch its own digital currency by 2024.