Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
With UPC, one person in Peru will not have to worry about sending the Peruvian Sol to someone in Ghana. The design of the UPC is billed to make it feasible to easily convert the Sol to Cedes and be cashed easily by the recipient.
American multinational financial services corporation Visa Inc (NYSE: V) has unveiled its plans to foster interoperability amongst a wide variety of digital currencies. As announced by the San Francisco-based payment firm, its in-house developed “Universal Payment Channel” (UPC) which has been under development since 2018 will help in connecting various digital currencies across multiple blockchain networks. According to Visa Global CBDC Product Lead, Catherine Gu, the UPC channel will make it possible to send money in, for example, the Digital Dollar, and it is received in Tether (USDT) at the other end.
Highlighting the need for this interoperability as a yardstick to boost the growth and co-existence of all forms of digital assets, Catherine said achieving this goal is possible “in the not-too-distant future,” adding.
“This very well may be a reality. But getting there will take solving one key problem: cross-chain interoperability. In other words, how do you get different digital currencies, relying on different tech stacks and protocols, with different compliance standards and market requirements, to “talk” to each other in a wider network of value?” She asked, pointing to the reason for the debut of UPC.
The Visa executive pointed out that the Universal Payment Channel will act as a hub or ‘Universal Adapter’ that will be “interconnecting multiple blockchain networks and allowing for secure transfer of digital currencies.”
The Need for UPC Interoperability Tool by Visa
The advent of digital assets designed to revolutionize today’s payment systems is taking the center stage in financial innovations today. From Bitcoin (BTC) to Cardano (ADA), and to the variety of stablecoins out there today built atop decentralized blockchain networks, several Central Banks have seen the potential advantages in churning out a digital version of the fiat currencies being used in their respective countries.
While digital currencies backed by blockchain technology are growing towards mainstream adoption and Central Bank Digital Currencies (CBDCs) are still in their infancy, it can be deduced that in the coming decade, these new forms of money are those that will permeate the financial ecosystem.
In reality, this scenario will be compounded by numerous digital currencies and specific preferences amongst consumers around the world. With UPC, one person in Peru will not have to worry about sending the Peruvian Sol to someone in Ghana. The design of the UPC is billed to make it feasible to easily convert the Sol to Cedes and be cashed easily by the recipient.
Legacy payment systems are known to process thousands of transactions per second, while the most advanced of blockchain networks still battle the challenge of low transaction throughput. The Visa UPC will be designed off the blockchain, and help mitigate the flaws of various blockchain protocols powering stablecoins, however, without compromising the other advantages that these protocols may brandish.
“UPC’s specialized payment channels would be established off the blockchain and leverage smart contracts to communicate back with the various blockchain networks, delivering high transaction throughput securely and reliably and improving speeds overall,” Catherine added.