Thailand currency

Visa to test digital currency services

Visa Inc has joined rival Mastercard Inc in offering central banks a way to test retail apps for digital currencies they might issue.

The card payment provider would begin piloting a program this spring with ConsenSys Inc, a blockchain software company, after discussions with about 30 central banks on goals related to government-backed digital currencies, Visa said.

Governments around the world have been exploring the release of central bank digital currencies (CBDCs) amid fears that fast-growing cryptocurrencies could destabilize financial markets or displace fiat currencies.

Photo: Reuters

“We believe that stablecoins and CBDCs will co-exist in the future, and there will be a number of different approaches to building products based on that,” Visa’s head of cryptocurrencies Cuy Sheffield said.

Payment service providers likely see government-backed digital assets as a safe and secure way to use blockchain, which aims to be faster and more efficient than traditional electronic transactions.

Mastercard launched a similar CBDC testing platform in 2020.

Additionally, Visa offers payment cards linked to USD Coin, a stablecoin issued by a consortium that includes Circle Internet Financial Inc.

Nigeria and the Bahamas are among the countries already broadcasting CBDCs, and China is piloting a digital yuan in several cities before planning to push its use at the Beijing Winter Olympics.

ConsenSys, led by Ethereum co-founder Joseph Lubin, has worked with several central banks to test CBDCs, including the Hong Kong Monetary Authority, Reserve Bank of Australia, and Bank of Thailand.

The US Federal Reserve is expected to release a report valuing a government-backed virtual currency in the coming weeks.

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