Visa Eyes CBDC Tech With new ConsenSys Partnership
In anticipation of the launch of several central bank digital currency (CBDC), Visa and ConsenSys have announced a partnership.
The payments giants and the Ethereum infrastructure builder will work together to help CBDC networks bridge the gap with traditional financial institutions.
Visa and ConsenSys Announces Partnership
The partnership will allow Visa users to link their Visa card or digital wallet to the CBDC and use it anywhere Visa is accepted. The news was made public in a blog post by the head of CBDC at Visa, Catherine Gu.
A successful CBDC project will provide better access to financial services and make government disbursements more secure and efficient. Gu described this as “an attractive proposition for policymakers.”
The partnership with ConsenSys is a big move for Visa to expand its crypto services. ConsenSys is one of the biggest names in crypto when it comes to developing blockchain infrastructure.
Developing a CBDC sandbox shouldn’t be any problem with both company’s expertise. Central banks can pilot their digital currencies and test their distributing technology within this framework.
Governments are Increasingly Interested in CBDCs
CBDCs have become a major policy focus for central banks worldwide as they struggle to contain the rate of crypto adoption. Several countries, including China, Russia, Nigeria, South Korea, and Sweden, are running pilot projects or have even launched a national digital currency.
Others, such as the European Union and the US, are seriously considering it.
Many stakeholders believe that the digital tokens issued by central banks will get more adoption due to the regulations and trust they would enjoy. This is because, unlike the popular crypto assets, CBDCs will be regulated and permissioned.
But several crypto enthusiasts are skeptical that these government-controlled solutions will have more harm than good. Risks of privacy issues, abuse of control over financial access, and further inflation have been raised.
Can CBDCs Replace Crypto?
While central banks appear to be more focused on curbing crypto adoption, the likelihood of CBDCs replacing crypto is low. The stability of CBDCs means they might be able to replace stablecoins like USDT, BUSD and others.
But for crypto investors who thrive on volatility, investing in CBDCs doesn’t have that much appeal as investing in projects like Bitcoin, Ethereum, Dogecoin, Shiba Inu, and others.
However, there’s the possibility of more crypto regulations on a global scale this year. As the industry appeal continues to grow, governments around the world would want to stamp their authority on the space to phase out the illegal use of these assets.Source