Visa Patent Filing Would Allow Central Banks to Mint Digital Fiat Currencies Using Blockchain

Visa appears to be like to be laying the groundwork for a future during which fiat currencies, just like the U.S. greenback, may very well be simply changed into a central financial institution digital foreign money (CBDC).

The California-based funds big, which processes upwards of 100 million transactions each day on common, has filed a patent utility for a course of for turning bodily fiat foreign money right into a newly digitized model.

The submitting, which was filed with the U.S. Patent and Trademark Workplace in November and made public on Thursday, says the system would be capable of mint new digital fiat foreign money and hold a tally of all issuances on the blockchain. Managed by a “central entity pc,” the system would additionally take away bodily money from circulation.

By the sounds of it, newly created digital fiat could be the precise equal, like for like, with bodily money. The denomination and serial quantity would even be carried over into the brand new system. The patent additionally says some kind of “trusted certificates” could be required to mint the digital money, presumably to maintain issuance a tightly managed course of.

Visa does not give a lot away about what a “central entity pc” could be particularly, although the submitting states: “A central entity could also be a central financial institution, which regulates a financial provide.”

A part of its position, it appears, is to behave as a financial overseer, charged with managing volumes and guaranteeing the worth of the digital foreign money all the time stays linked to the bodily fiat. The central pc would even be the one one capable of generate new digital money; the only gatekeeper for worth getting into the ecosystem.

There is not any sense from the submitting that different entities, public or non-public, would play a job within the ecosystem. Visa assumes the entity operating the central pc would have the authority to take bodily fiat foreign money out of circulation, and even destroy it.

It is essential to emphasize that simply because Visa has filed this patent utility does not essentially imply they’re intent on creating a digital fiat foreign money system. What it does present, nevertheless, is present digital funds companies, ones which have executed terribly nicely within the present legacy system, at the moment are additionally exploring new improvements within the realm of cash.

On Might 12, Visa was additionally awarded a patent for a detokenization system – a way to redeem an asset locked up in token format.

CoinDesk requested Visa whether or not the corporate was drawing up a digital fiat foreign money system in anticipation that it might change into an important infrastructure supplier for future CBDCs. A spokesperson hadn’t responded by press time.