Last week Visa (NYSE:) announced its plans to launch a foundational transactions network that promises to allow cross-border, cross-tech monetary transfers at scale and at speeds similar to current credit card payments – which is tens of thousands per second. The novelty is that it’s designed to be agnostic to currency geographies, currency types, or technologies.

It’s called Visa Universal Payment Channel (UPC), and the company says that once deployed it will remove virtually all friction between monetary transfers. So, if you’re in Australia and want to send your mother in the U.K. an amount of the cryptocurrency via Visa UPC, it can be converted into her desired currency – let’s the British pound – before it hits her decentralized wallet that runs on .

That exact transaction trajectory would be difficult to execute right now, but Visa says its UPC will be able to handle it – and thousands of others – in seconds. Visa stated in a blog post that it expects the number and variety of currency options to increase over the next few years.

“As the number of digital currency networks increases — each with unique design characteristics — the likelihood that consumers, businesses, and merchants are transacting on the same network and utilizing the same type of money decreases.”
It recognized the necessity for an interoperable backbone financial system that links all traditional finance systems and blockchains. This will allow users to seamlessly transact using their preferred terms. The graphic below shows how the network with the Visa UPC located at the hub will look.

Visa insists its UPC hub will allow for the connection of different geographies and economies through dedicated payment channels. It’s positioning itself as the penultimate network that will seamlessly add new, trusted blockchains to its “network of networks” by creating new payment channels within the UPC hub.

The Visa announcement says it’s not just about cross pollination of currencies via any technology and network – it’s also about speed. They accurately point out that modern credit, debit, and remittance networks handle tens of thousands of transactions per second, however, the largest crypto blockchains – and Ethereum – can barely manage a fraction of that volume. To speed things up, UPC’s specialized payment channels would be off-chain while simultaneously communicating with on-chain smart contracts, delivering high transaction throughput securely and reliably while improving speeds overall across blockchains. It’s almost like taking a high-speed detour around traffic tie ups.

Although this is an encouraging development that will drive widespread adoption of cryptocurrencies and normalize them, Visa’s announcement focused on how the Visa system would work for central bank digital currencies. These are basically un-encrypted dollars created by central banks. Visa may be targeting this government-focused audience in order to increase CBDC adoption and lower reluctance towards the creation of digital reserve currency. We’ll have to wait and see what this means for the rest of us crypto hodlers.

To The Flipside

• Be cautious here. Visa has declared itself the unifier and supreme network. UPC puts all blockchains and financial services on subordinate level to Visa.
• If it is broadly adopted, Visa will be the principus maximus.
• This ambitious power grab aims to centralize and control blockchains via a huge, yet innocuous power grab. Don’t be fooled.

What are the reasons to care?

It was the mismanaged monetary policies, the predatory lending practices, the reckless legislative spending and the hypocritical bailouts of Big Banking and Fat Financing, that caused the rise in popularity and adoption of Bitcoin after the global economic crisis. Are we willing to give blockchain and crypto the same power as before?How can we do that?

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