While a majority of central bank digital currencies (CBDCs) have not yet been launched for extensive and official public use, Visa is staying ahead of the curve by planning for the eventual circulation of digital currencies. In a research paper published this week, titled “Towards a Two-Tier Hierarchical Infrastructure: An Offline Payment System for Central Bank Digital Currencies”, the payments giant explores the possible infrastructure of the tech behind CBDC transactions, and also considers how to amplify its usability to users.
“To facilitate the secure issuance and transfer of CBDC, we envision a CBDC design under a two-tier hierarchical trust infrastructure, which is implemented using public-key cryptography with the central bank as the root certificate authority for generating digital signatures, and other financial institutions as intermediate certificate authorities,” the brief said.
Most importantly, it is paramount that digital currencies are available for use offline just like physical cash, and this is one way in which current digital online payments and new CBDC transactions can differ. The offline feature will ensure true inclusivity and accessibility by even those who are unbanked or do not have access to the Internet, which is something that is taken for granted in modern society. The proposed paper highlights a system which will create “secure point-to-point offline payments through the use of authorized hardware”.
Visa is gearing up for the eventuality of CBDC launches worldwide, and as one of, if not the leading global payments service provider existent at present, it is no surprise that it is starting preparations early.
Back in May this year, Visa filed for a digital fiat currency patent where physical notes would be converted into serialized digital ones via a centralized computer.
