on the crypto
Visa appears to be laying the foundations for a future in which legal currencies such as the US dollar could easily be transformed into a digital currency of the Central Bank Digital Currency (CBDC).
A patent that replicates the exact equivalent of physical money, in a digital version
The California-based payment giant, which processes an average of 100 million transactions every day, has filed a patent application for a process of transforming the physical fiat currency into a new digitized version.
The patent was filed with the U.S. Patent and Trademark Office in November and was made public Thursday and says the system would be able to mint digital fiat currency and keep an account of all issues on the blockchain.
The main currency taken into consideration is certainly the dollar but, according to the Forbes survey, the patent could extend to pounds, yen and euros. Managed by a "central entity computer", the system would also eliminate the circulation of physical money.
Apparently, the newly created digital fiat would be the exact equivalent of physical money. Even the name and serial number would be reported in the new system.
The unknown of the "central entity computer"
The patent also states that a sort of "certificate of trust" would be needed to mint digital cash, presumably to keep the issue a strictly controlled process.
Visa hasn't said much about what a "central entity computer" would be specifically, although the patent states: "A central entity can be a central bank, which regulates a monetary supply."
Part of its role, apparently, is to act as a monetary surveillance body, charged with managing volumes and ensuring that the value of the digital currency always remains connected to physical fiat.
The central computer would also be the only one capable of generating new digital cash, the only gatekeeper for value that enters the ecosystem. The patent filed does not reveal other entities, public or private, that play a role in the ecosystem. Visa assumes that the function performed by the central computer would have the authority to put the physical fiat currency out of circulation and even destroy it.
A patent to begin the exploration of innovations in this field
It is important to note that just because Visa has filed this patent application does not necessarily mean that it intends to develop a fiat digital currency system.
What one can guess, however, is that existing electronic payment companies, which have integrated extraordinarily well into the existing legacy system, are now also exploring innovations in this field. On May 12, Visa also obtained a patent for a detokenization system, a means of redeeming a locked asset in a token format.
And what do you think of the digitized future? You have already prepared for this by experimenting with the possibilities offered by automatic trading software such as Bitcoin system? Let us know in the comments below.
