Visa, ConsenSys eye central bank digital currencies

Visa has partnered with blockchain technology company ConsenSys to let central bank digital currencies (CBDCs) expand through existing financial networks. Customers could use CBDC-linked Visa cards or digital wallets wherever Visa is accepted worldwide, according to Catherine Gu, Head of CBDC at Visa.

Why should we care?
By collaborating with giants like Visa, central banks will be able to scale their blockchain-based initiatives with impressive speed. “If successful, CBDC could expand access to financial services and make government disbursements more efficient, targeted and secure—that’s an attractive proposition for policy makers,” said Gu at Visa. These partnerships represent a potential boon for payments giants; MasterCard has tapped into the CBDC space, too, and has even worked with ConsenSys on related projects. Crucially, these cool corporate announcements belie governments’ panic over crypto and its potential to destabilize fiat currencies. Decentralized cryptocurrencies could establish a virtual monopoly if CBDCs aren’t rolled out quickly enough, and central banks look to maintain control over national economies without resorting to inappropriate or authoritarian measures. With those fears in mind, CBDC partnerships let governments communicate with consumers, and assert national sovereignty on the blockchain, without interfacing directly with individual citizens—a big no-no that’s currently a hot topic in Congress. "When CBDCs first came about, the assumption was central banks would provide direct access for consumers to open accounts," Gu said. "It's become obvious that it's not part of the mandate of any central bank to maintain customer relationships. This is the role of commercial banks."