Visa, one of the largest financial companies in the world, has applied for a patent to develop its own digital currency.
This application, made on November 8, 2019 under the name Visa International Service Association, was published publicly by the US Patent and Trademark Office the other day.
Visa’s patent is related to a new digital money system managed by a particular central organization. It is not possible to call it a cryptocurrency system since it is a “central institution”. But it is quite possible to call it the “digital money” system. Because Visa states that this blockchain-based system can replace physical money.
Will Be Connected To The Center
In Visa’s patent application, this digital money system is said to be connected to a certain center. When Visa refers to a “central organization”, it specifically refers to “central banks”.
Today, we know that blockchain-based systems can operate decentrally. As an example, we can of course show cryptocurrencies like Bitcoin. But Visa does not want this system to operate decentrally. The company makes a note about this issue:
“There are some areas where cryptocurrency systems are superior to nominal money systems. For example, cryptocurrencies can be traded at a much faster rate compared to fiat money. Also, some cryptocurrencies can be more reliable because they are blockchain-based and the data on this network cannot be changed. However, cryptocurrencies are not regulated like fiat currencies. Also, since cryptocurrencies work with electronic devices, it will not be practical for a state to turn its own monetary system into a cryptocurrency system. Because some of the people living in that country may not have access to electronic devices. This makes the transition from fiat to crypto money difficult. ”
Referring to the regulation of cryptocurrencies regarding Visa, Visa; He also states that it is not practical for a country to fully switch to the cryptocurrency system.
Can Replace Cash
Cryptocurrencies have emerged to replace physical currencies, but Visa doesn’t think it’s possible. Because in order for a crypto coin to replace a nominal coin, everyone in that country must have a smartphone and know how to use it.
Visa therefore proposes to use a central digital money system that will not replace physical money, but instead support it. To quote the patent, Visa talks about “a digital monetary system based on physical money” here. Therefore, the aim of the company is not to eliminate physical money completely like cryptocurrencies, but to gradually digitize it.
According to the information contained in the company’s patent, this system can be 100% digital. Visa even states that with this system, “the use of cash in the markets can be completely ended” and the payment ecosystem can be “improved” in general.
Not Started Yet
The fact that Visa has filed such a patent does not mean that the company will definitely implement this project. So the answer to the question “Is Visa taking out its own digital money?” Is no for now.
But this is; this does not mean that the patent application is insignificant. Because this patent application is a concrete proof that Visa has some plans about digital currencies. This application also shows that Visa is not interested in a decentralized digital currency, but a central digital currency.