Visa Completes Successful Pilot of Cryptocurrencies with Hong Kong Monetary Authority
Summary:
Visa has successfully completed the Hong Kong Monetary Authority's Central Bank Digital Currency Pilot Program alongside HSBC and Hang Seng Bank. The pilot, which aimed to test the tokenization of deposits, demonstrated that interbank transfers could be completed nearly instantly, utilizing blockchain networks. The platform was operational 24/7, outperforming traditional systems. Encryption was used to ensure transaction privacy. Visa plans to explore tokenized asset markets and programmable finance, taking the Pilot Program to its second phase. Visa is also investing $100M in generative AI.
Visa, the payment processing giant, has successfully wrapped up the Central Bank Digital Currency (CBDC) Pilot Program of the Hong Kong Monetary Authority, in collaboration with HSBC and Hang Seng Bank. The November 1 public statement reveals that the e-HKD Program employs a method of tokenizing deposits, in which each deposit made to a bank is produced via the company's proprietary digital ledger, with the bank's balance sheet serving as collateral. Vital outcomes outlined by Visa include a near-instant settlement time for interbank transactions, as observed in the program's tests across banks. Tokenized deposits underwent a burning process on the sending bank's ledger and production on the receiver's, while realizing parallel interbank settlements via the wholesale CBDC layer on trial. Moreover, Visa's platform proved competent in 24/7 operation during the pilot study, surpassing conventional pay systems that often become inactive past regular working hours or during weekends. The company revealed that its tests were conducted on blockchain networks with global availability and maintained by teams in varied time zones. Notably, tokenized deposits were handled via encryption, offering viewable access on blockchain explorers but keeping details like user identities, balances, and transaction amounts concealed from non-bank users. As a further move, Visa is investigating tokenized asset markets and programmable finance. The pilot study's "Property Payments" use case demonstrates this, in which the remaining balance tokens' transmission from a buyer to a property developer can be automated on the contract's completion date, thus curtailing any delay in finalizing the process. Following the success of the first phase, the e-HKD Pilot Programme will progress to its second phase. In related news, Visa has committed to investing $100M in generative AI.
Published At
11/1/2023 5:30:00 PM
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