May 19, 2020 – Visa applied for a patent in creating a digital currency on centralized computers. The utility points to a central bank use case.
The patent filed in November 2019 said this invention will bridge the advantages of cryptocurrency to fiat currency provided by central banks. The patent filing can be found here.
The patent noted the advantage of cryptocurrency systems over fiat currency systems. For example, money transfers can be faster. Also, because of the blockchain, cryptocurrency can be trusted because blockchains are “immutable records of transactions.”
The patent also pointed out the disadvantage of cryptocurrencies (for use of central banks). First, crypto is not regulated. Next, since crypto requires the usage of an electronic device, some segments of a country’s population may not have these electronic devices to use them, hence it is not practical for governments to wholly convert their fiat currency systems entirely into cryptocurrencies.
The patent, in essence, explained how it can address this problem. Generally, a central entity will have control over the monetary system, which could be a central bank.
“Embodiments provide a digital fiat currency system for managing digital fiat currency generated based on physical currency. Embodiments provide a private permissioned distributed ledger platform for managing the digital currency. The digital currency may be recorded to a blockchain in association with data such as a serial number of a corresponding physical currency, allowing a central entity to manage the volume and value of the digital currency.”
But will this patent translate to a product? Not necessarily, said a Visa spokesperson to Forbes Magazine.
“While not all patents will result in new products or features, Visa respects intellectual property and we are actively working to protect our ecosystem, our innovations and the Visa brand.”
Source: The Block
This article is published on BitPinas: Visa Files Digital Currency Patent