The US Patent and Trademark Office published a patent application that Visa filed to create a digital currency.
The system is described as a method to digitize fiat currencies issued by central banks, through blockchain technology.
The Visa application was originally submitted to USPTO on November 8, 2018. However, it was made public on May 14, with the authorship of Simon J. Hurry and Alexander Pierre. The document proposes a system run by a central entity, which receives requests to generate a digital currency registered on a blockchain. The application includes the serial number and denomination of a fiat currency.
The description of this system indicates that the generation of each digital coin would cause the voiding of the other circulating currency. According to Visa's patent, central banks anywhere could implement this method to transfer value and avoid double-spending. The fiat digital currency could be based on Ethereum, setting addresses for users, the central entity, and the transaction processing network. The computer of the central entity receives requests for digital currency. The request includes a serial number and a denomination of physical currency. The central entity's computer generates the digital currency for the correct fiat money and links it to a serial number. The system records the digital currency on a blockchain. The central entity's computer notifies the generation of the digital currency. The system also causes the physical currency to be removed from circulation in the fiat system.
Nothing is disclosed in the patent filing about the so-called central entity computer. And although the possibility of shared registration is mentioned, nothing is said about how transactions are validated. The document does not mention if the records of the central computer or the blockchain will be public. Visa's patent application indicates that users would use a digital wallet, public, and private keys to manage the digital currency. Furthermore, it suggests that the potential uses of this technology include the possibility, by central banks, to substitute fiat money in the form of banknotes for digital or cryptocurrencies with little friction. The US Congress recently considered the idea of using a digital dollar during the crisis. China has also promoted projects to migrate the economy to a digital currency system. Although the e-renminbi is still in the testing phase, tests have already been run in some regions. The international community debates whether the issuance of this currency could contribute to global inflation. Though the filing mentions the US greenback, one other article by Forbes says that the identical mechanism might be utilized to different sovereign currencies like EUR or GBP.