Visa looks at offline payments for digital currencies

A news report in Finextra reveals that Visa has published a technical paper on “offline point-to-point payments between two devices.” The card company says it would be a means for central banks “to replicate the physical exchange of cash using digital currencies.”

This comes in the wake of a slew of central banks considering the issuance of a CBDC. Any design of these will need to include a framework for the exchange of digital currencies without either person involved having to have an Internet connection.

The Visa protocol outlines a method whereby digital currencies can be directly downloaded to a personal device, and stored in secure hardware embedded in the device, but managed by one of the wallet providers. In this way CBDC can be sent from one device to another without a bank as intermediary, or any other payment networks.

Visa says in its technical paper: “To facilitate the secure issuance and transfer of CBDC, we envision a CBDC design under a two-tier hierarchical trust infrastructure, which is implemented using public-key cryptography with the central bank as the root certificate authority for generating digital signatures, and other financial institutions as intermediate certificate authorities. One important design feature for CBDC that can be developed under this hierarchical trust infrastructure is an offline capability to create secure point-to-point offline payments through the use of authorized hardware. An offline capability for CBDC as digital cash can create a resilient payment system for consumers and businesses to transact in any situation.”

Visa envisages that this system would be ideal in places where Internet connections are poor and/or intermittent, and where full access is only available at places like Internet cafes.