Gradually the payment industry begins to integrate new technologies based on cryptoassets. Using blockchain technology, Visa is developing a payment channel aimed at stablecoins.
The “Layer 2” system will function as a parallel network for completing transactions with various stablecoins. In addition to this class of digital assets, Visa’s novelty will be integrated with central bank currencies, also known as CBDCs.
Through “Layer 2”, Visa is working with a system of interoperability between blockchain networks that issue stablecoins, and in the future, CBDCs. In addition, the Visa network payment channel will also feature integration with digital wallets that store cryptoassets.
According to the project, layer 2 support will offer a connection and conversion between stablecoins with the pegged price to various assets. Called the “universal payment channel hub”, transactions through Visa’s payment channel will take place on a separate blockchain.
Visa’s layer 2 will function similarly to the Lightning Network, considered a second layer of the bitcoin (BTC) blockchain network. With transactions being settled from smart contracts, the payment channel will use a Hash Time-Locked Contract (HTLC), where assets are locked according to the time set for transaction settlement.