VISA and blockchain-technology partner BTL will invite a select group of European banks to participate in a blockchain project that will see inter-bank payments made via transfers over the ledger.
Hot on the heels of the likes of R3, Visa will experiment its own blockchain-based payments platform with a select group of banks who will send money over a blockchain.
The proof-of-concept project will use Interbit, a cross-border blockchain remittance and settlement platform developed by industry startup BTL. Launched earlier this year, the Interbit platform is seen by Visa as the solution to “reduce cost, settlement time, credit risk, and by leveraging smart contracts to automate many of the regulation and compliance requirements of domestic and international transfers.”
BTL estimates that remittance costs can be reduced by over 80% through the Interbit platform, compared to traditional means, such as SWIFT.
Hendrik Kleinsmiede, co-founder of Visa Europe Collab, stated:
We’re now inviting a small number of European banks to participate in the project alongside us and BTL. Participating banks will be able to connect to the network and send funds to other banks in the network across multiple currencies.
The proof-of-concept project is expected to complete the banking experiment within 100 days.
Visa has made notable strides to research and develop blockchain technology with various endeavors in recent times. For instance, the world’s largest payments network revealed plans to expand its team of 750 engineers at its technology innovation lab in India. The blockchain-focused technology center is aiming at employing over 1,000 employees before end of 2017, up from 400 engineers during its August 2015 launch.
In late 2015, Visa Europe Collab partnered with Epiphyte, a blockchain-based software-as-a-solution (SaaS) provider to develop a proof-of-concept.
Earlier this year, Visa published a job posting that sought to hire a senior software engineer to join as a part of its research team to develop a “secure and scalable blockchain” network.
Through the use of smart contracts and blockchains, I believe we can create a fast, compliant and low-cost interbank payment and settlement service, with embedded regional compliance.
One of the first known instances of banks using a blockchain to exchange value came to light in early 2016 when R3 revealed an experiment with a total of 11 participating banks, across four continents. Each bank was connected to a private R3-managed ledger, underpinned by Ethereum technology while hosted on a VPN on Azure, Microsoft’s public cloud platform. The successful test ran continuously 24 hours a day for five days in total.
In February 2016, a report revealed that JP Morgan Chase, the largest bank in the United States, was discreetly testing U.S. dollar transfers between London and Tokyo with some 2,200 participating clients. JPMorgan is expected to introduce the technology for live transactions later this year.
Images from Shutterstock.