Visa to test blockchain system for international money transfers
Visa has a new pilot project in Europe designed to test how blockchain technology could be used in cross-border money transfers.
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The pilot is taking place through Visa Europe Collab, Visa's London-based innovation hub, in cooperation with Canadian blockchain startup BTL Group.
Visa plans to use BTL's interbank settlement platform Interbit to see whether blockchain can reduce costs, settlement times, and credit risks associated with international transfers between banks.
"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," wrote Hendrik Kleinsmiede, co-founder of Visa Europe Collab, in a blog post.
Blockchain, best known as the technology behind bitcoin, is a distributed, encrypted database architecture that is considered immune from tampering. A blockchain logs all transactions on a bitcoin network and stores them in blocks.
Visa expects this proof-of-concept project to wrap up within 100 days, but first it's inviting "a small number of European banks" to participate.
Visa has been one of the more avid proponents of blockchain usage in financial services. The world's largest payments network previously announced plans to expand its team of engineers at its blockchain-focused technology tech lab in India.