Visa has put an offline payment system for central bank digital currencies (CBDCs) forward in a new research paper.
CBDCs are digitalized forms of fiat currencies that could run on a blockchain, but don’t necessarily have to use distributed ledger technology. Unlike cryptocurrencies, a CBDC would likely be controlled by an apex financial entity per country where it adopted.
In order for payments to be made offline, Visa proposed a system that would use “open source technology and public key infrastructure” so transaction messages could be signed without the need to be connected to the internet. The proposal outlines a protocol that can be developed in the future—but no code for such an idea has been written yet.
The idea is that an offline payment system “creates an experience similar to physical cash,” says Visa. “But instead of paper in your wallet, it’s bits and bytes in your phone"
Most countries interested in such a technology are still in the very early stages of developing a CBDC.
Some countries are further along. The Bahamas launched the first phase of its own digital currency in October and Chinese citizens are taking part in trials of a digital yuan.