• T Skevington and M Bacina

VISA determined to patent digital fiat currency

Updated: May 22


A patent application filed by Visa to create a digital currency on a blockchain has been published by the United States Patent and Trademark Office (USPTO). The patent was filed on 8 November 2019 in the name of the “Visa International Service Association” based out of San Francisco, with engineers Simon J. Hurry and Alexander Pierre credited as the inventors.


The patent is for a "digital fiat currency", and describes the use of a central computer that receives unique serial numbers and denominations of a particular currency. Following verification, a “digital currency” is issued and the “removal of the underlying fiat” is recorded on a private or public blockchain. 


The patent specifically considers Ethereum as a possible network at paragraphs [0135] to [0138], but this appears to be primarily intended as an example of how the proposed digital fiat currency could be run in practice. The patent also proposed a "private permissioned distributed ledger platform for managing the digital currency" at various other points.


Most interestingly, the patent includes a broad argument for the benefit of digital currency which many have known for years, namely:

[0028] According to the exemplary embodiments discussed herein, the payment ecosystem may become entirely (e.g. 100%) digital. According to various embodiments, cash may be removed from the markets in a frictionless manner and the payment ecosystem may be improved. Users may hold digital currency with the same denomination as the local physical currency (e.g., $100 for User A in America; 200 pesos for User B in Mexico, and so forth) in order to perform transactions in a secure, fast and reliable way.
[0029] Embodiments of the present invention allow redeeming cash to digital fiat currency regulated by the central entity. Embodiments further provide a permissioned, shared, immutable transaction replicated ledger across the industry. Embodiments may record bank note serial numbers and denominations to prevent duplicate bank notes. Embodiments may ensure transaction security by storing transaction signing private keys on a chip or mobile device Secure Element (when available). Embodiments may also allow for user anonymity.

(emphasis added).


This is just the latest in Visa's long road to reconciliation with digital currencies. Like most legacy financial service providers, Visa was initially chilly toward blockchain and digital currency businesses. Since then, Visa joined, then withdrew from the Libra Association, and has since begun partnering with blockchain business from major exchanges to smaller payment service providers. While patent applications do not always lead to a commercial outcome, we look forward to finding out whether Visa will continue taking a more active role in the space.

© Michael Bacina. All rights reserved

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