Visa files patent for cryptocurrency system to replace money

Visa International has filed a patent application for the cryptocurrency system to replace physical currency. The system, which uses both central and commercial banks, relies on a private blockchain to improve the payments ecosystem.

Visa cryptocurrency patent filing

United States Patent and Trademark Office (USPTO) published Thursday a patent application entitled "digital fiat money" filed by Visa International Service Association on November 8, 2019.

The case concerns a cryptocurrency system linked to a trust that uses "a licensed and private distributed registry platform". It describes a central computer, its responsibilities and the key roles of the system: central entities, validation entities, rescue entities and users. "A central entity can be a central bank, which regulates the money supply," details the document. Validation entities "are blockchain nodes, which can be peers like banks". Entities that exchange "may accept physical currency for digital fiat money", such as an ATM or a bank branch.

The central entity's computer generates digital currency which is registered in a blockchain and "can determine that a particular unit of digital currency is added to or removed from the blockchain". According to the summary of the presentation:

The central entity's computer causes physical money to be removed from circulation in a fiat money system.

The presentation further explains that the payment ecosystem can become 100% digital and that "money can be withdrawn from the markets without friction" to improve the payment ecosystem. "Users can have a digital currency with the same denomination as the local physical currency."

He also notes that once digital fiat money is issued, "a user or a bank can transfer digital money from one wallet to another or store digital money on a smart card and transfer the card to chip to another entity ".

A consensus mechanism for the system blockchain was not chosen. "The consensus mechanism can vary depending on the protocol implemented. Some examples of consensual mechanisms … are proof of the game, fault tolerant Byzantine algorithms and fault tolerant algorithms", detailed the articles. You can find the articles here

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A spokesperson for Visa was quoted by Forbes on Thursday: "Each year we seek patents for hundreds of new ideas … Although not all patents result in new products or features, Visa respects intellectual property and we are actively working to protect our ecosystem, our innovations and the Visa brand. "Commenting on Visa's cryptocurrency patent filing, lawyer Jake Chervinsky tweeted:

You cannot patent something that you have not invented or that is not new, so the Visa patent application must be so limited that even if it is granted, it will not be very useful even if it is enforceable. Fund holders will not be able to use patent law to stop the cryptography industry.

Other companies have attempted to patent various cryptocurrency systems. For example, recently the World Intellectual Property Organization granted Microsoft an international patent for a cryptocurrency system that uses bodily activity data.

What do you think of filing the Visa cryptographic patent? Let us know in the comment section.

Image credits: Shutterstock, Pixabay, Wiki Commons, USPTO

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