American multinational financial services corporation, Visa, is inviting lenders to test its interbank transfer system that sends money over a blockchain.

Also read: Shopawl Now Accepting Bitcoin for eBay Orders 

Visa’s New Blockchain Project

Hendrik Kleinsmiede, co-founder of Visa’s innovation hub, Visa Europe Collab, said in the announcement that the project is designed to “reduce the friction of domestic and cross-border transfers between banks.” Aiming to remove credit risk, cut costs, speed up settlement times and more, Visa’s blockchain program is being created to send money between banks, both domestically and internationally.

Kleinsmiede also said that the aim is for Visa’s “proof of concept” to be completed within 100 days, the Financial Times reported. By that time, he expected to have found banks willing to send money between each other using the blockchain technology.

Partnership with BTL Group

For this proof of concept, Visa has teamed up with digital payments startup BTL Group. The partnership originated 18 months ago to adapt blockchain technology for Visa’s interbank payments.

Kleinsmiede said:

“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.”

BTL’s main product, Interbit, is a multi-industry platform with compliance built-in that was designed to make smart contracts and other benefits of blockchains accessible to financial institutions. Kleinsmiede confirmed that the interbank settlement platform Interbit is being used in the Visa collaboration.

Smart Contracts

This project uses smart contracts to handle much of the regulatory and compliance requirements of interbank transfers. Using the new technology, they plan to make cross-border transfers simultaneous, reduce the counterparty risk.

The arrangement ensures fairness and security previously unavailable in interbank transfers. BTL founder Guy Halford-Thomson said of the technology, “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.”

What do you think of this blockchain project? Let us know in the comment section below.

Images courtesy of Visa, BTL, Valeri Potapova / Shutterstock.com.

Tags in this story

Interbit, lenders, Proof of Concept, VISA, visa europe collab

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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.