Visa Pilots Confidential Blockchain Stablecoin Transactions Using Brale and Canton Network
In collaboration with Brale and Canton, Visa is piloting confidential stablecoin settlement mechanisms on blockchain infrastructure, examining how financial institutions can leverage distributed ledger technology while maintaining transaction privacy.
Visa has launched a proof of concept to determine if blockchain networks equipped with privacy features can facilitate institutional stablecoin settlements while keeping confidential transaction information protected. The trial involves stablecoin infrastructure provider Brale and the Canton Network, a permissioned distributed ledger supported by leading Wall Street institutions.
Unveiled on Thursday, the experimental program leverages SBC, a stablecoin backed by the US dollar and issued by Brale, to replicate institutional payment scenarios on Canton while Visa assesses the potential of adding SBC to its settlement program as an additional stablecoin alternative.
This effort builds upon Visa's previous trials involving stablecoins for settlement purposes on public blockchain networks, which launched in 2021 with USDC settlement on Ethereum. The current focus, however, targets financial institutions and market infrastructure operators seeking blockchain efficiency without revealing counterparties, trading positions, or transaction flows on publicly accessible ledgers.
The development emerges as regulators and industry experts anticipate a significant transformation in payment stablecoin utilization.
According to a Thursday report from S&P Global Ratings, worldwide stablecoin issuance has crossed the $300 billion threshold across multiple currencies, though the majority of demand remains connected to cryptocurrency trading activities.
Payment stablecoins in the United States that adhere to the Guiding and Establishing National Innovation in US Stablecoins (GENIUS) Act are expected to grow into merchant remittances and specific commercial payment categories following regulatory finalization, the report noted, identifying cross-border payments as among the most viable near-term applications. Nevertheless, these transaction types presently account for just a small, albeit increasing, portion of worldwide international payment activity.
Canton network at center of institutional privacy push
Developed by Digital Asset, Canton links permissioned blockchain applications managed by major institutions such as JPMorgan, Goldman Sachs, BNP Paribas and the Depository Trust & Clearing Corporation.
In contrast to public blockchain networks, Canton operates with a design ensuring that only parties involved in transactions and regulators with proper authorization can access specific transaction details, while simultaneously enabling atomic settlement capabilities across tokenized assets, cash-equivalent instruments and additional financial agreements.
According to the announcement from Visa and Brale, the proof of concept aims to evaluate Canton's privacy framework and its capacity to enable accelerated, more programmable settlement mechanisms while permitting financial institutions and payment service providers to maintain stringent oversight of sensitive transaction and settlement information visibility.
For banking institutions, the implications extend well beyond mere technological testing. According to S&P Global, stablecoins could eventually pose a risk to segments of banks' payment revenue streams and redirect funding away from insured retail deposits toward more concentrated wholesale deposit balances over the long term.
Financial institutions that choose to issue their own stablecoins or tokenized deposits may simultaneously access new revenue and funding channels, prompting major banking organizations to experiment with privacy-protecting settlement networks capable of supporting GENIUS-compliant payment stablecoins and tokenized deposit products, the report indicated.
Cointelegraph reached out to Visa, Brale and Digital Asset, but had not received a response by publication.