Visa Launches Platform to Enable Banks to Issue Fiat-Backed Tokens on Ethereum

Payments giant Visa has announced the launch of its new Visa Tokenized Asset Platform (VTAP), designed to assist banks in issuing fiat-backed tokens on the Ethereum blockchain. This innovative platform aims to digitize and automate existing financial processes, facilitating the exchange of real-world assets (RWAs). Spanish bank BBVA is set to be one of the first institutions to pilot this technology in 2025.

Key Takeaways

• Visa introduces the Visa Tokenized Asset Platform (VTAP) to help banks issue fiat-backed tokens.

• The platform will utilize smart contracts to enhance the digitization of financial processes.

• BBVA, a Spanish bank, plans to launch a pilot program in 2025.

• Visa has a history of involvement in blockchain and digital assets, including processing cryptocurrency payments.

Overview of the Visa Tokenized Asset Platform

Visa's VTAP is designed to enable banks to create and manage fiat-backed tokens, which can be used for transactions involving RWAs such as commodities and bonds. By leveraging smart contracts, the platform aims to provide near-real-time settlement for these transactions, streamlining the process and reducing the time and costs associated with traditional banking methods.

Benefits of VTAP

1. Enhanced Efficiency: The use of smart contracts allows for automated processes, reducing the need for manual intervention.

2. Real-Time Transactions: Near-real-time settlement capabilities can significantly speed up transactions involving RWAs.

3. Broader Access: By digitizing assets, more institutions may gain access to previously illiquid markets.

BBVA's Role in the Pilot Program

BBVA is expected to be one of the first banks to utilize the VTAP, with plans to launch a live pilot in 2025. This collaboration marks a significant step for both Visa and BBVA in exploring the potential of blockchain technology in traditional banking.

Visa's Established Presence in Blockchain

Visa has been actively involved in the blockchain space for several years. In March 2021, the company began processing cryptocurrency payments using the stablecoin USDC on the Ethereum network. Additionally, Visa recently partnered with Brazil's central bank to explore the development of a central bank digital currency (CBDC).

Conclusion

The introduction of the Visa Tokenized Asset Platform represents a significant advancement in the integration of blockchain technology within the banking sector. By enabling banks to issue fiat-backed tokens, Visa is paving the way for a more efficient and accessible financial ecosystem. As institutions like BBVA prepare to pilot this technology, the potential for widespread adoption of digital assets in traditional finance continues to grow.

Sources

• Visa (V) to Assist Banks Issue Fiat-Backed Tokens on Ethereum Via New RWA Platform, CoinDesk.

• Visa (V) para Tulungan ang mga Bangko na Mag-isyu ng Fiat-Backed Token sa Ethereum Sa pamamagitan ng Bagong RWA Platform, CoinDesk.