Visa Supports Banks in Testing Tokenized Assets with New Blockchain Platform

Sentiment Status: Positive

Tokens issued using VTAP will be fiat-backed and powered by smart contracts that automate transactions.

Visa, the global payments giant, is launching a new initiative to help banks test tokenized assets and smart contracts through its Visa Tokenized Asset Platform (VTAP).

Visa Launches Tokenized Asset Platform (VTAP)

Visa introduced the Visa Tokenized Asset Platform (VTAP), designed for banks and financial institutions to issue fiat-backed tokens on blockchain networks such as Ethereum. Furthermore, Visa helps banks digitize real-world assets such as commodities, bonds, and real estate, enabling smoother, faster, and more secure transactions. One of the first banks to use VTAP is Spain’s Banco Bilbao Vizcaya Argentaria (BBVA), which has already begun testing tokenized assets using Visa’s sandbox environment.

VTAP opens up possibilities for banks to create their own regulated tokens. As Cuy Sheffield, Visa’s Crypto Head, emphasized, tokenization offers banks notable opportunities to engage in on-chain capital markets.

Fiat-Backed Tokens on Ethereum

The tokens issued using VTAP will be fiat-backed and powered by smart contracts that automate transactions. This will allow near real-time settlements, reducing delays often plagued by traditional banking processes. BBVA’s pilot on the Ethereum blockchain is slated for 2025.

Larry Fink, CEO of BlackRock, has advocated for tokenizing financial assets, believing it represents the next step in the evolution of finance.

Partnerships and Industry Collaboration

In the past, Visa has already been involved in Central Bank Digital Currency initiatives, working with institutions like the Hong Kong Monetary Authority and Brazil’s central bank. The platform also formed a partnership with Singapore’s dtcpay to expand its crypto payments network.

As more banks begin experimenting with tokenized assets, it could lead to a financial revolution. Visa’s VTAP provides the infrastructure and support needed to make that transition seamless and secure. The platform allows banks to integrate tokenized assets into their operations while maintaining regulatory compliance and minimizing risk.

With initiatives like VTAP, the possibility of a more decentralized, digital financial system is becoming real.