Visa Launches a New Platform to Issue Fiat-Backed Tokens

• Visa has launched the ‘Visa Tokenized Asset Platform (VTAP)’, allowing banks to issue fiat-backed tokens on blockchain networks, including Ethereum.
• VTAP allows banks to leverage blockchain-based smart contracts, streamlining processes like credit administration and enabling near-real-time settlements using fiat-backed tokens.
• Visa aims to foster interoperability across public and permissioned blockchain networks, ensuring seamless cross-chain exchanges of tokenized real-world assets.
• BBVA has been piloting VTAP in 2023, with plans to launch a live blockchain pilot by 2025, using Ethereum for token issuance and transfer.

Visa, a global leader in payments, has launched the Visa Tokenized Asset Platform (VTAP), a blockchain-based product aimed at helping financial institutions bring fiat-backed tokens to life. The move signals Visa’s ambition to blend its deep-rooted expertise in payments with the fast-evolving world of blockchain technology.

Designed to simplify the issuance and management of fiat-backed tokens, VTAP offers banks a powerful new tool for exploring blockchain-based payment infrastructures. While the solution is currently available in a sandbox environment for testing and experimentation, Visa has bold plans for a full-scale launch in 2025, with live programs dependent on the readiness of financial institutions.

Visa Eyes Blockchain’s Growing Potential

Visa’s push into blockchain is a testament to its forward-thinking approach to digital payments. With over 15,000 financial institutions and operations spanning more than 200 countries, Visa’s move to enable blockchain technology within its vast network could drive widespread adoption. VTAP provides a pathway for banks to issue tokenized deposits, stablecoins, and even experiment with blockchain-based smart contracts, giving traditional banking institutions a foothold in a rapidly evolving digital economy.

Vanessa Colella, Visa’s Global Head of Innovation and Digital Partnerships, said, “Visa has been at the forefront of digital payments for nearly sixty years, and with the introduction of VTAP, we are once again setting the pace for the industry. We’re excited to leverage our experience with tokenization to help banks integrate blockchain technologies into their operations.”

Beyond Payments: Programmability and Interoperability

The VTAP platform promises more than just bringing fiat currencies on-chain. It enables banks to harness the full potential of smart contracts—a technology that has revolutionized decentralized finance (DeFi). Through smart contracts, banks can automate processes such as complex credit administration, conditional payments, and settlements in near-real-time.

Moreover, Visa envisions VTAP fostering interoperability across various blockchain ecosystems. Financial institutions will be able to integrate with both permissioned and public blockchain networks, paving the way for cross-chain asset transfers and new possibilities in decentralized finance. Visa’s focus on interoperability is crucial in ensuring that tokenized real-world assets—whether commodities, treasuries, or other financial products—can be exchanged seamlessly across different blockchain networks.

BBVA Leading the Charge in Pilot Testing

Spanish banking giant BBVA has already joined forces with Visa to test VTAP. BBVA has been exploring the issuance, transfer, and redemption of bank tokens on a testnet blockchain, utilizing the VTAP sandbox throughout 2023. The goal is to move towards a live pilot with select customers in 2025, likely on the public Ethereum blockchain. Francisco Maroto, Head of Blockchain and Digital Assets at BBVA, noted the significance of the partnership, stating, “This collaboration marks a significant milestone in our exploration of the potential of blockchain technology and will ultimately help enable us to broaden our banking services.”

Visa’s foray into tokenized assets has implications far beyond traditional banking services. As blockchain ecosystems grow, so does the need for secure, compliant, and interoperable solutions. Visa’s commitment to working with fintechs and financial institutions will play a critical role in shaping the future of tokenized assets and their potential to reshape the world of finance.

Shaping the Future of Payments

Visa’s launch of VTAP is not just a move to innovate its product offerings—it’s a strategic play to position itself as a leader in blockchain-enabled financial services. By bringing fiat-backed tokens to blockchain networks, Visa is betting that traditional financial institutions will soon rely on tokenization to expand their services and bring efficiency to age-old processes.

As financial institutions look for ways to integrate blockchain technology without compromising on regulatory and security standards, Visa’s new platform could become the go-to solution for bridging the gap between the legacy financial system and the decentralized future.

Visa’s roadmap for VTAP, which includes full live programs by 2025, positions it as a central player in the emerging blockchain ecosystem—where traditional banks and DeFi protocols increasingly intersect.

Read Also: Visa Advancing Its Cryptocurrency And NFT Capabilities To Build The Next Generation Payment Network