Visa Unveils Blockchain Platform to Let Banks Handle Fiat-Backed Tokens
Visa, one of the world’s leading payment companies, announced the Visa Tokenized Asset Platform that will enable banks to issue and manage fiat-backed tokens on several blockchain networks. This is a first in using blockchain for merging traditional banking with it, and BBVA, a Spanish multinational bank, intends to begin piloting the new technology by 2025.
Tokenized Asset Platform Explained
The VTAP platform lets financial institutions mint, burn, and transfer tokens against value in fiat currencies like stablecoins. It’s designed to live within the constraints of existing banking infrastructure, while APIs make it easy to integrate and provide banks with the possibility to play in a sandbox with the potential of tokenization.
One of the most striking features of VTAP is that it is programmable-for example, due to the fact that complex processes related to credit line management can be automated through smart contracts. It allows real-time token transfers as the payment terms are met, which is an innovative feature that will enhance the efficiency of financial players.
BBVA Leads in 2025 Pilot
BBVA has been testing the platform since 2024, minting, transferring, and redeeming tokens across various testnet blockchains. The pilot will launch on the public Ethereum blockchain in 2025-that’s at least a major milestone of Visa’s efforts with traditional banking.
Visa’s platform is multichain, although not yet which other blockchain networks might be added.
Debate on Stablecoin Adoption
Visa is entering the market following an internal research paper that had expressed its apprehensions over stablecoin adoption. Them said a considerable number of stablecoin transactions are driven by automated bots, which indicates very questionable real uses. However, industry commentators have cast doubt on Visa’s findings, but the development of the platform has demonstrated a cautious approach to the integration of stablecoins into mainstream financial systems.
Visa remains engaged with blockchain technologies, even as it recognizes challenges with stablecoins and tokenization.
