Key Points
Visa has revealed a new platform to facilitate banks in issuing and managing tokens backed by fiat currencies on blockchain networks.
BBVA, a Spanish multinational bank, is expected to test the platform by 2025.
The platform, known as the Visa Tokenized Asset Platform, is designed to bridge the gap between traditional banking and blockchain technology.
The Visa Tokenized Asset Platform
On October 3, Visa issued a press release.
This release stated that the Visa Tokenized Asset Platform will allow financial institutions to mint, burn, and transfer tokens backed by fiat currencies like stablecoins.
BBVA is set to pilot this technology on the public Ethereum (ETH) blockchain in 2025.
The VTAP solution is designed to integrate with existing banking infrastructure via APIs.
This integration allows banks to explore tokenization use cases within a sandbox environment.
The platform’s programmability also allows financial institutions to automate processes such as administering complex lines of credit using smart contracts and using fiat-backed tokens to release payments when payment terms are met.
Vanessa Colella, global head of innovation and digital partnerships at Visa, expressed her excitement about leveraging Visa’s experience with tokenization to assist banks in integrating blockchain technologies into their operations.
According to the press release, BBVA has been testing the platform throughout 2024.
The focus of these tests has been on token issuance, transfer, and redemption on testnet blockchains.
However, it remains unclear when BBVA plans to officially pilot the platform.
Visa states that its platform is designed to support interoperability across multiple blockchain networks, but it has not specified which other networks will be supported.
Visa has expressed concerns about the adoption of stablecoins.
In May, Visa published a study that challenged the assumption that stablecoin transactions are nearing the volumes seen in traditional payment networks.
Cuy Sheffield, Visa’s head of crypto, noted that a significant portion of stablecoin activity is driven by automated bot transactions, rather than genuine usage.
The findings sparked a debate, with some industry participants questioning Visa’s methodology.
While Visa remains cautious about the adoption of stablecoins, others argue that stablecoins are still in an early stage and should not be dismissed based on current data.