Platform enables banks to issue fiat-backed tokens and explore blockchain use cases in regulated environment.
Key Takeaways
- Visa launches VTAP to help banks issue and test fiat-backed tokens on blockchains.
- BBVA is testing the platform and plans to launch a pilot on Ethereum in 2025.
Visa has introduced a new platform to assist banks in issuing and testing fiat-backed tokens, as reported by Blockworks. The Visa Tokenized Asset Platform (VTAP) aims to create global standards for interactions between financial institutions exploring blockchain technology.
“We think that creates a significant opportunity for banks to issue their own fiat-backed tokens on blockchains, do it in a regulated way and enable their customers to access and participate in these on-chain capital markets,” Cuy Sheffield, Visa’s crypto head, shared.
Visa has been involved in central bank digital currency (CBDC) pilots, including projects with the Hong Kong Monetary Authority, which recently announced its phase 2, and the Central Bank of Brazil.
In the Brazilian pilot, called Drex, Visa is participating in the pilot together with XP, one of the largest independent brokers in the country.
Experiences such as the two aforementioned have led to increased interest from commercial banks in tokenized assets.
Spain’s Banco Bilbao Vizcaya Argentaria (BBVA) has been testing the VTAP sandbox this year, focusing on token issuance, transfer, and redemption on a testnet blockchain. BBVA aims to launch an initial pilot with select customers on the Ethereum blockchain in 2025.
The platform addresses various use cases, including real-time money movement between bank clients, interbank transfers in markets with wholesale CBDCs, and cross-border transfers for multinational corporations.
“For especially multinational corporates moving money 24/7, right now the rails are very limited for them to do so,” Catherine Gu, Visa’s head of CBDC and tokenized assets, added.
Visa is working to create standards that ensure interoperability between financial institutions entering this space, addressing the current fragmentation in tokenization and smart contract approaches.
Global efforts
Notably, Gu told Blockworks that fragmentation is indeed a pain when it comes to tokenized asset transfers between financial institutions located in different jurisdictions.
Interestingly, global payments infrastructure provider Swift also announced on Sept. 11 a platform to streamline the usage of real-world assets.
Yet, the effort is not aimed at tokenizing assets but rather at creating a global rail to foster interoperability between nations’ different CBDCs and RWA.
The platform unveiled by Swift will allow asset buyers to pay and receive their assets simultaneously to simultaneously though a Delivery-versus-Payment (DvP) and Payment-versus-Payment (PvP) model.
