Visa has revealed a new platform aimed at assisting banks in issuing and managing fiat-backed tokens on blockchain systems, with BBVA slated to pilot the platform by 2025.
The global payment giant Visa has introduced a blockchain-based solution to enable financial institutions to adopt fiat-backed tokens, seeking to merge conventional banking with blockchain advancements.
In an Oct. 3 press release, Visa announced the creation of the Visa Tokenized Asset Platform, which will allow financial institutions to mint, burn, and transfer tokens tied to fiat currencies, including stablecoins. BBVA, a Spanish banking powerhouse, is poised to pilot this technology on the public Ethereum (ETH) blockchain in 2025.
According to Visa, the VTAP solution seamlessly integrates with existing banking frameworks through APIs, permitting banks to investigate tokenization applications within a sandbox setting. The platform’s programmability also empowers financial institutions to automate tasks, such as “managing intricate lines of credit via smart contracts and utilizing fiat-backed tokens to facilitate payments when specified conditions are fulfilled.”
“We’re eager to leverage our expertise in tokenization to assist banks in incorporating blockchain technologies into their operations.”
Vanessa Colella, global head of innovation and digital partnerships, Visa
According to the press release, BBVA has been evaluating the platform throughout 2024, centering on token creation, transfer, and redemption in testnet environments. However, the exact timeline for BBVA’s pilot of the platform remains uncertain. Visa has indicated that its platform is built to offer interoperability across various blockchain networks, although it is not clear which additional networks may receive support.
Visa expresses concerns over stablecoin adoption
Back in May, Visa released a study questioning the notion that transaction volumes for stablecoins are nearing those of traditional payment networks. Cuy Sheffield, Visa’s head of crypto, highlighted that much of the stablecoin activity is fueled by automated bot transactions rather than authentic usage.
These findings ignited discussions, with some industry stakeholders challenging Visa’s approach. While Visa remains cautious regarding stablecoin adoption, others contend that stablecoins are still in their early phases and should not be disregarded based on the existing data.
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