Visa rolls out a platform that will help banks issue fiat-backed cryptos

Visa recently unveiled a new platform for banks, dedicated to helping financial institutions issue and manage fiat-backed tokens such as stablecoins on blockchain networks.

The platform is known as the Visa Tokenized Asset Platform (VTAP), and it allows participating financial institution partners to perform a variety of actions involving fiat-backed tokens. That includes minting, burning, as well as transferring them. These activities will be based on both stablecoins and tokenized deposits.

On top of that, participants will also have the chance to experiment with various use cases involving these tokens, in an attempt to discover a new way of using them or improving existing services by including blockchain-based assets.

The platform is currently out in a test environment, and Visa said that it intends to support live programs in 2025, once participating banks decide they are ready to offer their services to end users.

What Can The Platform Offer To Participating Banks?

The new product was designed to allow the banks to use their own tokens that support smart contracts. Visa gave an example by saying that a bank could use this technology to automate the administering of complex lines of credit through smart contract usage. They could also use fiat-backed tokens to release payments when certain terms are met.

Visa further said that the platform will focus on interoperability across different chains. With APIs’ connection to VTAP, banks will be able to enable multiple use cases or interact with partners and clients regardless of whether they use public or permissioned chains.

Visa’s Global Head of Innovation and Digital Partnerships, Vanessa Colella, stated that the payment giant’s team is very excited to leverage its experience with tokenization. They are prepared to use their knowledge and experience to assist banks in integrating blockchain technologies into their operations, and helping them and their services evolve.

The First Participant Joined The Sandbox

So far, the sandbox has already seen at least one bank join in and start its testing. Spanish lender BBVA started using it to test the issuance, transfer, and redemption of a bank token on a testnet chain. It also started testing how the token and smart contracts interact with one another.

Moving forward, the bank plans to launch an initial live pilot with select customers in 2025 using Ethereum’s network. Its Head of Blockchain and Digital Assets, Francisco Maroto, stated: “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 and expand the market with new financial solutions.”