Payment giant Visa is developing a new tokenisation platform to help banks issue fiat-backed tokens. The Visa Tokenised Asset Platform (VTAP) aims to enable the trading of real-world assets (RWAs) via smart contracts on the Ethereum blockchain.
By 2025, the Spanish bank BBVA is expected to launch the first live pilot on the platform, according to a report by Coindesk. Financial institutions will be able to buy tokenised real-world assets, such as commodities or bonds, in the form of tokens. Transactions will be settled in near real-time over the Ethereum network. Cross-border money transfers are also a key focus of the platform.
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Visa embraces blockchain technology
Tokenisation refers to the digital representation of an asset on the blockchain. This process offers a significant increase in efficiency and broader access to financial services. Visa's tokenisation platform aims to bridge the gap between traditional finance and the emerging world of blockchain. The use cases for VTAP are diverse, ranging from real-time money transfers between bank customers and interbank transfers using central bank digital currencies (CBDCs) to cross-border transactions for multinational corporations.
By providing a standardised framework for issuing and managing tokens, Visa aims to reduce the fragmented nature of the ecosystem. The payments giant has announced a partnership with XP, one of Brazil's largest independent brokers, for a CBDC initiative. Visa is also working with HSBC and Hang Seng Bank on digital currency pilots in Hong Kong.
Not the first project
The tokenisation platform is not Visa's first blockchain project. The payment giant was a founding member of Facebook's now-defunct Libra stablecoin (later "Diem") in 2018. Despite the project's failure, Visa has continued to experiment with stablecoins. A pilot project with USDC on the Ethereum blockchain followed in 2021, and last year the company expanded to the Solana network.
“We see increasing demand from consumers across the world to be able to access, hold and use digital currencies and we’re seeing demand from our clients to be able to build products that provide that access for consumers.” - Cuy Sheffield, Head of Crypto at Visa.
