Visa (NYSE: V), a global leader in digital payments, is helping to bridge existing fiat currencies with blockchains through the Visa Tokenized Asset Platform (VTAP), a new product designed to help financial institutions issue and manage fiat-backed tokens on blockchain networks. The VTAP solution is available on the Visa Developer Platform for participating financial institution partners, to create and experiment with their own fiat-backed tokens in a VTAP sandbox.
Visa has a global network of more than 15,000 financial institutions and helps facilitate seamless transactions of fiat currencies across more than 200 countries and territories. Now, Visa is applying its expertise in new technologies, such as smart contracts, to enable banks to issue and transfer fiat-backed tokens over blockchain networks.
“Visa has been at the forefront of digital payments for nearly sixty years, and with the introduction of VTAP, we are once again setting the pace for the industry,” said Vanessa Colella, Global Head of Innovation and Digital Partnerships, Visa. “We’re excited to leverage our experience with tokenization to help banks integrate blockchain technologies into their operations.”
Benefits of VTAP
VTAP is a cutting-edge solution developed by Visa’s in-house blockchain experts. The platform is a b2b solution designed to enable banks to bring fiat currencies onchain in a safe, seamless, and efficient manner. Key benefits include:
- Easy integration: VTAP provides a platform for banks to mint, burn and transfer fiat-backed tokens, such as tokenized deposits and stablecoins, and experiment with use cases. This is available in a test environment with plans to support live programs in 2025 and when participating banks are ready to launch with end customers. VTAP requires minimal technical integration, as participating banks can access the complete suite of VTAP services via APIs designed to help enhance existing financial infrastructure to be always on and more efficient.
- Programmability: VTAP is designed to enable banks to use their fiat-backed tokens within smart contracts. This could help digitize and automate existing workflows and power the future exchange of new types of real-world assets. For example, a bank could automate processes like administering complex lines of credit using smart contracts and use fiat-backed tokens to release payments when payment terms are met. A bank could also enable their customers to use a fiat-backed token to purchase tokenized commodities or tokenized treasuries with near-real time settlement onchain.
- Interoperability: There is a growing ecosystem where tokenized real-world assets are being issued across multiple permissioned and public blockchain networks. Visa’s vision is to enable interoperability across different blockchains for banks utilizing the VTAP platform. With a single API connection to VTAP, in the future, banks can enable multiple use cases and interact with partners and clients on both permissioned and public blockchains. To support the broad ecosystem adoption of tokenized assets, Visa is committed to enabling safe and secure cross-chain exchanges of tokenized real world assets using fiat-backed tokens.
Partnering for the future
BBVA has been working in the VTAP sandbox throughout this year and has been testing core VTAP sandbox functionalities including the issuance, transfer and redemption of a bank token on a testnet blockchain, as well as interactions of the token with smart contracts with the goal of launching an initial live pilot with select customers in 2025 on the public Ethereum blockchain.
“We are proud to continue spearheading the exploration of tokenized solutions with Visa through its VTAP platform,” said Francisco Maroto, Head of Blockchain and Digital Assets, BBVA. “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.”
Visa is committed to working with financial institutions and fintechs to develop standards and capabilities that can enable the growth of these new payment flows in a secure, reliable, and compliant manner.