Visa has announced a new platform to help banks issue and manage fiat-backed tokens on blockchain networks, with BBVA set to pilot the platform by 2025.
Global payments network Visa has unveiled a blockchain-based platform to help financial institutions integrate fiat currency-backed tokens, aiming to bridge traditional banking technology and blockchain technology.
In an October 3 press release, Visa said the Visa Tokenized Asset Platform will enable financial institutions to mint, burn and transfer tokens backed by fiat currencies, such as stablecoins, with BBVA, a Spanish multinational banking giant, ready to do so. pilot technology on the public Ethereum (ETH) blockchain in 2025.
Visa says the VTAP solution integrates with existing banking infrastructure via APIs, allowing banks to explore tokenization use cases in a sandbox environment. The platform’s programmability also allows financial institutions to automate processes, such as “administering complex credit lines using smart contracts and using fiat-backed tokens to make payments when payment conditions are respected.
“We are excited to leverage our experience in tokenization to help banks integrate blockchain technologies into their operations.”
Vanessa Colella, Global Head of Innovation and Digital Partnerships, Visa
According to the press release, BBVA tested the platform throughout 2024, focusing on the issuance, transfer and redemption of tokens on testnet blockchains. However, it is unclear when exactly the Spanish giant plans to pilot the platform. Visa says its platform is designed to support interoperability across multiple blockchain networks, although it is unclear which other networks are likely to be supported.
Visa raises concerns over stablecoin adoption
Earlier in May, Visa unveiled a study questioning the assumption that stablecoin transactions are approaching the volumes seen in traditional payment networks. Cuy Sheffield, head of crypto at Visa, noted that a significant portion of stablecoin activity is driven by automated bot transactions, rather than actual usage.
The results, however, sparked debate, with some in the industry questioning Visa’s methodology. While Visa remains cautious about stablecoin adoption, others argue that stablecoins are still in their infancy and should not be dismissed based on current data.
