Visa Introduces the Visa Tokenized Asset Platform

Rhea-AI Summary

Visa (NYSE: V) has introduced the Visa Tokenized Asset Platform (VTAP), a new product designed to help financial institutions issue and manage fiat-backed tokens on blockchain networks. VTAP offers easy integration, programmability, and interoperability for banks to mint, burn, and transfer fiat-backed tokens. The platform is available on the Visa Developer Platform for participating financial institutions to experiment in a sandbox environment.

Key benefits of VTAP include minimal technical integration, the ability to use fiat-backed tokens within smart contracts, and potential interoperability across different blockchains. BBVA has been testing VTAP sandbox functionalities and aims to launch an initial live pilot with select customers in 2025 on the public Ethereum blockchain.

Visa's goal is to enable safe and secure cross-chain exchanges of tokenized real-world assets using fiat-backed tokens, bridging existing fiat currencies with blockchain technology.

Positive

• Introduction of VTAP, a new product for banks to issue fiat-backed tokens on blockchain networks
• Potential for banks to automate processes and enable new financial solutions using smart contracts
• Planned support for live programs in 2025
• Partnership with BBVA for testing and potential pilot launch in 2025

Negative

• None.

Insights

Financial Technology Analyst

Visa's introduction of the Visa Tokenized Asset Platform (VTAP) marks a significant step in bridging traditional finance with blockchain technology. This move positions Visa at the forefront of the evolving digital asset landscape, potentially opening new revenue streams and enhancing its competitive edge. VTAP's key features - easy integration, programmability and interoperability - address important pain points in the adoption of blockchain technology by financial institutions. The partnership with BBVA for live pilots in 2025 demonstrates real-world application potential. However, the long timeline to implementation suggests cautious optimism is warranted. While this innovation could drive long-term growth, immediate financial impact may be Investors should monitor adoption rates and regulatory developments in this space, as they will be critical to VTAP's success and Visa's future positioning in the evolving payments ecosystem.

Blockchain Strategist

VTAP represents a strategic move by Visa to capitalize on the growing intersection of traditional finance and blockchain technology. By enabling banks to issue fiat-backed tokens, Visa is positioning itself as a key infrastructure provider in the tokenized economy. The platform's focus on interoperability across different blockchains is particularly noteworthy, as it addresses a major challenge in the fragmented blockchain landscape. This could potentially make Visa a central player in facilitating cross-chain transactions of tokenized assets. The emphasis on smart contract functionality also opens up possibilities for innovative financial products and services. However, the 2025 timeline for live pilots indicates that significant technical and regulatory hurdles remain. Investors should view this as a long-term strategic initiative rather than an immediate revenue driver, with its full impact likely to materialize over several years.

Visa Tokenized Asset Platform (VTAP) is a new product that helps banks issue fiat-backed tokens. BBVA will use VTAP to create tokens on the public Ethereum blockchain with expected live pilots in 2025.

SAN FRANCISCO--(BUSINESS WIRE)-- 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.

About Visa

Visa (NYSE: V) is a world leader in digital payments, facilitating transactions between consumers, merchants, financial institutions and government entities across more than 200 countries and territories. Our mission is to connect the world through the most innovative, convenient, reliable and secure payments network, enabling individuals, businesses and economies to thrive. We believe that economies that include everyone everywhere, uplift everyone everywhere and see access as foundational to the future of money movement. Learn more at Visa.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241003550660/en/

Jackie Dresch - jdresch@visa.com

Source: Visa Inc.

FAQ

What is the Visa Tokenized Asset Platform (VTAP) and when will it be available?

VTAP is a new product by Visa (NYSE: V) that helps financial institutions issue and manage fiat-backed tokens on blockchain networks. It's currently available in a sandbox environment, with plans to support live programs in 2025.

Which bank is partnering with Visa (V) to test VTAP and when is the pilot expected?

BBVA is partnering with Visa to test VTAP. They aim to launch an initial live pilot with select customers in 2025 on the public Ethereum blockchain.

What are the key benefits of Visa's (V) VTAP for financial institutions?

Key benefits of VTAP include easy integration through APIs, programmability for use with smart contracts, and potential interoperability across different blockchain networks.

How does Visa (V) plan to enable cross-chain exchanges of tokenized assets?

Visa is committed to enabling safe and secure cross-chain exchanges of tokenized real-world assets using fiat-backed tokens through the VTAP platform.