Visa has made a big move into blockchain with its Visa Tokenized Asset Platform (VTAP) launch. This platform aims to help banks issue and test fiat-backed tokens, setting a global standard for financial institutions exploring blockchain technology. By doing so, Visa is positioning itself at the forefront of asset tokenisation companies, significantly impacting the growing landscape of tokenized assets platforms. According to Cuy Sheffield, Visa’s crypto head, this new platform creates a wealth of opportunities for banks to issue their own fiat-backed tokens, providing customers with access to on-chain capital markets. This move could reshape how banks engage with the tokenisation of assets, enabling them to move money quickly and securely through blockchain-based payment systems.
Visa is no stranger to central bank digital currency (CBDC) initiatives. They’ve already partnered with the Hong Kong Monetary Authority and Brazil’s central bank to roll out blockchain projects. For example, in Brazil, Visa is part of a pilot project called Drex, collaborating with XP, one of Brazil’s largest brokers. This partnership is a step forward in creating asset-backed tokens that can be used within financial systems worldwide.
In Spain, Banco Bilbao Vizcaya Argentaria (BBVA) has been testing Visa’s platform in a sandbox environment on a test blockchain. By 2025, Visa plans to pilot on the Ethereum blockchain, a popular choice among asset tokenization companies and digital currency companies. This test will explore various use cases such as real-time money transfers between bank clients, interbank transfers using wholesale CBDCs, and cross-border transactions for multinational businesses.
Related: Envisioning a future of central bank digital currencies
Catherine Gu, Visa’s head of CBDC and tokenised assets, pointed out the limitations of traditional payment systems, especially for global organisations that need 24/7 money mobility. Visa’s goal is to develop guidelines that will enhance interoperability among financial institutions. This will address the fragmentation issues currently hindering the transfer of tokenized assets across different countries.
Visa isn’t alone in this space. Swift, the global payments provider, has also been exploring real-world asset tokenisation. However, while Swift focusses on creating a global system for interoperability among different central bank digital currencies (CBDCs), Visa’s efforts are centred around the tokenisation of financial assets.
Swift’s platform uses Delivery-versus-Payment (DvP) and Payment-versus-Payment (PvP) models to facilitate these transactions. In contrast, Visa’s focus on digital asset tokenisation aims to provide a broader range of services, including cross-border payments and interbank transfers.
Related: Visa and Swift Team Up to Enhance Transparency
Visa’s Tokenized Asset Platform is a significant step forward for the financial industry. It not only supports the tokenisation blockchain ecosystem but also brings the potential for real-world assets on-chain, unlocking new possibilities for global digital currency use.
As more countries explore central bank digital currencies and tokenisation technology, Visa’s initiative could pave the way for other digital asset platforms and blockchain currencies to follow. The future of central digital bank currency and digital tokenisation is bright, and with Visa’s leadership, the global financial system could soon see a new era of blockchain-based payments.
By creating a global digital currency framework, Visa is not just focussing on the present but also preparing for a future where digital currencies and blockchain technology dominate the financial world. Whether you’re interested in ripple cross-border payments, new alt coins, or simply keeping up with US digital currency news, Visa’s move is one to watch closely.
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