Visa has released a product to help financial institutions issue fiat-backed tokens on blockchain networks.
The company announced Thursday (October 3) that the Visa Tokenized Asset Platform (VTAP) is available on the Visa Developer Platform to enable its banking partners “to create and experiment with their own fiat-backed tokens in a VTAP sandbox”.
This effort, Visa said in a press release provided to PYMNTS, will draw on the company’s expertise in technologies such as smart contracts to enable banks to issue and transfer tokens backed by fiat currencies on blockchain networks.
“Visa has been at the forefront of digital payments for nearly six decades, and with the introduction of VTAP, we are once again setting the tone for the industry. » Vanessa ColellaVisa’s global head of digital innovation and partnerships, said in the release.
“We are excited to leverage our experience in tokenization to help banks integrate blockchain technologies into their operations.”
According to the press release, the Spanish bank BBVA has already tested the functionality of the VTAP sandbox this year, including the issuance, transfer and redemption of a banking token on a testnet blockchain, as well as the token’s interactions with smart contracts.
The bank intends to launch a first live pilot with selected clients on the public Ethereum blockchain next year, Visa added. The advantages of VTAP include its ease of integration, programmability and interoperabilitythe release notes.
“There is a growing ecosystem where real-world tokenized assets are issued across multiple public and permissioned blockchain networks,” the company said. “Visa’s vision is to enable interoperability between different blockchains for banks using the VTAP platform.”
With an API connection to VTAP, in the future, banks will be able to enable multiple use cases and interact with their partners and customers on permissioned and public blockchains.
“To support large-scale ecosystem adoption of tokenized assets, Visa is committed to enabling safe and secure cross-chain exchanges of real-world tokenized assets using fiat-backed tokens “, adds the press release.
PYMNTS examined the role blockchain technology plays in cross-border payments in a recent conversation with Sheraz ShereManaging Director of Payments and Commerce at the Solana Foundation.
“Blockchain solutions and stablecoins, I don’t like to use the term crypto because it’s more about FinTech, they found product-market fit in cross-border payments” Shere said.
He added that one of the most notable benefits of blockchain technology is disintermediation, eliminating the need to go through multiple correspondent banks, which typically makes transactions slower and more expensive.
