Visa to Develop Platform for Banks to Test Fiat-Backed Blockchain Tokens

Visa has announced the launch of the Visa Tokenized Asset Platform (VTAP), aiming to assist banks and financial institutions in exploring the use of tokenized assets on blockchains. Tokenization is a process that converts real-world assets, such as money, into digital tokens that can be used on blockchain networks. This technology could allow banks to issue fiat-backed tokens, representing traditional money, on blockchain systems, enabling them to engage in digital financial markets.

Visa’s VTAP will provide banks with the ability to test and experiment with these tokens, offering a way to make transactions faster and more efficient. The company plans to conduct its first pilot on the Ethereum blockchain in 2025, working with a select group of customers. Ethereum is one of the most popular blockchain networks and supports smart contracts—self-executing programs that handle transactions when certain conditions are met.

This initiative aligns with Visa’s past work in the digital currency space. The company has previously collaborated with HSBC and Hang Seng Bank on similar projects in Hong Kong. The pilot projects highlighted enhanced privacy and security in transactions and showcased potential applications of tokenized assets and programmable finance.

Visa has been active in the token economy and stablecoin space. Earlier in September, Ether.fi launched a Visa-enabled credit card and wallet app, allowing users to access fiat credit using crypto as collateral.

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