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 payment network Visa has unveiled a blockchain-based platform to assist financial institutions in integrating fiat-backed tokens, aiming to bridge traditional banking and blockchain technology.

In an Oct. 3 press release, Visa introduced the Visa Tokenized Asset Platform (VTAP). This innovative solution will enable financial institutions to mint, burn, and transfer tokens backed by fiat currencies, such as stablecoins. BBVA, a Spanish multinational banking giant, is set to pilot this technology on the public Ethereum blockchain in 2025.

How VTAP Works

Visa states that the VTAP solution integrates with existing banking infrastructure via APIs. This integration allows banks to explore tokenization use cases within a sandbox environment. The platform’s programmability also enables financial institutions to automate processes, such as administering complex lines of credit using smart contracts and using fiat-backed tokens to release payments when payment terms are met.

“We’re excited to leverage our experience with tokenization to help banks integrate blockchain technologies into their operations.”

Vanessa Colella, global head of innovation and digital partnerships at Visa, expressed enthusiasm about the new platform.

BBVA’s Involvement

According to the press release, BBVA has been testing the platform throughout 2024. The focus has been on token issuance, transfer, and redemption on testnet blockchains. However, the exact timeline for when BBVA will fully pilot the platform remains unclear. Visa aims for its platform to support interoperability across multiple blockchain networks, although additional networks for support have yet to be specified.

Visa’s Study on Stablecoin Adoption

Earlier in May, Visa published a study challenging the assumption that stablecoin transactions are approaching volumes seen in traditional payment networks. Cuy Sheffield, Visa’s head of crypto, noted that a significant portion of stablecoin activity is driven by automated bot transactions rather than genuine usage.

The findings sparked debate within the industry, with some participants questioning Visa’s methodology. While Visa remains cautious about stablecoin adoption, others argue that stablecoins are still in a nascent stage and should not be dismissed based on current data.

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