The asset tokenization platform of payment giant Visa is helping traditional banks issue digital legal currencies on Ethereum. It has currently cooperated with Spanish BBVA Bank and entered the experimental stage. It is expected to launch a pilot on Ethereum in 2025.
Visa attempts to use stablecoins to settle tokenized goods in real time
The Visa Tokenized Asset Platform (VTAP) will assist banks in developing fiat-backed stablecoins to help digitize and automate existing processes.
It would allow banks to use Visa’s new platform to buy tokenized commodities or bonds with the stablecoin, with the goal of near-real-time settlement. Spanish bank BBVA is one of the first financial institutions to use VTAP, with the bank expected to launch testing in 2025.
Visa is also working with the Hong Kong Monetary Authority on a similar business, and their experiment has entered the second phase. Their e-HKD initiative aims to explore the use of tokenized deposits for cross-border settlement of tokenized securities.
(The second phase of Hong Kong’s digital Hong Kong dollar e-HKD project is launched, and test cases are being tested with a number of financial institutions)
Visa’s crypto division drives “financial system modernization”
Visa’s crypto division is led by Cuy Sheffield, who founded Pomona Ventures while studying sociology at Pomona College in California to encourage the entrepreneurial ambitions of students at the college. Cuy Sheffield is also a blockchain enthusiast. What motivated this experiment was the realization that banks could modernize the financial system if they offered fiat-backed tokens and participated in on-chain capital markets.
In fact, Visa is not new to the blockchain space, they have already processed USDC settlements on Ethereum as early as March 2021. In addition, this month Visa also became a CBDC pilot project partner of the Brazilian Central Bank. The concept of a shared blockchain ledger coincides with Visa’s core business of payments, so it makes sense for them to experiment with blockchain technology. It’s just been three years since the last Ethereum stablecoin settlement experiment, which is probably as slow as a bull in the ever-changing blockchain world.
This article Visa provides bank stablecoin issuance services to connect with the future tokenized asset market. First appeared on Chain News ABMedia.
