Visa's VTAP allows banks to explore fiat-backed tokens, enhancing blockchain interactions and facilitating RWAs exchange.
BBVA is set to pilot Visa’s VTAP in 2025, joining other banks like HSBC in advancing tokenization efforts.
Tokenization is gaining traction, with Visa leading initiatives that modernize financial systems and attract institutional interest.
Visa has introduced the Visa Tokenized Asset Platform , a sandbox designed to assist banks in issuing fiat-backed tokens and exploring their use cases. Through the creation of international standards, the project hopes to facilitate more seamless blockchain transactions for tokens issued by banks.
VTAP and smart contracts will enable banks to digitize and automate processes. Moreover, it makes trading real-world assets (RWAs) easier, such bonds and commodities. The near-real-time settlement offered by the platform is obviously advantageous to financial institutions.
https://twitter.com/TradeWithJesse/status/1838927114416103845 A New Era for Financial Institutions
As such, prominent players have already expressed interest in the platform. Notably, a live trial program for Spain's BBVA is anticipated to begin in 2025. Furthermore, in order to evaluate the platform's potential, HSBC, Hang Seng Bank, and the Central Bank of Brazil took part in pilot programs.
Visa possesses extensive experience in the domain of digital assets and blockchain technology. In 2021, the company began accepting payments using cryptocurrencies on Ethereum through the stablecoin USDC. Furthermore, Visa joined Hong Kong’s Digital Dollar program last year, emphasizing its commitment to tokenization.
Moreover, Visa's efforts in the tokenization could drive the broader adoption of blockchain-based capital markets. Significantly, central and commercial banks are increasingly viewing tokenization as a means to modernize financial systems.
This shift is fueled by the growing interest from institutions like BlackRock, whose CEO Larry Fink recently advocated for the tokenization of financial assets. Additionally, Visa’s partnerships with over 65 crypto wallet providers underscore its ambition to lead the tokenization revolution.
The Future of Tokenization in Finance
Visa Crypto Head, Cuy Sheffield, highlighted that banks could issue fiat-backed tokens, provided they adhere to regulatory standards. This regulated approach ensures customers can access blockchain-based capital markets safely.
With a market cap of $7.92 billion, the RWA sector is poised for significant growth. Visa’s VTAP offers a favorable environment for institutional players to tap into this evolving trend, driving tokenization's momentum forward. Consequently, the initiative sets the stage for banks to shape the future of blockchain-based finance.
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