Visa to develop a platform for banks to test fiat-backed blockchain tokens
Visa has announced the launch of the Visa Tokenized Asset Platform, aiming to help banks and financial institutions explore the use of tokenized assets on blockchains, according to Blockworks.
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 on the Ethereum blockchain
Visa’s VTAP will allow banks to test and experiment with how these tokens can be used, offering a way to make transactions faster and more efficient.
The company plans to conduct its first pilot on the Ethereum (ETH) blockchain in 2025, working with a select group of customers, per Blockworks.
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 move aligns with Visa’s past work in the digital currency space, as it has previously collaborated with HSBC and Hang Seng Bank on similar projects in Hong Kong. The pilot highlighted enhanced privacy and security in transactions and showcased potential tokenized assets and programmable finance applications.
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.
