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Visa Inc. has launched a new platform to help banks issue stablecoins and other fiat-backed tokens internationally. The Visa Tokenized Asset Platform (VTAP) will go live next year.
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VTAP will allow banks to “mint, burn and transfer” tokens, providing a robust infrastructure for financial institutions seeking to leverage the benefits of blockchain technology, a statement said. The service is launching as more businesses and financial institutions express growing interest in how cryptocurrencies and blockchain can improve their operations.
“Visa has been at the forefront of digital payments for nearly six decades, and with the introduction of VTAP, we are once again setting the tone for the industry,” said Vanessa Colella, global head of innovation and digital partnerships at Visa, in the statement.
“We are excited to leverage our experience in tokenization to help banks integrate blockchain technologies into their operations.”
Testing phase and future plans
Spanish bank BBVA has been testing the Visa platform for a year and expects a pilot for select clients on the Ethereum blockchain at some point next year.
Stablecoins are cryptocurrencies typically linked to stable assets like the US dollar; they have gained popularity in recent years. They provide a bridge between traditional finance and cryptocurrencies, providing a less volatile option for transactions and a refuge from price fluctuations common in cryptocurrencies like Bitcoin and Ether.
Visa’s entry into this space follows similar moves by other fintech giants. PayPal Holdings Inc. has already launched its stablecoin, PYUSD, while Stripe Inc. now allows merchants to accept stablecoins for online transactions.
Experts suggest that this development could potentially accelerate the adoption of blockchain technology in traditional finance, giving banks new tools to innovate and expand their services in the digital age. As the lines between traditional banking and cryptocurrencies continue to blur, platforms like VTAP could play a crucial role in shaping the future of global finance.
First publication: October 4, 2024 | 1:39 p.m. STI