Visa Launches Platform to Simplify Fiat-Backed Tokens for Banks

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Visa, an American multinational payment corporation, has made significant strides, attracting attention within the digital asset space. The payment giant recently introduced a tokenized asset platform dubbed the Visa Tokenized Asset Platform (VTAP). This initiative came after Visa partnered with Tangem, a top producer of hardware wallet solutions, to create a self-custodial payment system.

Bridging Banks and Digital Assets for Seamless Integration

During the announcement, Visa noted that the VTAP is set to revolutionize the relationship between banks and digital assets. The platform is designed to streamline the process for financial institutions looking to adopt digital assets. It could enable them to offer their customers secure and compliant tokenized solutions by utilizing smart contracts.

This newly launched platform represents a major step in integrating traditional financial systems with blockchain technology. It will allow banks to create digital tokens pegged to fiat currencies like the US dollar.

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Like this invention, Stripe launched a fiat-to-crypto on-ramp service in May to solve the cold start problem. However, the on-ramp service differs from VTAP because it was intended to help Web3 enterprises. It was launched to offer a simple method for users to fill their cryptocurrency wallets.

VTAP Pioneers Seamless Real-World Asset Transactions on Ethereum

This innovative platform aims to digitize and automate existing processes. It will facilitate the seamless exchange of Real-World Assets (RWAs) such as commodities and bonds. The payment company mentioned that VTAP will leverage the Ethereum network, one of the most widely used blockchain platforms.

This is because of the network’s smart contract capabilities and established developer community. Blockchain technology will allow banks to purchase these tokenized assets in a near-real-time settlement. Above all, it will streamline transactions and enhance liquidity.

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Interestingly, Spanish bank BBVA is among the first financial institutions to adopt VTAP, planning to launch a live pilot program in 2025. This early collaboration underscores the growing interest from traditional banking institutions. It demonstrates that financial institutions are ready to explore blockchain solutions to improve efficiency and reduce costs in asset management.

Visa, a Key Player in the Crypto Industry

Visa’s involvement in blockchain and digital assets is familiar; the company has been actively processing cryptocurrency payments. Notably, it has been deeply involved in stablecoin USDC on the Ethereum network. In 2021, Visa introduced a new platform that allows the transfer of Central Bank Digital Currencies and stablecoins across different blockchains.

The company has launched several innovative platforms to improve the digital payment process. Subsequently, it makes the use of crypto assets more seamless for consumers and businesses alike. This background positions Visa as a trusted player in the digital finance space.