Visa Inc. (NYSE:V) has introduced its Visa Tokenized Asset Platform (VTAP), a system designed to facilitate financial institutions issue and manage fiat-backed tokens on blockchain networks, bridging existing fiat currencies with blockchain technology.
On October 3, the financial services giant revealed VTAP, which aims to support various tokenized assets, including stablecoins and central bank digital currencies (CBDCs).
Currently in its sandbox phase, VTAP is being tested by participants such as Banco Bilbao Vizcaya Argentaria (BBVA), with a focus on testing how VTAP can be used to issue stablecoins and other fiat-backed tokens.
It is expected that Visa would be using the BBVA stablecoins during its pilot program, which would be backed by either euro or U.S dollar. Moving forward, the bank envisions expanding its usage for external clients as technology matures.
Visa’s Digital Asset Initiative
VTAP is tailored for institutional investors and central banks, providing comprehensive infrastructure to securely mint, transfer, and settle digital assets across public and permissioned blockchains.
Vanessa Colella, Visa’s Global Head of Innovation and Digital Partnerships, commented:
“We’re excited to leverage our experience with tokenization to help banks integrate blockchain technologies into their operations.”
Visa envisions VTAP as a tool to help banks digitize and automate workflows, potentially enabling the future exchange of new types of real-world assets.
An example provided by Visa shows how a bank could automate complex credit lines through smart contracts and fiat-backed tokens, triggering payments when specific conditions are met.
Another use case highlights how:
“A bank could enable customers to use fiat-backed tokens to purchase tokenized commodities or tokenized treasuries, with near real-time settlement on-chain.”
As part of its development, VTAP is currently undergoing tests and preparing for its first live pilot, expected to run on the Ethereum blockchain in 2025. The pilot would involve selecting financial institutions, testing the issuance and transfer of tokens on a real-world scale.
Blockchain for Banking
Interoperability is central to Visa’s vision for VTAP. The platform is designed to work across multiple blockchains:
“With a single API connection to VTAP, banks will be able to enable numerous use cases and interact with partners and clients on both permissioned and public blockchains.”
Positioning VTAP as a bridge between traditional finance and decentralized finance, Visa offers a solution that requires minimal technical integration. This ensures that banks can access VTAP's features in a way that is always on and highly efficient.
Fighting DOJ lawsuit
However, Visa is currently facing regulatory scrutiny. On September 24, the Department of Justice (DOJ) filed an antitrust lawsuit, accusing Visa of monopolizing the debit payments sector.
The DOJ claims Visa used exclusivity agreements and threats of penalties against vendors to prevent competition from gaining a foothold in the market.
Shortly after, a report by Accountable.US accused Visa and Mastercard of maintaining a duopoly to suppress competition in the debit and credit card payments sector.
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