Visa Introduces New Platform For Testing Tokenized Assets And Smart Contracts

Visa has officially launched a new platform designed to help financial institutions issue fiat-backed tokens and explore their applications. This initiative aims to establish global standards that enhance collaboration among financial entities in the blockchain space.

Cuy Sheffield, the Head of Crypto for the company, noted the growing trend of tokenizing real assets, such as real estate and debt securities, which is driving the need to integrate money into blockchain platforms for trading.

Previously, the global payment giant joined forces with Transak, a Web3 infrastructure provider, to unveil a solution for cryptocurrency withdrawals and payments through Visa Direct.

Renewed Interest

Visa has been monitoring renewed interest by central banks in tokenization and its capacity to modernize financial systems. The company has already piloted projects with HSBC and Hang Seng Bank as part of the Digital Hong Kong Dollar initiative, and is involved in a pilot for the digital real with the Central Bank of Brazil.

Banco Bilbao Vizcaya Argentaria (BBVA) in Spain is actively engaged with the new Visa Tokenized Asset Platform (VTAP). The bank is testing the issuance, transfer, and redemption of a bank token on a trial blockchain, aiming to launch an initial pilot project with select customers in 2025 using the Ethereum blockchain.

Facilitating Real-Time Transfers

Among the various applications for banks is the ability to facilitate real-time money transfers between their clients. Catherine Gu, who leads CBDC and tokenized assets at Visa, pointed out that cross-border transactions are particularly significant for banks, especially for multinational corporations that require around-the-clock money movement.

Sheffield anticipates that engagement with tokenized real-world assets could significantly influence market demand. For instance, a bank might enable its customers to use a fiat-backed token to buy tokenized commodities or Treasury securities with immediate settlement.

In any case, through the Visa Tokenized Asset Platform, the payments giant aims to foster the development of standards that ensure interoperability among financial institutions.