The Spanish bank, Banco Bilbao Vizcaya Argentaria (BBVA), is already testing Visa’s new Tokenized Asset Platform, aiming to launch a pilot project on Ethereum by 2025. According to Blockworks, Visa, the payment giant, has introduced this platform to help financial institutions issue tokens backed by fiat currency and explore their use in real-world scenarios. This move reflects Visa’s goal of creating global standards that make it easier for financial institutions to interact within the blockchain space.
Cuy Sheffield, Visa’s Head of Crypto, pointed out that the growing trend of tokenizing real assets, such as real estate and debt securities, is driving the need for bringing different forms of money onto blockchain platforms for easier trading. He mentioned, “We see a big opportunity for banks to issue their own fiat-backed tokens on blockchains in a regulated way, allowing their customers to participate in these on-chain capital markets.”
Visa has been closely following how central banks view tokenization as a way to modernize financial systems. They have already conducted pilot projects with HSBC and Hang Seng Bank through the Digital Hong Kong Dollar program and are also involved in a pilot project for the digital real with Brazil’s Central Bank.
BBVA is currently using Visa’s Tokenized Asset Platform (VTAP) to test the process of issuing, transferring, and redeeming bank tokens on a trial blockchain. Their goal is to launch a pilot program with selected clients on the Ethereum blockchain in 2025.
Sheffield emphasized the importance of a cautious approach, saying, “It’s a slow process, and for good reason. You need to be careful, understand the technology, and educate both internal teams and regulators.”
One key advantage for banks is the ability to enable real-time money movement for their clients. Catherine Gu, Visa’s Head of CBDC and Tokenized Assets, mentioned that cross-border payments are a major area of interest, especially for multinational companies that need to transfer money around the clock.
Sheffield believes that the interaction with tokenized real-world assets will likely drive most of the market demand. For example, a bank could let its customers use a fiat-backed token to instantly buy tokenized commodities or Treasury securities.
With the introduction of the Visa Tokenized Asset Platform, Visa aims to help create standards that ensure smooth interactions between financial institutions, making it easier for them to work together in the blockchain ecosystem.
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