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 enable banks to “mint, burn and transfer” tokens, providing a robust infrastructure for financial institutions looking to leverage the benefits of blockchain technology, said a statement. The service is being launched as more businesses and financial institutions express growing interest in how cryptocurrencies and blockchain can enhance their operations.
“Visa has been at the forefront of digital payments for nearly sixty years, and with the introduction of VTAP, we are once again setting the pace for the industry,” said Vanessa Colella, global head of innovation and digital partnerships at Visa, in the statement.
“We’re excited to leverage our experience with tokenization to help banks integrate blockchain technologies into their operations.”
Testing phase and future plans
Spanish bank BBVA has tested Visa’s platform for a year and expects a pilot for select customers on the Ethereum blockchain at some point next year.
Stablecoins are cryptocurrencies typically pegged to stable assets like the US dollar; they have gained significant traction in recent years. They offer a bridge between traditional finance and cryptocurrencies, providing a less volatile option for transactions and a safe haven from the price fluctuations common in cryptocurrencies like Bitcoin and Ether.
Visa’s entry into this space follows similar moves by other financial technology giants. PayPal Holdings Inc. has already launched its stablecoin, PYUSD, while Stripe Inc. now allows merchants to accept stablecoins for online transactions.
Experts suggest this development could potentially accelerate the adoption of blockchain technology in mainstream finance, offering banks new tools to innovate and expand their services in the digital age. As the lines between traditional banking and cryptocurrency continue to blur, platforms like VTAP may play a crucial role in shaping the future of global finance.
First Published: Oct 04 2024 | 1:39 PM IST
