Visa has unveiled its new Visa Tokenized Asset Platform (VTAP), a service designed to enable the issuance and management of digital assets.
On Oct. 3 the financial services giant revealed its VTAP, which it said is built to support a wide range of tokenized assets, including stablecoins and central bank digital currencies (CBDCs).
Visa’s digital asset venture
The platform is positioning itself to cater to both institutional investors and central banks, offering an end-to-end infrastructure for securely minting, transferring and settling digital assets across public and permissioned blockchains.
Vanessa Colella, the global head of innovation and digital partnerships at Visa said:
“We’re excited to leverage our experience with tokenization to help banks integrate blockchain technologies into their operations.”
Visa sees VTAP as a tool that can help banks digitize and automate existing workflows, potentially “powering the future exchange of new types of real-world assets.”
The company gave an example of a bank automating the administration of complex credit lines via smart contracts and fiat-backed tokens for issuing payments when payment terms are met.
The announcement outlined another example:
“A bank could also enable their customers to use a fiat-backed token to purchase tokenized commodities or tokenized treasuries with near-real-time settlement onchain.”
According to Visa, the VTAP is currently in a sandbox phase, with participants like the Banco Bilbao Vizcaya Argentaria (BBVA) testing core functionalities of the platform.
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The goal is for the VTAP to be launched initially in a live pilot phase with select customers in 2025 via the public Ethereum blockchain.
Blockchain for banking
Another primary aspect of Visa’s vision for the platform is interoperability across different blockchains for banks that use its services.
“With a single API connection to VTAP, in the future, banks can enable multiple use cases and interact with partners and clients on both permissioned and public blockchains.”
Given Visa’s giant footprint in the world of traditional finance (TradFi), this development seems to be one of its largest leaps into bridging the gap with decentralized finance.
It is positioning itself as requiring minimal technical integration, so that participating banks can access the features in a way that they can be “always on and more efficient.”
However, this development comes as Visa faces scrutiny from authorities in the United States. On Sept. 24, the U.S. Department of Justice (DOJ) filed an antitrust suit against the company for allegedly operating a debit payments monopoly.
It claimed Visa uses exclusivity agreements and the threat of penalties against vendors to ensure competition doesn’t get a slice of its market share.
Two days later, a report emerged from the consumer watchdog organization Accountable.US, which pointed fingers at both Visa and Mastercard for operating as a duopoly to ward off competition in the debit and credit card payments sector.
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