Visa has announced another major expansion of its efforts and exploration with tokenisation, launching a new platform to connect fiat currencies with blockchain-backed assets.
The Visa Tokenized Asset Platform (VTAP) has been made available on the US-based global payments firm and card issuer’s Visa Developer Platform. It will allow participating financial institutions to create and experiment with fiat-backed tokens in a sandbox.
Digital sandbox concepts are becoming increasingly popular throughout payments and fintech, seen in the form of the UK’s Digital Security Sandbox (DSS), whilst a similar concept is being promoted by the UK Finance trade body’s proposed Digital Liability Network (DLN).
Sandboxes function as a means for stakeholders to experiment with tokenised and digital assets, with many seeing these developments as critical to the future of payments.
Visa, for example, aims to apply its background knowledge in fiat currency transactions to the emerging blockchain, crypto and tokenisation spheres. The company emphasises that tech like smart contracts can enable banks to issue and transfer fiat-backed tokens across blockchain networks.
“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.
“We’re excited to leverage our experience with tokenisation to help banks integrate blockchain technologies into their operations.”
Visa’s efforts in tokenisation are fronted by the Visa Token Service (VTS), which allows participating merchants to leverage the tech for authorisation and loyalty rewards during checkout. The company announced a major milestone earlier this year with the issuance of its 10 billionth token at the Money20/20 trade show and conference in Amsterdam.
The firm is not acting alone in its experimentation with tokenisation. Spanish multinational bank BBVA has been working in the VTAP sandbox for most of this year, before its full launch this week.
The bank has been testing functionalities like issuance, transfer and redemption of bank tokens and token interactions with smart contracts. Visa asserts that moving forward, it remains committed to working with various financial institutions and fintechs to test emerging technologies.
“We are proud to continue spearheading the exploration of tokenized solutions with Visa through its VTAP platform,” said Francisco Maroto, Head of Blockchain and Digital Assets, BBVA.
“This collaboration marks a significant milestone in our exploration of the potential of blockchain technology and will ultimately help enable us to broaden our banking services and expand the market with new financial solutions.”
