Visa to pilot tokenized asset platform for banks on Ethereum

Visa to develop platform where banks can test fiat-backed blockchain tokens

Visa has announced the launch of the Visa Tokenized Asset Platform, which aims to help banks and financial institutions explore the use of tokenized assets on blockchains, according to Blockworks.

Tokenization is a process that converts real-world assets, such as money, into digital tokens that can be used on blockchain networks.

This technology could enable banks to participate in digital financial markets by allowing them to issue fiat-backed tokens representing traditional money via blockchain systems.

INTEL: Visa is developing tokenized asset platform for banks, planning to pilot on Ethereum in 2025

— Solid Intel 📡 (@solidintel_x) September 25, 2024

Visa on the Ethereum blockchain

Visa’s VTAP will allow banks to test and experiment with how these tokens could be used, providing a way to make transactions faster and more efficient.

According to Blockworks, the company plans to launch its first pilot on the Ethereum (ETH) blockchain in 2025, working with a select group of clients.

Ethereum is one of the most popular blockchain networks and supports smart contracts, which are self-executing programs that manage transactions when certain conditions are met.

The move aligns with Visa’s past work in the digital currency space, as it has previously collaborated with HSBC and Hang Seng Bank in Hong Kong on similar projects. The pilot emphasized enhanced privacy and security in transactions and showcased potential tokenized assets and programmable finance applications.

Visa is active in the token economy and stablecoin space. Earlier in September, Ether.fi launched a Visa-backed credit card and wallet app that allows users to access fiat loans using crypto as collateral.