Visa Pioneers Fiat-Backed Tokens on Ethereum – A New Era for Digital Assets in Banking
In a groundbreaking move that could reshape the landscape of digital finance, Visa, the global payments giant, has unveiled a new product designed to empower banks to issue fiat-backed tokens on the Ethereum network. This innovative platform, known as the Visa Tokenized Asset Platform (VTAP), marks a significant step towards the integration of blockchain technology in traditional banking systems.
VTAP is set to revolutionize the way banks interact with real-world assets (RWAs) by enabling the development of fiat-backed tokens powered by smart contracts. This technology promises to digitize and automate existing processes, potentially streamlining the exchange of assets such as commodities and bonds with near-real-time settlement capabilities.
Spanish banking giant BBVA is slated to be among the first financial institutions to adopt this cutting-edge technology, with plans to launch a live pilot in 2025. This move underscores the growing interest and confidence in blockchain-based solutions within the traditional banking sector, potentially paving the way for wider adoption across the industry.
Technologies Used:
- Ethereum Blockchain: The underlying network on which the fiat-backed tokens will be issued.
- Smart Contracts: Self-executing contracts with the terms of the agreement directly written into code, powering the automation of asset exchanges.
- Tokenization: The process of converting rights to an asset into a digital token on a blockchain.
Companies Involved:
- Visa: Developer of the Visa Tokenized Asset Platform (VTAP).
- BBVA: One of the first banks to pilot the VTAP technology.
Sustainability Focus:
- Transparency: Blockchain-based systems offer enhanced traceability and transparency in financial transactions.
- Financial Inclusion: Tokenization of assets could potentially lower barriers to entry for a wider range of investors.
SDGs Impacted:
- SDG 9 (Industry, Innovation and Infrastructure): Promotes technological innovation in financial infrastructure.
- SDG 8 (Decent Work and Economic Growth): Could contribute to more efficient financial systems, potentially stimulating economic growth.
- SDG 17 (Partnerships for the Goals): Encourages collaboration between technology companies and traditional financial institutions.
Geographic Focus: Global
Industry Focus: Finance
Source: CoinDesk
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