Visa introduced a smart contract-supporting digital asset management platform, with the live pilots beginning in a few months. Central banks and institutions can hop on to begin trials.
Payment processing giant Visa has yet again made news for adopting blockchain and cryptocurrency technologies. This time, it unveiled a digital asset management platform called the Visa Tokenized Asset Platform (VTAP), aimed at central banks and financial institutions. While not fully functional, at least for the near future, this sandbox program will allow participants to create fiat-backed tokens. Live pilots start in 2025 on Ethereum.
“The VTAP solution is available on the Visa Developer Platform for participating financial institution partners, to create and experiment with their fiat-backed tokens in a VTAP sandbox,” Visa’s announcement read.
“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, Visa. “We’re excited to leverage our experience with tokenization to help banks integrate blockchain technologies into their operations.”
VTAP will allow participants to transact, mint, and burn the fiat-backed assets they create. With that, banks can make their own stablecoins, for instance. They can also create and issue tokenized deposits. Beyond those abilities, VTAP offers programmability, allowing its users to deploy smart contracts that handle business logic and enhance payment processes. Smart contracts can engender advantages like automating “processes like administering complex lines of credit using smart contracts and use fiat-backed tokens to release payments when payment terms are met.”
Furthermore, Visa will make VTAP a highly interoperable platform, allowing users to interact with a whole host of assets deployed over numerous blockchain networks. The platform’s interface would be anything but technical, making it very convenient for users to interact with it effortlessly, taking away from difficulties a lot of individuals and entities face while transacting over blockchains.
Visa Is Making Aggressive Moves in the Blockchain Space
“Visa’s vision is to enable interoperability across different blockchains for banks utilizing the VTAP platform,” the announcement relayed. “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.”
Despite its expansion into new territories, Visa is facing legal problems in the US, as the Department of Justice (DoJ) feels the company has operated as a monopoly in the debit payments space. The company allegedly signs exclusivity contracts with vendors and threatens penalties if they accommodate its competition.
