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Visa to develop platform for banks to test fiat-backed blockchain tokens
Visa has announced the launch of the Visa Tokenized Assets Platform, aimed at helping banks and financial institutions explore the use of tokenized assets on blockchains. according to Blocks.
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 allow banks to issue fiat-backed tokens, representing traditional money, on blockchain systems, allowing them to participate in digital financial markets.
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Visa on the ethereum blockchain
Visa’s VTAP will allow banks to test and experiment with how these tokens can be used, offering a way to make transactions faster and more efficient.
The company plans to run its first pilot on the ethereum (eth) blockchain in 2025, working with a select group of clients, according to Blockworks.
ethereum is one of the most popular blockchain networks and supports smart contracts: self-executing programs that handle transactions when certain conditions are met.
This move aligns with Visa’s previous work in the digital currency space, having previously collaborated with HSBC and Hang Seng Bank on similar projects in Hong Kong. The pilot project highlighted improved privacy and security in transactions and showcased potential tokenized assets and programmable financial applications.
Visa has been active in the token economy and stablecoin space; in early September, Ether.fi launched a Visa-enabled credit card and wallet app, allowing users to access fiat credit using cryptocurrency as collateral.
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