On Thursday, Visa launched the Visa Tokenized Asset Platform (VTAP) through a partnership with a Spanish bank. VTAP is a tool for banks to launch real-world assets (RWAs), connecting them to the crypto ecosystem.

The RWA market is growing, and Visa hopes to reap the rewards of plugging banks in. 

VTAP’s Early Stages

Credit card giant Visa declared this news via a press release, describing its new product as the Visa Tokenized Asset Platform (VTAP). Visa called it a product for traditional finance (TradFi) to bridge fiat currencies with blockchains and planned a wide-release live pilot with Ethereum in early 2025. 

The press release may describe VTAP as a completely new product, but this is not its first public appearance. Visa began a partnership with Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA) in late September, intending to carry out a small “sandbox” test of VTAP. BBVA will continue to play this leading role in VTAP’s gradual rollout.

“We are proud to continue spearheading the exploration of tokenized solutions with Visa through its VTAP platform. This collaboration marks a significant milestone… and will ultimately help enable us to broaden our banking services and expand the market,” said Francisco Maroto, Head of Blockchain and Digital Assets at BBVA.

Visa’s press release focused on VTAP’s ability to plug traditional finance into crypto by creating RWAs, especially stablecoins. This big-picture analysis, however, is less useful at describing VTAP’s influence in regular bank operations. A Fortune interview with Maroto helps elucidate the picture on the ground. 

Visa, Real-World Assets and Stablecoins

The interview described BBVA’s partnership with Visa as more of a stablecoin launch than the development of a new financial tool. Maroto didn’t mention VTAP by name, claiming instead that BBVA is building a new stablecoin for the crypto settlements. BBVA’s European area of operations is a big asset to Visa due to recent EU stablecoin regulations. 

In other words, VTAP isn’t just a platform to connect TradFi to the blockchain world; it’s a way to connect Visa to the growing RWA market. Visa has conducted experiments with RWAs, such as tokenized deposits in multiple jurisdictions this year, and VTAP aims to take it worldwide. RWAs are a growing market, and VTAP looks like Visa’s ticket in. 

Considering the sheer speed of growth in the RWA market, Visa’s project will be quite interesting. If other banks follow BBVA’s lead and use VTAP to enter the stablecoins sector, Visa will reap huge rewards. However, if profits are tempting enough, other institutions will surely develop their own RWA platforms. 

Ultimately, VTAP is still in the early stages. Visa will focus on the specific partnership with BBVA for at least several months, and the results will determine the wider rollout. Still, if conditions are right, VTAP could prove a formidable tool for TradFi institutions in the future. 

Source : BeInCrypto - Oct 4, 2024