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Visa has created a new platform in a bid to help financial institutions issue fiat-backed tokens and test out their use cases.   The payments giant’s guidance to banks exploring this space is part of a broader effort to create global standards that ease interactions between such entities, Visa executives noted.     As more real-world assets — from real estate to debt securities — come onto blockchains, there’s a growing need to bring more forms of cash onto those rails to trade them, said Visa crypto head Cuy Sheffield. “We think that creates a significant opportunity for banks to issue their own fiat-backed tokens on blockchains, do it in a regulated way and enable their customers to access and participate in these on-chain capital markets,” he told Blockworks.  Visa has watched first hand as central banks explore the potential of tokenization and how it can modernize financial infrastructure, Sheffield noted.  The company last year did a pilot with HSBC and Hang Seng Bank, for example, as part of the Hong Kong Monetary Authority’s Digital Hong Kong Dollar program. The test simulated interbank business-to-business payments, including property payment and settlement between collection institutions and merchants. Also last year, the Central Bank of Brazil picked Visa to participate in a CBDC pilot of the digital real.   Read more: ‘Learning by doing’ is critical to digital dollar development, Visa exec says “And then we started to see more interest from many commercial banks and our existing partners starting to tiptoe in and say, ‘What are fiat-backed tokens and tokenized deposits?’” Sheffield told Blockworks earlier this year. “‘Should we create one?’” Spain-based Banco Bilbao Vizcaya Argentaria (BBVA) has been working in the new Visa Tokenized Asset Platform (VTAP) sandbox this year, Visa said Wednesday.  The bank was testing the issuance, transfer and redemption of a bank…

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Filed under: News - @ September 25, 2024 12:22 pm