The platform supports various use cases, including real-time money movement, interbank transfers with wholesale central bank digital currencies (CBDCs), and cross-border transactions for multinational corporations.

Visa's initiative aims to establish global standards to facilitate interactions between banks and tokenization efforts, addressing the growing interest from traditional financial institutions.

This move comes amid increasing engagement with blockchain technology from major asset managers like BlackRock and State Street, highlighting a shift in the financial landscape.

Visa has unveiled the Visa Tokenized Asset Platform (VTAP), designed to assist banks in issuing and testing fiat-backed tokens on blockchain networks.

Spain's Banco Bilbao Vizcaya Argentaria (BBVA) is set to pilot this innovative platform with select customers on the Ethereum blockchain in 2025.

Cuy Sheffield, Visa's crypto head, emphasized that VTAP will enable banks to issue regulated fiat-backed tokens, enhancing access to on-chain capital markets.

To combat fragmentation in tokenization and smart contracts, Visa is working to create interoperability standards among financial institutions.

The value of tokenized real-world assets has surged to $12.36 billion, with over 63,000 asset holders, indicating a robust market demand.

Additionally, banks may leverage fiat-backed tokens for purchasing tokenized assets, with smart contracts enabling automated lending against commodities.

Catherine Gu from Visa has pointed out the need for improved transfer rails, particularly for cross-border transactions, to better serve multinational corporations.

As the financial sector evolves, Visa's VTAP could play a crucial role in helping banks modernize their operations and enhance liquidity in the market.

However, Visa faces challenges, including a lawsuit from the US Department of Justice alleging monopolistic practices in the debit card market.