This new platform enables financial institutions to create and manage digital tokens backed by traditional fiat currencies, such as EUR and USD. BBVA plans to use VTAP to generate tokens on the public Ethereum blockchain, with live pilot tests expected to begin in 2025.
Visa recently introduced VTAP as a solution to represent fiat-backed value within blockchain networks. BBVA is among the initial banks in Visa’s network of over 15,000 institutions to adopt this technology, aiming to test and eventually launch tokenized financial services.
Throughout the year, BBVA has been experimenting with VTAP’s core functionalities in a sandbox environment. This includes testing the issuance, transfer, and redemption of bank tokens on a testnet blockchain, as well as how these tokens interact with smart contracts. BBVA’s goal is to pilot the technology with select customers in Europe by 2025, using Ethereum's public blockchain for the live trials.
According to nocash.ro, tokenized money is seen as a key development in exploring blockchain's potential for new financial products and services. Possible applications include automated payments via smart contracts, management of complex credit lines, and providing customers with tokenized treasury securities that can be settled nearly instantaneously.
Officials from BBVA's noted that the bank is committed to advancing its work in blockchain technology and described the partnership with Visa and the VTAP platform as an important step in their ongoing efforts to explore blockchain-based solutions.
VTAP is designed to integrate with existing systems through APIs, allowing for real-time and efficient platform operation. These APIs can facilitate seamless transactions across various blockchain networks, promoting interoperability, which is an essential factor in encouraging wider blockchain adoption by financial institutions.
BBVA has been exploring the tokenization of traditional financial assets for some time. The bank, in partnership with MAPFRE, issued its first structured green bond using smart contracts. Additionally, BBVA collaborated with BME and the Inter-American Development Bank (IDB) to issue a bond in Spain registered on a regulated blockchain market.
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