Visa Launches Platform to Help Banks Test Tokenised Assets

The financial services company's new platform will allow financial institutions to issue fiat-backed tokens and test out their use cases.

Payment giant Visa has unveiled a new platform to aid banks in testing out tokenised assets, as reported by Blockworks.

The platform will enable financial institutions to mint fiat-backed tokens and experiment with their use cases.

This initiative aligns with Visa’s broader goal of standardising global practices for entities venturing into blockchain-based products amid the increasing adoption of tokenised real-world assets.

In 2022, Visa undertook a pilot project with HSBC and Hang Seng Bank to test the Digital Hong Kong Dollar program launched by the Hong Kong Monetary Authority.

The tokenisation of real-world assets has emerged as a rapidly growing segment within the crypto industry, with central banks spearheading the development of CBDCs (Central Bank Digital Currencies) and asset managers like BlackRock launching their Ethereum-based tokenised fund BUI DLA.

In a similar vein, Visa aims to empower banks by facilitating the creation of tokenised products that can be utilised for both corporate and customer applications.

Other notable players in this domain include JPMorgan, which offers tokenisation services through its blockchain subsidiary Onyx, and Citigroup, which launched a private token service for institutional clients in September 2023.

According to Cuy Sheffield, Visa’s head of crypto products, products ranging from real estate to debt securities are driving the adoption of tokenised real-world assets, highlighting the increasing demand for integrating diverse forms of cash into these channels for trading purposes.

Sheffield further elaborated, “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.”

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