Banks using VTAP will be able to purchase tokenized real-world assets (RWAs) such as commodities or bonds. These transactions will benefit from near-real-time settlement facilitated by the fiat-backed tokens.
One of the first financial institutions to use VTAP will be the Spanish bank BBVA, which plans to launch a live pilot in 2025.
Ethereum serves as the blockchain platform on which the fiat-backed tokens will be issued. Through Ethereumβs smart contract functionality, VTAP will enable automated and secure transactions involving tokenized real-world assets.
Fiat-backed tokens are digital tokens that are pegged to traditional currencies (fiat), such as USD or EUR. These tokens represent the value of the currency and can be used for transactions or exchanges on blockchain platforms like Ethereum.
VTAP is a new product developed by Visa that helps banks issue fiat-backed tokens on the Ethereum network. It aims to digitize and automate existing processes through smart contracts, enabling the exchange of real-world assets (RWAs).
Ethereum has a bright future ahead of it, as it is well on its way to establishing itself not only as a transactional currency, but ultimately as a βstore of valueβ for businesses looking to optimize their assets. ETH works ...Read more