Visa helps Spanish major bank issue Stablecoin on Ethereum.

In Bilbao, der Hauptstadt des Baskenlandes, ist der Hauptsitz einer der größten Banken Europas. Bild von Metro Centric via flickr.com. Lizenz: Creative Commons

The credit card service provider Visa has developed a platform that allows banks to bring stablecoins onto the blockchain. A significant step in the right direction – one that the Spanish major bank Banco Bilbao Vizcaya Argentaria (BBVA) is already undertaking. With this, the ECB’s CBDC can be ruled out from now.

Visa has yet to officially announce this, but they have not denied it either. The crypto magazine blockworks.co reported on a conversation with Visa’s „Head of Crypto,“ Guy Sheffield, which has since been deleted but served as the basis for a flood of articles from other magazines. However, the article can still be read on archive.today here. Additionally, Coindesk claims to know about an unofficial announcement.

So we can assume that the story holds water. According to the Blockworks report, BBVA and Visa have been working for a year in a sandbox of the „Visa Tokenized Asset Platform“ (VTAP). This is intended to tokenize „Real World Assets“ for financial institutions, which initially means „fiat-backed tokens,“ or stablecoins.

„We think it’s a significant opportunity for banks to issue their own fiat-backed tokens on blockchains in a regulated manner, which allows their customers to participate in on-chain capital markets,“ Sheffield explains. It is, therefore, about creating access to DeFi markets for other tokenized assets using regulated stablecoins.

Originally, Visa had helped central banks, such as those in Hong Kong or Brazil, to issue digital central bank money. However, more and more banks, Sheffield says, have asked what fiat-backed tokens and tokenized deposits are and whether they should issue some themselves. Visa evidently responded to this with the VTAP.

According to Coindesk and the yet-unofficial announcement, these „fiat-backed tokens“—Visa avoids the term stablecoins—are to be issued on the Ethereum network through smart contracts. The announcement reiterates that these stablecoins are not an end in themselves but are intended to buy and trade „tokenized RWA,“ which means „Real World Assets,“ such as stocks or government bonds.

BBVA expects, according to Coindesk, to go live with a pilot next year. There is much to look forward to—not only because a stablecoin on the Ethereum blockchain promises a high degree of interoperability with existing wallets and dApps but also because private industry is light-years ahead of the ECB’s central bank digital currency, which is announced for some undefined future date and is already obsolete.