How Visa And Swift Are Plunging Deeper Into the World of Digital Currencies

Payments companies may not yet be ready to embrace fully the world of blockchains, but some major payments networks are taking steps to deepen their experience in the world of digital currencies. Witness Visa Inc., which early Thursday said it will help banks issue tokens they create on a blockchain. The tokens will be backed by fiat money, such as dollars.

So-called live pilots for the service, dubbed VTAP for Visa Tokenized Asset Platform, are expected to start next year, Visa says, with BBVA as the participating bank.

The news comes at the same time as an announcement from Swift, the Brussels-based international financial-messaging network, that it intends to run what it calls trial transactions with digital currencies and assets. As with Visa’s initiative, the Swift project is expected to start in 2025.

VTAP, which Visa says has been developed internally by “blockchain experts,” is aimed at least initially at business-to-business transactions. It’s also intended to make it easier for banks to introduce fiat currencies into blockchain systems, Visa said in its announcement.

The new platform has what Visa says are three major advantages. One is ease of access to the Visa platform. Participating banks, for example, can integrate to the platform using application programming interfaces. A second advantage is what the network calls programmability, which will allow banks to use so-called smart contracts to control the issuance of payments when pre-arranged terms are met. The third benefit, Visa says, is that VTAP will offer interoperability across multiple blockchains through a single application programming interface.

BBVA has been testing the system this year, according to Visa, and intends to launch what the network calls a “live pilot” next year on the Ethereum blockchain. “This collaboration marks a significant milestone in our exploration of the potential of blockchain technology and will ultimately help enable us to broaden our banking services and expand the market with new financial solutions,” said Francisco Maroto, head of blockchain and digital assets at BBVA, in a statement.

Visa is not new to the world of blockchain-based currencies. A year ago, for example, it announced a pilot to extend its cryptocurrency services into merchant acquiring for cross-border transactions. That initiative included support from the major processors Worldpay and Nuvei, as well as processing on the Ethereum and Solana blockchains.

Meanwhile, Swift said it has already run transactions using tokenized value through both public and private blockchains. Now, the network wants to test ways it could provide what it calls “a single window of access to multiple digital-asset classes and currencies.” It says its initiative will start with payments as well as foreign exchange, securities, and trade. Its goal, it says, is to be the connecting facility for isolated “digital islands” whose disparate standards prevent ready-made interconnection.

“With Swift’s vast global reach, we are uniquely positioned to bridge both emerging and established forms of value, and we’re now focused on demonstrating this in real-world, mainstream applications,” said Tom Zschach, Swift’s chief innovation officer, in a statement.

Swift, which was founded in 1973 and went live four years later, says its platform links more than 11,500 banks, securities firms, corporate customers, and “market infrastructures” in more than 200 countries and territories.