Visa Launches Platform for Banks to Issue Fiat-Backed Tokens, Signaling Maturation of Stablecoin Ecosystem

Much has changed since then, particularly as it relates to the view traditional players in finance and payments hold around stablecoins.

PayPal, Swift and Visa made announcements this week that further integrate stablecoins into the traditional financial system.

PayPal completed its first business payment, to EY, with its in-house stablecoin, PYUSD, on Thursday (Oct. 3). The FinTech giant also used its PYUSD token to make a venture investment in blockchain firm Chaos Labs last month.

Meanwhile, Swift announced that it will let banks test tokenized transactions on its global messaging network starting next year.

And in perhaps the biggest stablecoin news of the week, Visa launched a new platform Thursday for banks to issue fiat-backed tokens, such as stablecoins and tokenized deposits.

The Visa Tokenized Asset Platform (VTAP) is designed to use the payment company’s expertise in technologies like smart contracts to let banks issue and transfer fiat-backed tokens over blockchain networks.

“Visa has been at the forefront of digital payments for nearly 60 years, and with the introduction of VTAP, we are once again setting the pace for the industry,” Vanessa Colella, global head of innovation and digital partnerships at Visa, said in a press release.

Here's a look at how these announcements could impact the B2B space, cross-border payments and the broader FinTech landscape.

B2B Stablecoin Ambitions

Traditionally seen as a payment network giant in consumer payments, Visa’s ambitions with stablecoins appear firmly rooted in the B2B domain.

VTAP is centered on enabling banks to issue stablecoins and manage tokenized deposits, which could have implications for B2B transactions, cross-border payments and the rise of smart contracts.

Visa’s foray into stablecoins is not merely about adding another payment option for consumers but rather enabling a new level of efficiency in large-scale corporate transactions.

The company’s network scale and established relationships with financial institutions (FIs) worldwide position it to contribute to the stability and legitimacy of stablecoins.

By enabling banks to issue their own stablecoins and integrate tokenized deposits into their systems, Visa could foster widespread adoption, reducing the risk of market panic that often leads to de-pegging events.

Moreover, as banks enter the fray with their regulatory frameworks in place, the perception of stablecoins as a credible asset class could improve.

Visa’s efforts to build an infrastructure for banks to issue stablecoins could create a network effect, where stablecoins issued by reputable institutions reduce the risk of de-pegging and increase user trust.

By addressing key pain points in B2B and cross-border transactions, smart contracts and enterprise payments, stablecoins could emerge as a foundational component of the global financial system, all with the backing of some of the most trusted names in finance.

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