Visa (V: NYSE) recently announced their intention to launch a new Ethereum blockchain based business-to-business payment service which includes fiat currency backed tokens, such as US Dollars and Euros, next year. The Visa Tokenized Asset Platform (VTAP) will start with BBVA as the participating bank. Visa states there are three advantages to VTAP: Easy access to their new service by on network financial institutions through an application programming interface (API); programmability of payments which will allow banks to use smart contracts to direct the issuance of payments when agreed upon terms are met and the interoperability of VTAP across multiple blockchains through a single API. Longer term, VTAP is providing Visa’s 15k global bank customers with an off ramp to the world of digital currency and away from traditional payment systems like wires and payment cards. We have long held the belief that eventually another payment medium will be introduced into the B2B, C2B and P2P segments which would be cheaper, faster and more informationally helpful than current options, VTAP could be a major institutional step in that direction. For further context, predominantly outside the US, a staggering $22 trillion in blockchain based B2B transactions were completed over the last twelve months, digital currencies are here. Furthermore, with the pending change in the White House to a more regulation light administration we see more US companies participating in this greenfield market.
