Transforming Global Payments: The Role of Tokenized Money & Funds in Cross-Border Transactions – Visa
Visa began actively exploring asset tokenization in 2021, initiating collaborations with over 40 central banks worldwide, including involvement in Brazil’s Drex Pilot and Singapore’s Global CBDC Challenge. In 2022, Visa was recognized with the “Best Ecosystem” award by the Hong Kong Monetary Authority (HKMA) for its contributions to the Global CBDC Fast Track Programme. Visa also took part in Phase 1 of HKMA’s e-HKD Pilot Programme, working alongside major banks like HSBC and Hang Seng Bank to test the use of tokenized deposits in property transactions and acquirer-merchant settlements. Serving as the technology provider, Visa introduced its Visa Tokenized Asset Platform (VTAP), a suite of APIs that enables financial institutions to mint, burn, and transfer digital tokens across both permissioned and public blockchain networks.
One of the pilot use cases includes the tokenization and purchase of money market fund (MMF) shares, which will be executed on the Ethereum testnet. This effort aims to evaluate interoperability with public blockchains and determine the most efficient transaction architecture. Given the siloed nature of permissioned networks, public blockchains are increasingly viewed as better suited for multi-party exchanges. The initiative also allows participants to assess security and compliance requirements for using public blockchain infrastructure.
