It’s one of the most repeated words in the financial world in recent months: stablecoins. It is a type of virtual currency, and its value is pegged to real money, making it more stable, but by no means risk-free. In other words, stablecoins are a type of token that in theory could help decentralize the financial system, but in practice they are controlled by large private companies, mostly American companies. In this scenario, Spain’s big banks do not want to lose ground, so companies such as Caixabank, BBVA and Santander are accelerating their steps.
They are not doing so jointly by betting on a stablecoin to unify the entire Spanish banking sector, but rather opting for different approaches. On the one hand, Caixabank has collaborated with various European organizations such as ING, Danske Bank and UniCredit to create a euro-linked stablecoin. Meanwhile, BBVA will operate in its own currency by 2026 and will also operate under the European Union’s Markets in Cryptoassets Regulation (MiCA). Meanwhile, Banco Santander is considering similar measures in currencies pegged to G7 currencies, in collaboration with nine other large banks, including Bank of America, Barclays, Citigroup and Goldman Sachs. Additionally, an increasing number of banks, such as Baninter, are considering future responses. VanInter denies operating independently, but admits it is analyzing “multiple consortiums” as an entryway to stablecoins.
Central banks outside of this “boom” of stablecoins that will need to coexist with the digital euro are also developing. Indeed, in recent days, José Luis Escriva, Governor of the Bank of Spain, defended the role of stablecoins and digital currencies, saying that they always fall under the umbrella of regulations that provide guarantees. “It is important that the ECB plays a central role in the transition to digital money, because it is essential in providing security to payment systems and must continue to do so in this new world,” Escriva said at a conference organized by Santander, which was also attended by President Ana Botín.
“We see nothing that prevents European banks from cooperating in holding stablecoins, especially in cross-border projects,” he said, but it will always be in a system that guarantees “the same security” that traditional currencies have. “Imagine a world where everything runs on stablecoins that are suitable for specific assets, such as sovereign bonds. If there is a crisis, who will provide liquidity? The central bank. It is the central bank that has that function, because it has the potential to create unlimited money,” Escriva stressed to Botín.
linked to real currency
In this field, we believe it is essential that stablecoins are both digital currencies and, at the same time, pegged in whole or in part to real currencies. “The link to the currency is what guarantees its stability,” explains Francisco Maroto, Head of Blockchain and Digital Assets at BBVA. He further added, “The value of a virtual currency is typically volatile as it depends on market demand and supply. On the other hand, the value of a stablecoin is closely tied to the traditional currency with which it is associated. This increases user trust, knowing that each user has equal support from real money or other safe assets. In effect, they can convert to euros whenever they want.” “Furthermore, this makes it possible to integrate stablecoins into the financial system, since stablecoins can be used for the day-to-day operations I mentioned without adding the risk of value fluctuations,” concludes the head of digital assets at BBVA.
Caixabank officials are also pointing in the same direction. “Being linked to a currency like the euro ensures stability of value and avoids volatility. At the same time, it gives users peace of mind that the digital money is equivalent to the real euro and facilitates integration with the traditional financial system,” they explain.
Stablecoins will coexist with the digital euro and will be a different concept. “While the digital euro is issued by the European Central Bank (ECB), stablecoins are private initiatives regulated by MiCA,” the CaixaBank official mentioned above makes the distinction. “Furthermore, stablecoins can provide additional services, such as programmable payments. Both can coexist and complement each other in various applications: a digital euro as a public currency and a stablecoin as a flexible solution for digital payments.”
“The issuer of a stablecoin is usually a fintech or e-money entity, whereas the issuer of a central bank digital currency (such as the digital euro) is the central bank itself,” declares Coti de Monteverde, head of crypto assets at Grupo Santander. “And the money backing them is also different. For stablecoins, reserves are typically a combination of bank deposits and high-quality liquid assets such as short-term sovereign bonds that can be liquidated quickly. For currencies like the digital euro, they are backed by central banks themselves. In the case of stablecoins, there is a lot of regulation going on to make them as robust as possible. That risk depends on the entity issuing it and the quality of its reserves,” he explains.
And what do stablecoins mean for bank customers? “They allow real-time payments and transfers without relying on bank business hours or coordination between various intermediaries,” says Francisco Maroto. “The aim is that it can be used to speed up complex financial operations on blockchain networks, such as buying and selling bonds or tokenized stocks, or to speed up slow and expensive international payments,” added BBVA’s head of blockchain and digital assets. Meanwhile, Caixabank also cited the cost-saving capabilities of digital operations.
“Stablecoin success for customers is that they are unaware that this technology is being used, that payments are made instantaneously at low cost anywhere in the world, that they simply improve processes, that they have a stablecoin or digital currency that improves their user experience and improves their lives when performing operations,” argues Coti de Monteverde.
Risks of currencies launched by the private sector
Stablecoins are on the rise, with a market value of over $350 billion, which equates to more than 300 billion euros, as seen in the chart below.
American digital currencies such as Tether, US dollar, and Etena are the mainstream. And the sixth largest in terms of market value (approximately $3 billion) was issued by World Liberty Financial, a cryptocurrency company owned by Republican President Donald Trump and his sons Eric Jr. and Donald Jr.
It should also be taken into account that stablecoins, like other cryptocurrencies, are not without the risk of bankruptcy or bubbles. “Yes, there is a risk if there is not enough support or trust is lost,” Caixabank says. State-owned entities have therefore operated using stablecoins “backed by the euro, MiCA regulations, and banking supervision to avoid scenarios such as the collapse of other cryptocurrencies.”
“Volatile cases, such as the bankruptcy of the Terra/Luna algorithmic stablecoin, occurred in projects without oversight or transparency,” Francisco Maroto said. “A well-supported and regulated stablecoin should not cause bubbles and bursts like other cryptocurrencies, because its value is tied to currency and covered by real assets. MiCA requires audited and managed reserves to ensure safe use, so the risk of bankruptcy is minimal. The risk for the company issuing it is that it will not be adopted, meaning no one will use it and the company will not survive.”
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