BBVA is the latest financial giant to enter the crowded field of stablecoins, with the Spanish bank set to launch its own digital asset next year with support from Visa. Francisco Maroto, head of digital assets and blockchain at BBVA, said in an interview with Fortune that the bank is currently in the sandbox phase of its new Visa program to help companies launch their own tokenized assets. He said he hopes to reach the prototype stage and actual operations by 2025. .
Maroto said BBVA has not yet decided whether the stablecoin will be backed by deposits, money market funds or fiat currencies such as the euro or US dollar, which the company will use for the exchange’s settlement layer. He added that this is the plan.
BBVA has been working in the digital assets space since 2014, and Maroto hopes the latest project will allow the bank to benefit from the growing trend of tokenizing assets such as real estate and private credit funds. “We realized that blockchain has the potential to transform the way we exchange value digitally and, as a result, impact how the financial system works,” Maroto said.
stablecoin wars
Stablecoins constitute a broad category in the cryptocurrency space and refer to assets that aim to maintain a specific price and are backed by reserves such as fiat currencies, commodities, or even other cryptocurrencies. Although the sector has been around for a decade, dollar-backed stablecoins such as USDC and Tether have exploded in popularity in recent years, with the companies backing them typically holding U.S. Treasuries and other assets. They earn huge profits through the yield of the underlying assets. Dollar equivalent.
More recently, traditional financial Competitors in the field are entering the race.
Last week, Visa announced a new product that allows financial institutions such as banks to issue their own stablecoins. Visa calls this a fiat-backed token. Use cases vary, but the idea is that banks choose the types of assets they hold in reserve. They range from fiat currencies to deposits. Although the token will initially only work within the bank’s own ecosystem, Visa’s head of crypto, Qui Sheffield, told Fortune in April that the long-term plan is to foster interoperability between different institutions. He said that. This is an advantage of more universal stablecoins like USDC. It can work across blockchains.
Maroto said BBVA wanted to work with Visa rather than choosing an existing stablecoin option due to Visa’s established brand and regulatory compliance. As one of the first financial institutions to experiment with the new product, BBVA also has the advantage of operating primarily in Europe, which has recently enacted oversight of stablecoins.
Maroto said that given its presence in Europe, BBVA is likely to build a stablecoin around the euro, and that BBVA will be responsible for the minting and burning mechanisms that convert fiat currencies into the cryptocurrency ecosystem. , said it could be used for payments on exchanges that offer tokenized assets.
Despite the goal of starting live testing next year, Maroto said the U.S. is not a short-term plan. BBVA currently offers Bitcoin, Ethereum and USDC storage and trading for private banking and institutional clients in Switzerland, and will launch the service in Turkey.
