Banco Santander is exploring the development of a fiat-backed stablecoin and expanding its crypto offerings to retail clients, marking a potential new chapter in the bank’s digital asset strategy.
According to a May 29 Bloomberg News report, the initiative, still in its early stages, may include both US dollar and euro-pegged tokens.
Santander joins a cohort of major global banks, including JPMorgan and Citigroup, reassessing their role in the evolving digital currency landscape, following favorable regulatory shifts under President Donald Trump’s administration.
The bank’s digital subsidiary, Openbank, has applied for licenses to offer retail crypto services under the European Union’s Markets in Crypto-Assets (MiCA) regulation.
The move aligns with Santander’s strategy to expand its digital asset offerings and reflects a broader trend among European banks to engage with regulated crypto services.
The resurgence of interest in private stablecoins is tied to broader goals: strengthening the dollar’s global reach, improving payment infrastructure, and opening financial access to underserved communities.
EU regulators divided
However, while proponents see stablecoins as tools for innovation and inclusion, some traditional banking stakeholders remain wary.
The European Central Bank (ECB) has warned that the increasing presence of dollar-denominated stablecoins could undermine the euro’s dominance in the EU’s financial system.
ECB President Christine Lagarde has called for revisions to the MiCA regulation, arguing that the current framework may not sufficiently address the risks posed by these stablecoins.
Additionally, the ECB fears that a surge in dollar-backed stablecoins could shift European capital into US assets, potentially destabilizing EU banks and financial markets.
In contrast, the European Commission has downplayed these concerns, asserting that the existing MiCA regulations are robust enough to manage the risks associated with stablecoins.
Commission officials have emphasized that MiCA provides regulators with the authority to intervene if stablecoin issuers threaten financial stability. They argue that the ECB’s warnings may be overstated and that the current legal framework is adequate.
Santander’s deliberations signal growing acceptance of digital assets within traditional finance. Whether the bank ultimately launches a stablecoin or broadens crypto services to retail users, its actions could influence how other institutions navigate the emerging regulatory environment.