Santander Explores Stablecoin Launch Amid Latin American Demand

Banco Santander SA, the largest bank by market capitalization in continental Europe, is in the early stages of exploring the launch of a stablecoin and expanding its retail cryptocurrency offerings through its digital banking unit. The stablecoin initiative could involve either a proprietary token issued by the bank or a platform that provides access to existing stablecoins, with the potential to be pegged to either the euro or the US dollar.

In Latin American countries facing economic volatility, dollar-based stablecoins like USDT and USDC are becoming increasingly popular as a hedge against weakening local currencies. Nations such as Argentina, Brazil, and Mexico, where Santander has a significant customer base, are leading this trend due to inflation, devaluation, and the need for efficient remittances.

For its retail services, Santander is considering the rollout through Openbank, its digital banking subsidiary. Openbank has applied for licenses under the EU’s Markets in Crypto-Assets Regulation (MiCA) framework to offer crypto trading services to retail clients. If approved, the platform could launch as early as this year in markets such as Spain, Germany, Portugal, and the Netherlands.

Santander has shown a strong interest in blockchain technology since its early development stages, and this interest has only intensified over time. The bank’s venture arm has previously invested in pioneering blockchain startups, including Ripple and Digital Asset Holdings. Santander was also the first UK bank to utilize blockchain for international retail payments, launching a Ripple-enabled app in 2019 that facilitated same-day cross-border transfers for customers in multiple countries.

Most recently, Santander Corporate & Investment Banking (CIB) executed its first EUR intraday repo and a USD term repo on the Digital Financing Application via Kinexys Digital Assets, JPMorgan’s digital asset platform for tokenized financial products. This move reflects the growing momentum among banks to develop regulated stablecoin products, driven by legislative progress in both the EU and the US, and a stablecoin market that has recently exceeded $250 billion.