BBVA Teams with Visa for Stablecoin Launch in 2025, Eyeing the Future of Digital Asset Settlement
BBVA, one of Spain’s leading financial institutions, is set to enter the expanding stablecoin market by 2025, partnering with Visa to launch its own digital asset. The move follows BBVA’s longstanding involvement in digital assets and aims to capitalize on the growing trend of asset tokenization.
Visa Partnership: The Path to Tokenization
BBVA’s head of digital assets and blockchain, Francisco Maroto, revealed that the bank is currently in the sandbox phase of Visa’s new stablecoin program, designed to help institutions develop and launch tokenized assets. The project is expected to reach the prototype stage and live activity by 2025. While the bank has yet to finalize whether its stablecoin will be backed by deposits, money market funds, or fiat currencies such as the euro or U.S. dollar, the asset will be used as a settlement layer on exchanges.
Why Stablecoins?
Stablecoins have rapidly gained popularity as a means of maintaining stable value within the volatile cryptocurrency market. They are typically backed by reserves like fiat currencies or commodities. Dollar-backed stablecoins such as USDC and Tether have led the market, earning substantial profits through their backing in U.S. Treasuries and other dollar-equivalent assets. Financial giants such as PayPal have already entered this competitive space, launching their PYUSD stablecoin in 2023.
Leveraging Visa’s Fiat-Backed Token Program
Visa’s recently announced fiat-backed token program allows financial institutions like BBVA to launch their own stablecoins. These stablecoins, initially operational within the bank’s ecosystem, aim to facilitate cross-bank interoperability, a feature Visa intends to implement over time.
BBVA’s decision to collaborate with Visa instead of opting for an existing stablecoin platform stems from Visa’s well-established reputation and regulatory compliance. Operating mainly in Europe, BBVA also benefits from the region’s new stablecoin oversight, giving it an edge in regulatory adherence.
A Focus on Euro and Tokenized Asset Settlements
BBVA’s stablecoin is likely to revolve around the euro, aligning with its strong European presence. The stablecoin will serve as a settlement mechanism for exchanges offering tokenized assets such as real estate and private credit funds. BBVA will manage the minting and burning process, converting fiat into digital currency and back, thereby enhancing its role in digital asset transactions.
Although BBVA’s stablecoin plans focus on Europe, the bank is also involved in the custody and trading of Bitcoin, Ethereum, and USDC in Switzerland. Expansion to Turkey is also on the horizon, but a U.S. launch is not on the immediate roadmap.
BBVA’s upcoming Visa-backed stablecoin launch marks a significant step in its digital asset strategy, positioning the bank at the forefront of tokenized asset settlement. With Visa’s expertise and regulatory backing, BBVA’s stablecoin could become a key player in the stablecoin wars, especially within Europe.