• BBVA partners with Visa to launch a euro-backed stablecoin by 2025, focusing on tokenized asset settlement in Europe.

• BBVA explores money market funds and fiat currencies as backing options for its upcoming stablecoin, with final details yet to be confirmed.

• BBVA’s stablecoin strategy aims to expand its digital asset services in Europe, building on its existing Bitcoin and Ethereum offerings in Switzerland.

Spain’s second-largest bank, BBVA, has announced plans to launch a stablecoin in 2025, collaborating with Visa to enter the growing digital currency market. The initiative is currently in the sandbox phase of Visa's stablecoin project, with plans to transition to a prototype and operational phase next year. BBVA aims to leverage this development to enhance its digital payment solutions and expand its position in the growing blockchain sector.

https://twitter.com/WuBlockchain/status/1841814075250245965

Partnership with Visa to Enhance Stability

The partnership between BBVA and Visa stands out due to Visa's established presence in the digital payments industry. According to Francisco Maroto, BBVA's head of digital assets, the decision to collaborate with Visa over other stablecoin providers was driven by Visa's brand strength and regulatory expertise. 

This partnership is particularly strategic given the recent implementation of stablecoin regulations in Europe, providing BBVA with an advantage in navigating the regulatory sector. BBVA’s stablecoin is expected to be primarily euro-backed, focusing on settlement transactions for tokenized asset exchanges.

Stablecoin Backing and Use Cases

Though specific details regarding the asset backing of the stablecoin remain undecided, BBVA is exploring options such as money market funds, deposits, and fiat currencies like the U.S. dollar or euro. 

The primary use case for the stablecoin will be its integration as a settlement layer for digital exchanges, offering clients a secure and efficient method for conducting transactions. Maroto highlighted that the bank’s experience in digital assets, including its existing services offering Bitcoin, Ethereum, and USDC trading and custody in Switzerland, positions BBVA well for this expansion.

Broader Digital Asset Strategy

BBVA’s interest in digital assets is not new, as the bank has been exploring blockchain technology since 2014. The stablecoin launch is a part of BBVA’s broader strategy to capitalize on the increasing demand for asset tokenization, particularly in private credit and real estate sectors. 

Currently, BBVA operates digital asset services in Switzerland and plans to extend these offerings to Turkey. However, the bank has no immediate plans to launch U.S. operations for the stablecoin, focusing instead on its European market.