As a seasoned researcher with years of experience delving into the intricacies of the financial sector and blockchain technology, I find BBVA’s decision to enter the stablecoin market through a partnership with Visa both exciting and strategic.
BBVA, the second-largest bank in Spain, plans to join the crowded stablecoin market, primarily controlled by Tether and Circle, via collaboration with Visa, a worldwide leader in payment solutions.
On Thursday, Francisco Maroto, BBVA’s lead for digital assets and blockchain, disclosed in a conversation with Fortune that the bank has joined Visa’s recently initiated sandbox project.
Visa Unveils New Tokenized Asset Platform
Introduced to the market is the Visa Tokenized Asset Program, or VTAP, a new initiative from Visa. This platform aims to equip banks with the necessary resources, including tools and expertise, for securely creating, transferring, and settling digital assets on both public and private blockchain networks.
As stated by Visa, the VTAP (Visa Token Service API) can be utilized by central banks and financial service providers aiming to develop their own digital tokens, encompassing stablecoins and Central Bank Digital Currencies (CBDCs).
Initially, the program commenced with BBVA playing a role as a trial participant. Already, the financial institution has been exploring the creation of its own digital token. Maroto stated that the bank intends to progress to the prototype stage by 2025, and if all goes according to plan, they will release their stablecoin later in the same year.
BBVA chose to participate in Visa’s sandbox program, primarily drawn by Visa’s robust standing and its commitment to abiding by regulatory requirements.
BBVA Joins the Growing Stablecoin Market
As a researcher, I find myself documenting the recent entry of a Spanish bank into the burgeoning stablecoin market. This move mirrors that of Revolut, a digital banking pioneer based in the United Kingdom.
Maroto explained to Fortune that upon its release, the stablecoin will exclusively serve for settling transactions on cryptocurrency exchanges and various digital asset marketplaces.
BBVA hasn’t made up its mind about what type of assets will back its proposed stablecoin. It could be either the European euro for local transactions or the U.S. dollar for international transactions. However, given its strong presence in Europe, the bank seems inclined towards a euro-backed stablecoin.
No matter what happens, this digital currency, functioning as a stablecoin, is crafted to keep its worth consistent, even during periods known as “crypto winter.
BBA to Exclusively Mint the New Stablecoin
According to BBVA’s head of digital assets, it has been confirmed that their stablecoin can be traded on platforms specializing in tokenized assets. However, only BBVA retains the exclusive ability to produce this token. Furthermore, BBVA will manage other crucial tasks like the conversion process from fiat currency to cryptocurrency within its system, which includes a mechanism for burning (or removing) tokens.
Regarding accessibility, it’s worth mentioning that this new stablecoin will initially be accessible only to BBVA’s European clientele. Notably, there are currently no plans to extend the availability of this digital asset to markets outside Europe, such as the United States, according to Maroto’s statements.
Previously, BBVA had already ventured into the cryptocurrency market. Currently, they have a significant role in this sector, as they offer both private banking and institutional clients in Switzerland the opportunity to buy, sell, and exchange Bitcoin (BTC), Ethereum (ETH), and USDC stablecoins. Moreover, they provide custody services for these digital assets as well.
Maroto went on to disclose that, given BBVA’s strong presence in the European cryptocurrency industry, this bank’s entry into the stablecoin market would enable them to capitalize on the escalating movement towards digitizing assets like real estate and private investment funds.
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2024-10-04 00:43