Santander Bank, Spain’s largest financial institution with over $1.8 trillion in assets, is reportedly planning to launch its own stablecoin and expand crypto services through its digital banking arm, Openbank.
This development, announced in May 2025, signals a groundbreaking shift in the financial landscape. This is because several traditional banking giants are increasingly embracing blockchain technology.
Many analysts believe Santander’s entry into the stablecoin market, dominated by Tether’s USDT, Circle’s USDC, and PayPal’s PYUSD, could intensify competition. This could increase the total market capitalisation of the stablecoin market and drive broader adoption in Spain and globally.
But how will the move impact the stablecoin ecosystem? Could it inspire other financial institutions to follow suit?
In this article, CryptoGuide GH dives into the details and analyses the potential impact of this move.
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Santander’s stablecoin ambitions are a strategic leap
Santander’s potential stablecoin, expected to be pegged to either the euro or the U.S. dollar, aligns with a growing trend among global banks to integrate digital currencies into their offerings.
Unlike volatile cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), stablecoins maintain a steady value by being backed by fiat currencies or other assets. This makes them ideal for payments, remittances, and cross-border transactions.
Santander’s move aims to leverage its 175 million-plus customer base to offer retail crypto trading and stablecoin services. The financial institution will be able to achieve this in compliance with the European Union’s Markets in Crypto-Assets (MiCA) regulations.
This strategic leap positions Santander to bridge traditional finance (TradFi) and blockchain technology. By issuing a stablecoin, the bank could streamline cross-border payments, reduce transaction costs, and enhance liquidity management. These are key advantages in a globalised economy.
Moreover, Santander’s established reputation and vast network provide a competitive edge, potentially attracting both retail and institutional users.
However, the bank faces a crowded market dominated by established players. Let’s examine how Santander compares to Tether’s USDT, Circle’s USDC, and PayPal’s PYUSD in the stablecoin market.
Can Santander Bank challenge Tether (USDT)?
Tether’s USDT, with a market capitalisation exceeding $150 billion as of May 2025, holds a commanding 60% share of the stablecoin market.
Its dominance stems from widespread adoption in crypto trading, decentralised finance (DeFi), and cross-border payments.
Despite the positives, USDT has been criticised for its lack of transparency in reserve practices. Notably, Tether Limited received a $41 million fine from the U.S. Commodity Futures Trading Commission (CFTC) in October 2021. The fine was for misleading statements about Tether’s fiat backing. Such cases can open the door for Santander to capitalise on this regulatory gap.
Santander’s stablecoin could differentiate itself by prioritising transparency and regulatory compliance, particularly under MiCA’s stringent requirements.
By offering audited reserves and robust consumer protections, Santander might appeal to risk-averse users and institutions wary of USDT’s controversies.
Additionally, Santander’s integration with Openbank could enable seamless stablecoin transactions within its ecosystem. This could rival USDT’s ubiquity in crypto exchanges. With more than two million across Europe and more than 100,000 in the United States, Santander Bank’s stablecoin, whether in USD or EUR, could reach millions of users worldwide.
However, displacing USDT’s entrenched market share will be challenging, given its liquidity and global acceptance. Santander’s success hinges on building trust and leveraging its banking infrastructure to offer competitive transaction speeds and fees.
Santander and Circle’s USDC: A Battle for Institutional Trust
Circle’s USDC, with a market cap of approximately $61.5 billion, is the second-largest stablecoin, commanding a 25% market share. USDC has gained traction among institutional investors due to Circle’s commitment to regulatory compliance and transparent reserve reporting.
Its partnerships with major financial players, such as BNY Mellon and Visa, have solidified its role in bridging traditional finance and blockchain.
Santander’s entry could intensify competition, particularly in the institutional space. As a global banking giant, Santander brings credibility and scale that could rival USDC’s institutional appeal. If Santander’s stablecoin is euro-backed, it could carve out a niche in the European market, where USDC’s U.S. dollar peg may be less appealing.
Furthermore, Santander’s potential to integrate its stablecoin with existing banking services, such as corporate treasury management, could attract businesses seeking efficient cross-border solutions.
However, USDC’s established partnerships and compatibility across major blockchains like Ethereum and Solana give it a head start.
Santander must invest in blockchain interoperability and forge strategic alliances to compete effectively. By offering lower transaction fees or innovative use cases, such as tokenised deposits, Santander could challenge USDC’s dominance in the institutional sector.
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Rivalling PayPal’s PYUSD: A clash of ecosystems
Launched in August 2023, PayPal’s PYUSD has a market capitalisation of approximately $950 million. This is significantly smaller than that of rivals, USDT and USDC.
Despite its smaller size, PYUSD benefits from PayPal’s massive user base of over 400 million and its focus on seamless integration within its payment ecosystem.
PayPal’s recent move to offer a 3.7% yield on PYUSD holdings further incentivises adoption, particularly for retail users.
Santander, with its 175 million customers, presents a formidable rival to PayPal’s ecosystem. By offering a stablecoin tailored to European users, Santander could capture market share in regions where PYUSD’s U.S. dollar peg is less relevant.
Additionally, Santander’s banking infrastructure allows it to integrate stablecoin services with traditional financial products. Savings accounts or loans are part of these traditional financial products. In the long term, they could potentially outpace PYUSD’s retail appeal.
Nevertheless, PYUSD’s first-mover advantage in the fintech space and partnerships with platforms like Coinbase give it an edge in accessibility.
Santander must prioritise the user experience, offering intuitive interfaces and low-cost conversions to compete with PYUSD’s retail-friendly approach. By utilising Openbank’s digital platform, Santander could draw in crypto-curious users. This situation arises despite Santander facing the challenge of competing with PYUSD’s established foothold in the U.S. market.
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Santander impact on stablecoin market capitalisation
The stablecoin market, valued at $250 billion in June 2025, is projected to reach $2.8 trillion by 2028, according to Bernstein Research. Santander’s entry could accelerate this growth by increasing institutional and retail adoption.
A bank-backed stablecoin carries inherent trust. This could potentially draw new users who were hesitant to engage with crypto-native issuers like Tether or Circle. This influx of users could boost overall market capitalisation, particularly if Santander’s stablecoin gains traction in Europe.
Moreover, Santander’s move could reduce barriers to entry for stablecoin adoption. By embedding its stablecoin into Openbank’s digital platform, Santander can provide a smooth onboarding experience for retail users. In the long term, this could massively boost transaction volumes.
For example, stablecoins like USDC have demonstrated cost savings in cross-border payments. There are several instances where transaction fees were as low as $0.00025 on efficient blockchains like Solana. The transactional fees of mainstream players, ranging from $25 to $50 for traditional SWIFT transfers, cannot compare to this insignificant sum.
If Santander replicates this efficiency, it could capture significant market share, further expanding the stablecoin market.
Santander move could boost stablecoin adoption in Spain
Digital payments are already prevalent in Spain. Santander’s stablecoin could significantly enhance the use of digital currencies.
A euro-backed stablecoin would resonate with Spanish consumers and businesses, offering a stable alternative to volatile cryptocurrencies for everyday transactions. Openbank’s digital-first approach could make stablecoin payments accessible to millions. This could lead to potential integrations with merchants and peer-to-peer (P2P) platforms.
Additionally, Spain’s regulatory environment, bolstered by MiCA, provides a clear framework for stablecoin issuance, reducing risks for users. Santander’s reputation as a trusted institution could alleviate concerns about fraud or reserve mismanagement. This could encourage adoption among Spain’s 47 million residents.
For businesses, a Santander stablecoin could streamline remittances and B2B payments, addressing inefficiencies in traditional banking systems.
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Santander triggering a wave of bank-backed stablecoins
Santander’s move could set a precedent for other financial institutions. Banks like JPMorgan (JPM Coin), Société Générale (EURCV), and Standard Chartered (Hong Kong dollar stablecoin) have already entered the stablecoin space, signalling a broader trend.
If Santander’s initiative succeeds, it could prompt competitors like BBVA or Deutsche Bank to launch their stablecoins to remain competitive.
This domino effect could reshape the financial industry as banks leverage stablecoins to modernise payment systems and tap new revenue streams.
However, challenges remain, including regulatory compliance, technological integration, and consumer trust.
MiCA’s requirements, such as holding 60% of reserves in European banks, could complicate launches for smaller institutions. Despite this, major players with robust infrastructure are well-positioned to follow Santander’s lead.
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Conclusion: Is Santander’s move a catalyst for change?
Santander’s planned stablecoin launch marks a pivotal moment for the crypto and financial sectors. By competing with USDT, USDC, and PYUSD, Santander could disrupt the stablecoin market, driving innovation and adoption.
Its focus on transparency, regulatory compliance, and integration with Openbank positions it to challenge established players, particularly in Europe.
In Spain, a euro-backed stablecoin could transform digital payments, while globally, Santander’s move may inspire other banks to embrace blockchain technology.
As the stablecoin market surges toward a projected $2.8 trillion, Santander’s entry could be a catalyst for a new era of digital finance. This is because it blends the stability of traditional banking with the efficiency of digital assets.
