Santander’s move into stablecoins signals change in banking
Banco Santander, one of the world’s largest banking groups, is weighing up the idea of issuing its own stablecoin. The project, still in its early stages, could see the bank roll out digital tokens backed by either the US dollar or the euro. These tokens, known as stablecoins, are designed to hold a steady value, unlike more volatile cryptocurrencies like Bitcoin.
This move signals that major players in traditional banking are beginning to take stablecoins more seriously. With regulatory conditions in the United States now more favourable under President Donald Trump, other big banks – including JPMorgan, Citigroup, Wells Fargo and Bank of America – are reportedly considering similar ventures.
Image 1: Spain’s Santander explores stablecoin (Source: Crypto Economy)
Divided Views in the Banking World
Supporters of stablecoins say they could make financial systems faster, cheaper, and more inclusive. By offering a stable and easily transferable digital version of national currencies, stablecoins could make international payments smoother and bring financial services to people who are currently locked out of the banking system. Small businesses could also tap into global capital more easily, helping them grow beyond their local markets.
But despite the growing interest, not everyone in the sector is convinced. A number of traditional banks remain wary of the idea, especially when it comes to stablecoins that pay users interest. Some believe this would lure depositors away from standard savings accounts, potentially cutting into their profit margins.
US Senator Kirsten Gillibrand has publicly voiced her concerns. At a recent blockchain event in Washington, she argued that interest-bearing stablecoins could weaken the ability of banks to lend to small businesses and households. She believes that if people start parking their funds in digital assets that offer better returns, local banks could struggle to maintain their lending operations.
Bonuses vs Consumer Choice
Professor Austin Campbell from New York University sees the issue differently. In his view, the real fear among traditional banks isn’t about economic stability — it’s about protecting executive bonuses. Campbell says many banks operate under a model that relies on taking customer deposits without offering much, if any, interest. That money is then lent out, sometimes in risky ways, while top executives are paid handsomely.
When things go wrong, it’s often the customers who suffer losses, while the decision-makers remain insulated. Campbell argues that stablecoins offering even modest returns could shake up this outdated model and bring much-needed competition to retail banking.
He also points out that similar competition already exists through government-backed money market funds. These already manage trillions of dollars without causing chaos in the banking world. So, the idea that stablecoins pose a unique threat doesn’t quite hold up. Instead, Campbell believes the backlash is mostly about banks trying to shield their privileged position.
Rather than stopping innovation, Campbell says regulators should challenge banks to offer more value to their customers. One suggestion he floated was to require banks to either pay interest close to what the central bank offers or cap executive pay if they want to benefit from deposit insurance. That, he said, would reveal just how committed banks are to fairness and competition.
Image 2: Stablecoins (Source: Token Metrics)
A Turning Point for Traditional Banks
The debate over stablecoins is becoming a key moment for the financial industry. With Santander now exploring digital currency solutions, it’s clear that change is on the horizon. Whether this change will favour consumers or preserve the dominance of existing institutions depends on how governments and regulators respond.
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Some banks may resist, but others could see this as a chance to modernise and compete in new ways. If Santander moves ahead with its stablecoin plans, it could help pave the way for broader adoption among everyday users — not just crypto enthusiasts.
For now, the sector remains divided. But one thing is certain: digital finance is pushing forward, and the banks that fail to evolve may be left behind.
