Santander Considers Retail Crypto Expansion and Stablecoin

The bank is considering both USD- and euro-pegged stablecoins to help modernize payments and boost financial inclusion. This development aligns with the momentum behind the GENIUS Act,which is a bipartisan US bill that seeks to regulate stablecoins by enforcing 1:1 dollar backing, AML compliance, and reserve asset protections. If passed, the act could reinforce the US dollar’s dominance in digital finance. Meanwhile, India is expanding its digital rupee trials by focusing on programmability and offline use cases to increase accessibility. These global moves suggest stablecoins and CBDCs are becoming core pillars of the future financial infrastructure. Santander Eyes Stablecoin Launch Banco Santander SA, one of the world’s leading global banking institutions, is reportedly considering expanding its cryptocurrency services to retail clients, including the potential launch of its own stablecoin. The move is part of a trend among major financial institutions toward embracing blockchain-based financial products in light of a changing regulatory climate in the United States. According to a May 29 Bloomberg report , Santander is exploring both US dollar and euro-pegged stablecoins, although plans are still in early development. This latest development places Santander alongside other major US banks— like JPMorgan, Citigroup, Bank of America, and Wells Fargo—that are reportedly exploring similar initiatives thanks to more favorable regulatory conditions under the administration of President Donald Trump. The shift in tone emboldened banks to consider launching fiat-pegged tokens that could accelerate payments, promote financial inclusion, and enhance global capital access for small businesses. Supporters of the trend argue that stablecoins can extend the global reach of the US dollar, streamline cross-border transactions, and democratize access to financial systems by banking the unbanked and reducing friction in traditional remittance flows. However, the broader banking industry is still quite divided on the issue. While some institutions view stablecoins as an opportunity to innovate, others fear they could erode traditional banking profits and market share, especially if these tokens begin offering interest-like yields. Overview of the stablecoin market (Source: RWA.xyz ) Banking lobbyists, supported by several US senators, have resisted legislation that will make it easier to issue or distribute yield-bearing stablecoins. This is mostly due to concerns over the destabilizing effects they could have on retail banking. Senator Kirsten Gillibrand spoke at the DC Blockchain Summit in March of 2025, and questioned whether allowing stablecoin issuers to pay interest might encourage depositors to abandon traditional banks, thus threatening their ability to provide loans to local businesses and households. NYU professor Austin Campbell argued that yield-bearing stablecoins disrupt the core mechanics of modern retail banking, particularly the low-interest deposit model that is foundational to the fractional reserve system. Campbell criticized efforts to curtail such products, and suggested that only entrenched interests stand to gain from blocking innovation. Stablecoin Bill Could Cement Dollar’s Digital Role The GENIUS Act is a pivotal piece of US legislation that is focused on stablecoins, and it could soon play a central role in boosting the US dollar’s dominance in the digital asset landscape. Short for Guiding and Establishing National Innovation for US Stablecoins, the bill seeks to provide regulatory clarity on how stablecoins are issued, backed, and governed, with particular focus on one-to-one collateralization with US dollars and strict compliance with Anti-Money Laundering laws. According to a May 29 report from Foresight Ventures, the act has the potential to cement the dollar’s status as the world’s preferred settlement currency in the Web3 era, as well as empower fintech companies to build secure, compliant financial tools. The bill advanced past a procedural vote in the US Senate on May 20 with a 66–32 margin, which suggests that it has good bipartisan momentum. However, it still awaits a full floor vote, and its final passage is not guaranteed. Earlier in May, the legislation encountered some resistance from key Democrats, prompting cautious optimism in the crypto industry. The GENIUS Act’s potential extends beyond the borders of the United States. Some industry leaders believe its implementation could serve as a global benchmark for digital asset regulation. Andrei Grachev , managing partner at DWF Labs and Falcon Finance, said that when the US takes a definitive step on stablecoin policy, the rest of the world tends to follow suit. Stablecoins are no longer viewed as experimental tools in the crypto ecosystem but as superior alternatives to traditional fiat money as they are faster, more efficient, and more transparent. The goal of the GENIUS Act is to safeguard that utility by introducing protective measures around reserve assets. The legislation will prohibit issuers from using reserves for purposes beyond redemption and a narrow list of low-risk investments, like US Treasury repos. These provisions are designed to prevent systemic risk and guard against the emergence of shadow banking practices in the stablecoin sector. If passed, the GENIUS Act could lay the foundation for a more stable and regulated digital dollar infrastructure. India Expands Digital Rupee Trials CBDC’s developments are also increasing around the globe. The Reserve Bank of India (RBI) plans to expand the scope of its digital rupee pilots by introducing new use cases and features to both the retail and wholesale versions of its central bank digital currency (CBDC). According to the RBI’s Annual Report for 2024–25 , the central bank is particularly focused on exploring programmability and offline functionality, which could make the digital rupee more versatile in regions with limited internet connectivity. These enhancements are expected to support use cases like government subsidies and corporate expenditure limits, helping to tailor digital payments to specific economic needs. Currently, the retail CBDC pilot is being tested with select customers and merchants through a network of participating banks and has already reached 600,000 users. To scale adoption even more, the RBI allowed certain non-bank entities to offer CBDC wallets. Meanwhile, the wholesale pilot is gaining traction within the interbank market and has recently expanded to include four standalone primary dealers. The growth of India’s broader digital payments ecosystem further supports this push into CBDCs. During the 2024–25 financial year, the country saw a 34.8% increase in the volume and a 17.9% rise in the value of digital payments. India also maintained its global leadership in real-time payments, with the Unified Payments Interface (UPI) accounting for 48.5% of global transaction volume. (Source: RBI ) Among its other recent innovations, the RBI pointed out the “Delegated Payments” feature, which allows a primary user to authorize another individual to make UPI transactions in a preset limit. The goal of this initiative is to widen digital payment access. India’s Supreme Court also renewed calls for comprehensive cryptocurrency regulation. On May 20, Justice Surya Kant criticized the government’s delayed action, despite the existence of a 30% tax on crypto profits since April of 2022.

Source: Coinpaper