Regulation executes regulatory move in regulatory

Regulatory Convergence and Crypto Adoption in Europe and Latin America

Deal Background

The 2025 edition of the Merge Madrid conference brought together over 3,000 attendees and 200 international experts to discuss the institutional adoption of crypto assets, European regulation under MiCA, and the technological convergence between Europe and Latin America. The event highlighted the diverse strategies being pursued by European banks as they navigate the evolving crypto landscape.

Buyer and Seller Motivations

• BBVA announced plans to develop its own stablecoin by 2026 as part of its strategy to become a global crypto platform. This move aligns with the bank’s existing cryptocurrency trading and custody offerings, as well as its ambitions to provide tokenization and stablecoin payment solutions.
• Other banks, such as CaixaBank and ING, are opting for associations to launch joint stablecoins, reflecting the diversity of approaches in the region.
• Unicaja took a more conservative stance, ruling out offering cryptocurrencies like Bitcoin or Ether to retail customers and emphasizing the importance of trust in banking.

Sector and Market Signals

The event highlighted the ongoing regulatory developments in Europe, particularly the full implementation of the Markets in Cryptoassets Regulation (MiCA). This has accelerated the entry of European banks into the digital asset sector, with Spain serving as a starting point for international expansion.

Representatives from the Spanish Securities and Exchange Commission (CNMV), the European Banking Authority, and the Chilean Financial Market Commission discussed the need to harmonize criteria and coordinate supervision to avoid regulatory arbitrage across Europe.

The event also focused on user experience and interoperability between financial systems, emphasizing the importance of facilitating seamless transitions between traditional banking and digital assets.

Implications for Private Equity

The regulatory convergence and technological integration between Europe and Latin America present opportunities for private equity investors to capitalize on the evolving crypto and fintech landscape. Firms may seek to invest in or partner with banks, fintechs, and startups that are well-positioned to navigate the changing regulatory environment and deliver innovative financial solutions.

Immediate Outlook

The event highlighted the priority of maintaining financial stability and the functioning of the payment system as innovations such as the digital euro and stablecoins are developed. While the proportion of supporting assets deposited in banks helps mitigate risks, the final impact still requires close monitoring.

Key Takeaways

• European banks are pursuing diverse strategies to enter the crypto and digital asset space, with some developing their own stablecoins and others opting for collaborative initiatives.
• Regulatory convergence and harmonization, particularly through the implementation of MiCA, are accelerating the integration of traditional finance and crypto-based solutions.
• Interoperability and user experience are crucial as customers seek seamless transitions between traditional banking and digital assets, presenting opportunities for private equity investors.

Sources

• 150sec