Spain is Fast Becoming a Blockchain Hub

Spain probably isn’t the first name that springs to mind when crypto-friendly nations are discussed. Instead, you’re more likely to think of El Salvador, a country that recently made bitcoin legal tender, or Singapore, where crypto funds aren’t subject to taxation. But overlooking Spain would be a mistake. 

Why Spain is Going Loco for Crypto

Despite criticisms levelled at El Salvador by the country’s central bank, the largest nation in Southern Europe supports a thriving crypto community and a range of blockchain-focused startups, most of them concentrated in the capital Madrid but also in Barcelona, Malaga and Valencia. 

Earlier this year, Spain’s second-largest bank, BBVA, launched a bitcoin trading and custody service for private clients in Switzerland, reflecting what it called “significant desire” among investors for digital assets to diversify their portfolios.

And BBVA isn’t the only major Spanish entity to dip its toes into crypto: Prosegur, a 45-year-old publicly-traded security company that manages over $400 billion in assets, recently unveiled its own Crypto division.

So, why Spain? And more to the point, why is the country overlooked despite its growing crypto credentials?

There are, to be sure, several factors. The most important being that the government is actively pursuing a digital transformation of the financial system, complete with its own fintech ‘sandbox.’ Against the backdrop of this favorable legislative picture, some 120 crypto companies are registered and operating in the country, employing over 1,100 people. Spain also ranks fifth in the world for the number of cryptocurrency ATMs with 150 – just 9 less than the UK.

In truth, Bitcoin might not make the best medium of exchange – which is why the El Corte Inglés department store chain has just launched its own cryptocurrency named Bitcor. The token is expected to become the de-facto payment method of the chain’s 11.5 million debit card holders, integrating fully into a financial services suite that includes consumer credit and insurance. Given that El Corte Inglés’ revenue is around €15 billion, their move into crypto could be a portent of things to come.

Of course, when reviewing the crypto landscape in Spain we must consider Latin America. Spain’s links with the rest of the Spanish-speaking world mean that startups who find success in South or Central America will inevitably explore opportunities in Europe – and where better than Spain? Indeed, Argentina’s Ripio – which recently raised $50m in a Series B funding round – plans to start operating in Spain early next year, having already attracted two million users in Argentina and Brazil. Incredibly, Latin American crypto startups raised $517 million from VC funding during the first six months of this year alone.

“One thing I’ve noticed about the Spanish crypto community is that they are incredibly passionate,” says Vedran Vukman, CEO of subscription management platform Revuto. 

“Our Spanish Telegram channel is one of our fastest-growing, and Spain is our second largest investor market. Although much depends on how the regulatory environment evolves over the long term, I would expect more crypto startups and investors to set up base in the Iberian Peninsula.” 

That seems like a fair bet: recent research suggests that 4 in 10 Spaniards between the age of 25 and 40 will enter the crypto market in the coming month, with 2 in 10 having already done so.

Spanish Giant Set to Battle Custody Heavyweights

Speaking of investment, one of Spain’s biggest and most successful companies is aiming to flex its muscles in the hyper-competitive crypto custody space. 

The aforementioned Prosegur, which designs security solutions for banks, businesses and households and employs a global workforce of over 160,000, has developed an all-in-one solution to minimize digital and physical risks in the digital asset custody chain. 

The product, dubbed Crypto Bunker, represents a high-security option for the institutional storage and management of digital assets on behalf of clients such as hedge funds and treasuries. Comprising digital and physical measures – multi-party computation (MPC), air-gapped cold vaults, armed security personnel and biometric access – Crypto Bunker is a shot across the bows at the dominant players in the custody space, not least the likes of BitGo, Coinbase and Anchorage.

Headquartered in Madrid since 1976, Prosegur isn’t an edgy startup riding the crypto wave: it’s a major, capital-rich conglomerate that is branching into crypto custody to open up a new revenue stream. How many major Spanish companies might take notice and follow suit?