According to Bloomberg a reportCryptocurrency trading platform Robinhood and fintech company Revolut are exploring launching their own stablecoins. The potential move from Robinhood and Revolut comes amid mounting pressure from regulators in Europe, which could dilute the dominance of Tether, the largest stablecoin issuer in the market.
Cord and Circle are preparing for organizational changes
Many startups have tried to challenge Tether USDTwhich has maintained its stronghold in the stablecoin market, with trading approaching $120 billion – more than two-thirds of the total market.
In contrast, its closest competitor, USDC, issued by Circle Internet, has a trading volume of about $36 billion. Despite numerous attempts to gain market share, most competitors struggle to make significant inroads.
Despite this, the report notes that the landscape is changing, as the European Union prepares to implement comprehensive regulations known as Markets in Cryptoassets (MiCA). range By the end of the year, which could be one of the possible catalysts for both Robinhood and Revolut to enter the stablecoin space.
These regulations could force EU cryptocurrency exchanges to divest stablecoins from issuers like Tether that lack the necessary permits, creating an uncertain environment for Tether and its operations.
Circle has already obtained the required EU license, putting itself in an advantageous position as regulations tighten. The company even made a secret application to the United States Initial public offering (IPO), indicating its confidence in the regulatory landscape.
However, Tether CEO said, Paolo ArduinoHe expressed concerns about the risks that EU regulations could pose, especially in scenarios involving mass recalls. Tether is now exploring a “technology-based solution” to adapt to the EU market, although it does not currently have an e-money license in the region.
Robinhood and Revolut Eye Stablecoin Opportunities
While Robinhood stated that it had “no imminent plans” to launch a stablecoin, Revolut, on the other hand, expressed its intention to expand its business. Encryption product Offerings. The potential for profitable ventures is great; Tether reported earning $5.2 billion on its reserves in the first half of 2024, demonstrating the lucrative nature of this business model.
However, as competition in the stablecoin space intensifies, experts warn of the potential for “hyper-fragmentation” of the market. Nori Zhang, head of product at BitGo, noted that different financial applications may develop their own applications stablecoinsResulting in seamless transactions that users may not even notice.
MiCA regulations, already partially in place, require stablecoin issuers to obtain an e-money license and ensure that a significant portion of their assets are held in independent banks. The second stage of this Systemswhich will cover all cryptocurrency platforms, is expected to provide a clearer compliance framework.
Exchanges like OKX, Uphold, and Bitstamp have already begun delisting Tether stablecoins in anticipation of these regulations, creating competitive disadvantages for those still supporting Tether. It remains to be seen whether Robinhood and Revolut will seize this opportunity to finally enter this market segment.
Featured image of DALL-E, chart from TradingView.com
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