According to a Bloomberg reportcrypto trading platform Robinhood and financial technology company Revolut are exploring the launch of their own stablecoins. The potential move by Robinhood and Revolut comes amid increasing pressure from regulators in Europe, which could reduce the dominance of Tether, the market’s largest stablecoin issuer.
Tether and Circle are preparing for regulatory changes
Several startups have tried to challenge Tether’s USDTwhich has maintained a strong position in the stablecoin market, with a mintage of almost $120 billion – more than two-thirds of the total market.
In contrast, its closest competitor, USDC, published by Circle Internet, has a circulation of approximately $36 billion. Despite numerous attempts to gain market share, most challengers have struggled to make significant progress.
Despite this, the report notes that the landscape is changing as the European Union prepares to implement extensive regulations known as the Markets in Crypto-Assets (MiCA) frame by the end of the year, which could be one of the potential catalysts for both Robinhood and Revolut to enter the stablecoin space.
These regulations could force crypto exchanges in the EU to remove stablecoins from issuers like Tether that do not have the necessary licenses, creating an uncertain environment for Tether and its operations.
Circle has already secured the required EU license and is positioning itself in an advantageous position as regulations tighten. The company has even confidentially filed for a U.S. filing initial public offering (IPO), demonstrating confidence in the regulatory landscape.
However, Tether’s CEO, Paolo Ardoinohas expressed concern about the risks that EU regulations could entail, especially in mass redemption scenarios. 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 has stated that it has “no imminent plans” to launch a stablecoin, Revolut, on the other hand, has expressed its intention to expand its operations. crypto product offers. The potential for profitable ventures is significant; Tether reported that it earned $5.2 billion from its reserves in the first half of 2024, illustrating the lucrative nature of this business model.
Nevertheless, experts warn of possible “hyper-fragmentation” of the market as competition increases in the stablecoin world. Nuri Chang, head of product at BitGo, noted that various financial applications can develop their own applications stable coinsleading to 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 phase of this regulationswhich will cover all crypto platforms is expected to provide a clearer compliance framework.
Exchanges such as OKX, Uphold, and Bitstamp have already started delisting Tether’s stablecoins in anticipation of these regulations, creating competitive disadvantages for those who still support Tether. It remains to be seen whether Robinhood and Revolut will seize this opportunity to finally enter this sector of the market.
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