Revolut Sizes Up Stablecoin Entry
London-based fintech giant Revolut reportedly prepares to enter the league of companies offering a stablecoin. The company will, therefore, join in the competition to share in the $171 billion-growing stablecoin market that might give a boost to the company’s crypto offerings. It remains unclear whether the new digital token will be pegged to the euro or U.S. dollar, while no timeline was disclosed on when it might go live.
Crypto Horizons at Large
With its long-time support for digital assets, it is not unexpected that the company would be interested in stablecoins. As early as 2017, it began supporting the trading of cryptocurrencies and has continued to increase its services related to crypto. More recently, in May, the company launched a crypto exchange for professional investors in Britain, while in June, the firm received a U.K. banking licence as part of its broader crypto expansion plans.
The Booming Stablecoin Market
The space has thus become an interesting hub for innovation, with stablecoin on-chain issuers like Tether minting enormous profits of $5.2 billion in the first half of 2024. Stablecoins have, however seen reasonable traction owing to their functionality in providing a fiat-pegged, low-volatility digital asset that finds utility in transactions, lending, and earning yield. Revolut’s foray into space might be a signal of its intent to capture a chunk of this lucrative market.
Regulatory Landscape and Competition
The regulatory environment of stablecoins is highly dynamic, going forward. In the U.S., for instance, lawmakers such as Patrick McHenry and Maxine Waters have led the charge on developing comprehensive stablecoin frameworks. Meanwhile, the European Union’s Markets in Crypto-Assets Regulation has opened a backdoor for issuers such as Circle’s USDC to operate across the EU. This puts Revolut in a corner of having to carefully toe the lines as it prepares its stablecoin for market.
The Way Forward
As Revolut eyes the stablecoin market, it waits to be seen whether the continuous revelation of the crypto strategy for the fintech bank’s stablecoin will peg with a major currency, such as the euro or U.S. dollar, or offer some kind of innovative model.
