Fintech giants Robinhood Markets and Revolut are reportedly exploring the potential to enter the $173 billion stablecoin market, according to a recent report from Bloomberg. Both companies are said to be considering launching their own stablecoins, although no official confirmation has been made yet.
Sources familiar with the situation told Bloomberg that while the two firms are exploring the idea, they may still decide not to proceed with launching stablecoins. The development comes as the European Union nears full implementation of its Markets in Crypto-Assets (MiCA) regulations, a significant move that could reshape the landscape of digital currencies in Europe.
Challenging Tether’s Dominance
The potential entrance of Robinhood and Revolut into the stablecoin sector is seen as part of a broader push to loosen Tether’s strong grip on the market. Tether (USDT), the largest stablecoin by market capitalization, currently controls over two-thirds of the market, with a circulation of nearly $120 billion. According to DefiLlama data, Tether holds a market dominance of 69.14%.
Tether’s continued growth has been impressive, with the company reporting a record-breaking $5.2 million profit in the first half of 2024. Additionally, Tether’s US Treasury portfolio is valued at approximately $97.6 billion, underscoring its significant influence in the stablecoin space.
Despite this dominance, the introduction of new players like Robinhood and Revolut could intensify competition and diversify options within the market. Both companies are known for their user-friendly platforms and vast customer bases, which could help drive the adoption of new stablecoins.
MiCA Regulations and Concerns for Stablecoins
The potential move by Robinhood and Revolut comes at a time when the EU is preparing to enact the MiCA regulations, aimed at regulating the crypto asset market, including stablecoins. While some see the regulations as a way to promote innovation and consumer protection, others, like Tether’s CEO Paolo Ardoino, have voiced concerns. Ardoino warned that MiCA could pose systemic risks to both stablecoins and the broader banking system, though he noted that Tether is working on a technology-based solution to address these challenges in the European market.
Robinhood and Revolut’s Cautious Approach
Although both fintech companies are reportedly exploring the stablecoin market, neither has committed to launching a product. A spokesperson from Robinhood stated that there are “no imminent plans” to launch a stablecoin offering, while a Revolut executive mentioned that the company is planning to “further grow” its crypto product lineup but has made no official announcements regarding a stablecoin.
This cautious approach mirrors the companies’ broader strategy in the crypto space. In July, Robinhood announced its plans to explore cryptocurrency futures trading in both the U.S. and Europe, though the company has stated that there are no immediate plans for such an offering.
As the stablecoin market continues to evolve and regulatory frameworks like MiCA come into play, the potential entry of Robinhood and Revolut could signal a new phase of competition and innovation in the cryptocurrency space.
