Robinhood and Revolut consider entering stablecoin market

Robinhood and Revolut are reportedly considering launching their own stablecoins as the cryptocurrency market continues to evolve. 

According to a Bloomberg report published on September 26, unnamed sources suggest that these fintech companies are looking to expand their operations by entering the stablecoin market. 

This interest follows recent regulatory clarity in Europe that is expected to reshape the market landscape for crypto-native companies.

The stablecoin market is currently dominated by Tether’s USDT (CRYPTO:USDT), which has seen a significant increase in market share over the past two years. 

Tether now controls over 75% of the entire stablecoin market, benefiting from the global macroeconomic conditions and regulatory challenges faced by other firms in the U.S. 

According to Bloomberg, Tether’s market dominance has led to record profits of $5.2 billion in the first half of 2024.

Robinhood and Revolut have not confirmed any concrete plans to issue stablecoins, but their potential entry could be driven by the profitability seen in the market.

The European Union’s Markets in Crypto-Assets (MiCA) regulation, introduced in 2023, is expected to play a significant role in shaping the stablecoin industry. 

MiCA’s first phase, which ended in June, introduced reserve requirements and transaction volume caps. 

The second phase, set to take effect on December 30, will bring broader regulations affecting exchanges, wallets, and service providers.

Tether’s CEO, Paolo Ardoino, has voiced concerns about the new regulations, particularly the requirement that 60% of stablecoin reserves be held in multiple banks, noting, “Very few banks accept this type of business in Europe.” 

Circle, the company behind USD Coin (CRYPTO:USDC), has already adjusted to the new framework with its Euro-backed stablecoin, EURC.