Nothing official yet, but it seems that the giants of fintech, first Revolut and then also Robinhood, are planning to launch their own native stablecoin. In this sense, both companies would follow the example of PayPal and its stablecoin PYUSD launched in 2023.
Stablecoin: Revolut and Robinhood might follow PayPal’s example with PYUSD
According to what reported by Bloomberg, it seems that the fintech giants Revolut and Robinhood are studying the possibility of launching their own native stablecoin.
Specifically, a spokesperson for Robinhood Markets Inc. reportedly stated that “there are no imminent plans” for issuing a stablecoin, but did not deny the company’s consideration on the matter.
Not only that, even for Revolut the situation seems similar. Even if these are “rumors”, it appears that the UK-based platform wants to launch its stablecoin with the aim of consolidating its presence in the crypto sector.
In fact, a spokesperson for Revolut said that the company plans to “further grow” its suite of crypto products, although it has not yet confirmed a future stablecoin.
In any case, the rumors about the possibility that these two fintech giants might issue their own native stablecoin would not be such a novelty.
Both Revolut and Robinhood would indeed follow in the footsteps of another giant in digital payments, PayPal, which in August 2023 issued and launched its stablecoin PYUSD on the market.
Stablecoin and the valuations of Revolut and Robinhood: a competition against Tether?
Following Bloomberg’s reasoning, it seems that behind these considerations of Revolut and Robinhood issuing their own native stablecoin, there might also be competition against Tether.
In fact, it seems that the crypto company behind the world’s largest stablecoin, Tether (USDT), might find itself in trouble regarding the new MiCA regulations that have not yet been implemented. Recently, even the CEO of Tether, Paolo Ardoino, criticized the particular regulation that requires stablecoin issuers to hold reserves in bank deposits.
In practice, the MiCA provision requires that 60% of stablecoin reserves be bank deposits. In this regard, Ardoino has expressed his concern as this provision could complicate and make stablecoin operations more risky.
And so, at the moment, while Circle of USD Coin (USDC) already possesses a required license to operate in the EU, it seems that Tether, on the other hand, does not have the appropriate permits for future regulations. If a solution is not found, this situation would lead the crypto-exchanges operating in the EU to have to delist USDT.
It should be noted, then, that the stablecoin market is practically dominated by Tether (USDT) which has a total market cap of 119 billion dollars, at the time of writing. In second place is USDC with 36 billion dollars.
At this point, following this reasoning, Robinhood and Revolut might be waiting to understand the stablecoin market, which would become more competitive only if Tether were to see its dominance decrease.
The new USDS by BitGo that offers rewards
Speaking of stablecoin, recently BitGo introduced its new USD Standard (USDS) which will be available to the public from January 2025.
Instead of competing with Tether in terms of licenses and law, BitGo is precisely trying to revolutionize the entire market, proposing a stablecoin standard totally different from the previous ones.
In fact, USDS will be a stablecoin pegged to the dollar 1:1 that offers the possibility of obtaining rewards to the institutions that fuel its liquidity.
Specifically, USDS will be backed by short-term Treasury bills, repurchase agreements, overnight and cash, like others present in the market.
Its peculiarity will be to distribute a part of the returns generated by its reserves.
To succeed in this mission without passing as a dividend (and then becoming an investment contract), the process of distributing USDS returns does not include the end user, but only the institutions that participate in the network with their liquidity.