Fintech giants Robinhood and Revolut are reportedly contemplating making their entry into the stablecoin market.
Fintech giants Robinhood and Revolut are reportedly contemplating making their entry into the stablecoin market. This comes in light of new regulations in Europe that are believed to shed the much-needed light upon the sector.
According to a report on Bloomberg, both Robinhood and Revolut are reportedly considering the issuance of their own stablecoins, joining an increasingly attractive market dominated by Tether's USDT. USDT currently boasts a market cap of over $119 billion.
Tether has greatly benefited from the turbulent macroeconomic environment and crypto market volatility over the last couple of years. Banking crises on top of the regulatory crackdowns on U.S. firms contributed to the remarkable growth of USDT, which now controls more than 75% of the whole market.
Tether also announced record profits of $5.2 billion in the first half of 2024. It has also shored up its reserves with a larger hoard of US government bonds. The attractive business model has resulted in more companies joining the stablecoin market, though neither Robinhood nor Revolut has confirmed the reports.
n 2023, MiCA-European Union's Markets in Crypto-Assets regulation-will dramatically change how stablecoins will be created, sold, and traded. The implementation of MiCA was conducted in two phases, and the first one expired on June 30, 2024. During the first phase, the regulations on the reserve requirements, transparency, and caps on the volume of transactions came into play, forcing some exchanges to reconsider their stablecoin offerings.
A second phase, due to take effect from December 30, 2024, extends those rules to crypto-asset service providers, including exchanges, wallets, and other service companies.
The new regulations put tight controls on so-called stablecoins, variously described as "asset-referenced tokens" or "electronic money tokens," and will require daily volume limits of just $200 million to be used in payments.
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