By Michael Scott
UK fintech company Revolut plans to unveil its stablecoin, taking on Tether (USDT) and USD Coin (USDC).
A recent Coindesk publication disclosed Revolut ambitions to scale the crypto-asset offerings. The aspirations to strengthen its digital asset offerings position the London-headquartered firm alongside BitGo and Ripple as they enter the profitable stablecoin market.
Parties privy to the plans indicated that Revolut positions itself as a critical player in cryptocurrency, assuring compliance and security for digital asset users. Introducing stablecoin is at the heart of Revolut’s ambition, as the sector is witnessing an influx of participants.
Stablecoin Space Set for New Issuers
Tether dominates the stablecoin ecosystem, with the USDT carrying approximately $119 billion, trailed by USD Coin (USDC) at $35.86 billion in second place. Besides Revolut, the stablecoin attracts interest from fintech and blockchain firms. BitGo and Ripple have recently revealed their ambitions to issue stablecoin tokens.
Payments services firm preceded Revolut in offering US-dollar pegged PayPal USD (PYUSD) in August last year. Revolut’s venture into the stablecoin adds to the rivalry among native crypto firms. Its entry expands the competition beyond Circle’s USDC as more fintech firms eye a share of the lucrative space.
Stablecoins involve tokens whose value is pegged to the fiat or real-world assets, including government-issued debt. Such offers assured returns via interest payments, thus attractive to the institutional holders. Tether disclosed a $5.2 billion profit in Q1 and Q4 2024.
Revolut scope in cryptocurrency is evident since introducing crypto trading within the application. More recently, Revolut unveiled the standalone crypto exchange Revolut X for experienced traders in May.
Revolut Ambitions in Stablecoin
Revolut’s expanding footprint in the crypto asset space emerges when regulatory frameworks take shape. In particular, Europe is at the heart of the regulatory milestone as the Markets in Crypto Assets (MiCA) framework is poised to offer clearer guidance on crypto-tokens. Such offers an opportunity to legitimize and stimulate growth within the crypto industry.
Revolut targets to scale operations, having secured the UK banking license in July and realizing a $45 billion valuation this year. The stablecoin segment entry underscores Revolut’s ambitions to diversify offerings and earn a share of the rising demand for reliable and compliant crypto.
Stablecoins profitability arises from the real-world assets (RWAs) link as a source of revenue stream for the issuer. With fintech and blockchain firms expanding to the segment, competition will likely intensify.
Revolut revealed that it was integrating Ledger Live last month as a platform to manage and facilitate crypto purchases. The agreement allows the fintech firm to ensure more accessible, faster, and more secure purchases of crypto assets. The Ledger Live app enables users to seamlessly convert fiat currency into digital assets without identity checks and running multiple verifications.
Non-dollar Stablecoins Rise
Visa’s crypto head, Cuy Sheffield, considers the stablecoin segment will experience a dramatic shift with non-dollar fiat currencies growing in the subsequent years. The executive revealed on Friday’s fireside chat at the Solana Breakpoint Singapore that dollars are essential for cross-border transactions.
Sheffield reiterates that though dollars are critical for cross-border transactions, the parties desire quick and efficient conversion. This requirement plays a significant role in companies rolling out alternative local currency stablecoins.
The Visa executive predicts that major fiat currencies will have on-chain representation. Nonetheless, Sheffield observes that the USD stablecoins are dominant as they constitute 99% of the present supply.
Sheffield considers it exciting for more stablecoins to enter the market, intending to differentiate themselves from the dominant duo – USDT and USDC. Such demand arises from people explicitly embracing stablecoin.
Sheffield considers that stablecoin could realize increased use cases on the backend. Such is evident in BitGo unveiling stablecoin USDS, which offers financial incentives.
Sheffield considers stablecoin an infant space that would witness explosive growth as non-crypto businesses attempt to solve the payout challenges to overseas freelancers.
The Visa executive indicates that stablecoins emerge as the preferred backend payment rail linking local and cross-border payment. Such presents a huge opportunity to have stablecoins on other fiat currencies.