Financial giants flock to launch stablecoins, challenging the Tether and Circle duopoly
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Financial giants flock to launch stablecoins, challenging the Tether and Circle duopoly
Market data shows that in 2024, stablecoins processed transaction volumes reaching $16 trillion, with the total market capitalization climbing to $238 billion.
Navigating Web3 tides with focused insightsBy Pedro Solimano, DLNews
Translated by Yuliya, PANews
Traditional financial institutions are continuing to enter the $238 billion stablecoin market, accelerating the restructuring of industry competition. Fidelity Digital Assets has recently joined this space, marking a significant move by mainstream asset managers into the sector. Below are strategic developments and product updates from key market participants:
Fidelity
Fidelity Digital Assets, the crypto arm of Fidelity Investments, has begun testing a stablecoin, according to sources. The firm manages $5 trillion in assets, and its entry underscores recognition from traditional financial giants of the stablecoin market’s potential. This development comes as the U.S. Senate considers landmark regulatory legislation, with policy clarity expected to further unlock market growth.
PayPal
PayPal launched its stablecoin PYUSD in 2023, becoming the first to integrate stablecoins directly into its platform. Users can buy, transfer, or spend PYUSD through the company's app or website just like regular PayPal balances. The stablecoin currently has a market capitalization of $791 million.
Robinhood
Robinhood achieved profitability in Q4 driven by rapid growth in crypto trading, with cryptocurrency sales surging 700%. In November 2024, Robinhood partnered with crypto exchange Kraken and research firm Galaxy Digital to launch USDG, a yield-bearing stablecoin operating on the "global dollar network." Its market cap has grown from $29 million at the beginning of the year to $166 million.
Ripple
Ripple launched its stablecoin RLUSD in December last year. The company, long using XRP for cross-border payments, aims to use the new coin to “provide stability and liquidity to its ecosystem.” Ripple CEO Brad Garlinghouse stated upon RLUSD’s release that such stablecoins are expected to see broader adoption as U.S. regulations become clearer. The stablecoin’s market cap has reached $176 million, still only a fraction of XRP’s $140 billion valuation.
World Liberty Financial
Donald Trump’s crypto venture is also setting its sights on stablecoins. On March 25, his family’s DeFi platform, World Liberty Financial, released details about its stablecoin USD1. Backed by short-term U.S. Treasuries, U.S. dollar deposits, and other cash equivalents, the stablecoin will initially launch on Ethereum and BNB Chain.
Standard Chartered
UK-based Standard Chartered, with deep influence in Asia, is developing a Hong Kong dollar-pegged stablecoin. In February, the bank announced it is collaborating with Hong Kong Web3 firm Animoca Brands and telecom provider HKT on the project. The stablecoin has not yet officially launched.
Market Size Could Double This Year
Market data shows stablecoins processed $16 trillion in transactions in 2024, with total market capitalization rising to $238 billion. While Tether (USDT) and Circle (USDC) still dominate 85% of the market, Bernstein analysts predict the market could double in size this year. Additionally, a special report by researchers at the Atlanta Federal Reserve highlights that these digital tools are increasingly serving as critical infrastructure within multi-trillion-dollar payment systems. With regulatory frameworks maturing and technical standards being established, the stablecoin market may be poised for another wave of explosive growth.
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