TechFlow news, March 10 — According to the Financial Times, major global banks and fintech firms are racing to launch their own stablecoins in a bid to capture market share in cross-border payments, an area expected to be reshaped by cryptocurrencies. Last month, Bank of America said it was open to issuing its own stablecoin, joining a growing list of payment providers including Standard Chartered, PayPal, Revolut, and Stripe that have already entered the space.
Simon Taylor, co-founder of fintech consultancy 11:FS, likened the trend to FOMO (fear of missing out): “It’s about people selling shovels during the stablecoin gold rush. Another driver is that there’s real transaction volume—founders want a piece of the action because they know stablecoin regulation is coming. So all these factors are converging.” Martin Mignot, partner at Index Ventures and backer of Bridge, said stablecoins are “appealing” in markets with “poor infrastructure or liquidity and high currency risk,” but use cases in Western markets are “less obvious.”
Analysts warn the market is unlikely to sustain dozens of stablecoins as users begin scrutinizing the quality of issuers. Taylor noted that stablecoins are not cash but merely substitutes reflecting the creditworthiness of the issuer and its ability to manage operational risks: “At its core, a stablecoin’s brand tells you who the issuer is. Since the organization behind it is the issuer, your credit risk becomes X or Y. This isn’t something you do with dollars.”
Approximately $210 billion in stablecoins have been issued globally, with Tether issuing around $142 billion in USDT and Circle issuing $57 billion in USDC. According to Visa data, stablecoin transaction volumes have risen from $521 billion a year ago to $710 billion last month, while the number of unique stablecoin addresses has grown 50% year-on-year to reach 35 million. As the regulatory landscape becomes clearer, financial institutions are gaining confidence to enter the sector. The U.S. Congress is discussing legislation to set standards for stablecoins, the European Union implemented rules earlier this year requiring stablecoin operators to comply, and the UK financial regulator plans to consult the market this year.
