London-based fintech bank Revolut is reportedly planning to release its stablecoin pegged to fiat currency. The timeline and specifics of the launch remain unknown, as does whether the stablecoin will be pegged to the euro or the US dollar.
Revolut's Plans
Revolut, which has supported digital asset trading since 2017, is considering launching its stablecoin. The platform recently launched a crypto exchange for professional investors in the UK and obtained a banking license in June, as part of its strategy to expand its crypto operations.
Current State of the Stablecoin Market
As of September 18, the stablecoin market was valued at $171 billion, making it one of the most sought-after sectors after Bitcoin and the Ethereum ecosystem. Issuers of stablecoins often accumulate reserves filled with Treasury bills and bonds, earning interest and yield in the process. For example, the largest stablecoin company, Tether, earned $5.2 billion in profit in the first half of the year.
Regulatory Changes and Their Impact
The promise of yield and anticipated regulatory changes in the US have further fueled interest in stablecoins. Companies like Ripple have also announced their stablecoin plans, and providers like BitGo and PayPal have introduced their fiat-tied tokens. The European Union has implemented landmark legislation for the crypto-assets market, allowing issuers like Circle to offer their stablecoins in the region. In the US, lawmakers like Patrick McHenry and Maxine Waters have made significant progress towards establishing a comprehensive regulatory framework for stablecoins.
The launch of a new stablecoin by Revolut could significantly change the market. As regulators formulate new rules, interest in stablecoins continues to grow, providing new opportunities for market participants.
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