This time, it's Revolut, the British neo-banking platform that has been warming up to crypto for years.
British neo-banking platform Revolut is reportedly joining the stablecoin race with a ‘compliance-first’ approach, a move that could chip away at the dominance of Tether's USDT.
Sources familiar with the matter told The Block that Revolut has been working on a stablecoin for a "significant" period of time. The company did not confirm the reports when contacted by several media outlets.
In response to queries, a Revolut spokesperson offered a generic reply, stating that the company is always seeking to provide its users with the optimal experience, including its expanding crypto clientele.
However, the spokesperson took a subtle dig at USDT and its issuer, Tether, which has faced numerous controversies in recent years, by emphasizing that Revolut is committed to a "compliance-first" approach.
“Crypto is a big part of our belief in banking without borders and we have a clear mission to become the safest and most accessible provider of crypto asset services,” the spokesperson added.
Revolut is not the first established financial institution to venture into the realm of stablecoins. Last year, PayPal launched the PayPalUSD, a regulated stablecoin with a market capitalization of $733 million, ranking fifth behind USDT, USDC, DAI, and FDUSD. As reported by Cryptanalytic earlier this month, PayPalUSD recently expanded to the Solana blockchain.
Next up was Ripple, the company synonymous with XRP, which announced the RLUSD earlier this year. This regulated stablecoin will be minted on both Ethereum and the XRP Ledger, with trials already underway with Ripple's partners.
Given Ripple's strong industry presence, massive XRP community following, and regulatory compliance (especially after settling its SEC lawsuit), the company believes its stablecoin has a distinct advantage.
Even BitGo, a leading crypto custodian, is joining the stablecoin scene. During the ongoing Token2049 event in Singapore, the company announced its stablecoin, which will be called USDS. BitGo employed the familiar narrative, claiming to prioritize the interests of users and aiming to create a stablecoin that surpasses all others.
However, the driving force behind these new stablecoins is the astronomical profit margins they offer. A stablecoin essentially allows a company to pool billions of dollars, which it can then invest as it sees fit, keeping all the profits.
Unlike decentralized finance (DeFi) applications, where users can earn yield on their crypto deposits, Tether gets to keep 100% of the profits it mints from the $119 billion in fiat received from USDT owners. Similarly, Circle has a $35 billion stash that it can invest at will.
To further sweeten the deal, these companies are not subject to conventional regulations. For instance, any bank that collects user deposits and utilizes them for investments or loans must adhere to strict rules, and noncompliance is met with hefty penalties.
Stablecoin issuers, however, face no such obstacles. Tether, for example, was found guilty in 2021 of lying about the token's backing, which essentially meant that some of the funds received during USDT sales were used for other purposes. Despite this transgression, the company was slapped with a mere $41 million fine. To put this into perspective, Tether generated an astonishing $5.2 billion in profits during the first half of 2024.
The above is the detailed content of Revolut to Join the Stablecoin Bandwagon, Targeting USDT's Dominance. For more information, please follow other related articles on the PHP Chinese website!

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