Revolut, a popular London-based fintech offering Cryptocurrency trading, is planning to issue its own stablecoin. This, according to four anonymous people who have heard about the project and who have indicated that Revolut is “quite advanced” in creating its own stablecoin.
Notably, when Revolut was asked about its plans for developing a stablecoin, a spokesperson for the fintech said the company will expand its cryptocurrency offering, taking a compliant approach to “become a safe haven” for the entire crypto community.
“Cryptocurrencies are a big part of our belief in borderless banking and we have a clear mission to become the most secure and accessible provider of crypto-asset services,” a Revolut spokesperson said in an email.
It is worth noting that Revolut obtained a banking license in the UK in July and was valued at $45 billion earlier this year.
Currently, the stablecoin sector, primarily led by Tether’s USDT with a market cap of approximately $119 billion, has seen an increasing number of new entrants. On the other hand, Circle’s USDC ranks second with $35 billion in market cap.
As a reference to the growth of stablecoins, last year, the popular payment service PayPal began issuing its own stablecoin. Also, this month, Ripple Labs CEO Brad Garlinghouse said at the Korea Blockchain Week event that the company’s stablecoin Ripple USD (RLUSD) “could be issued within weeks.”
On the other hand, “BitGo” also announced in an interview with CoinDesk that it plans to introduce a dollar-backed stablecoin next year.
Revolut joins the stablecoin craze: can it compete with the giants?
It is worth noting that it is not yet clear whether Revolut’s stablecoin would be pegged to the US dollar, like the most important stablecoins in the crypto ecosystem USDT, USDC and DAI.
Moreover, according to experts, stablecoins, whose value is pegged to a real-world asset like the dollar, often buy government-issued debt to back their value. This provides a steady stream of interest payments to businesses, making them highly profitable.
For reference, Tether reported a net profit of $5.2 billion for the first half of the year in July.
Stablecoin market cap growth. Source: IntoTheBlock
Experts also point out that the trend of developing stablecoins could also be driven by the regulations on cryptocurrencies that are emerging in Europe through the European regulatory framework for Markets in Cryptoassets (MiCA).
For several years, Revolut has allowed the buying and selling of cryptocurrencies within its app. However, Revolut suspended its cryptocurrency service in the United States last year, due to the “challenging regulatory environment.”
On the other hand, Revolut launched in May a standalone cryptocurrency exchange for experienced crypto market traders, dubbed “Revolut X,” which allows users to trade over 100 digital assets and attempts to compete with major cryptocurrency exchanges by offering lower fees.
Additionally, last month, Revolut integrated Ledger Live, a popular wallet companion app for managing digital assets, into its platform to make it easier to purchase cryptocurrencies.
It is worth noting that in 2021, Revolut was rumored to be working on a native token similar to that of the popular exchange Binance, BNB. However, it is unclear whether it ever received approval from the UK Financial Conduct Authority.
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