Robinhood Considers Entering Stablecoin Market Amidst Revolut’s Move

American zero-commission broker Robinhood is contemplating the launch of stablecoins, following a similar move by Revolut. A spokesperson for Robinhood stated that the company has “no imminent plans to launch this offering,” but did not completely dismiss the report.

Robinhood began as a disruptor in the American stock brokerage landscape but has since expanded into the cryptocurrency sector.

Revolut Aims To Expand Its Cryptocurrency Offerings, Including Stablecoins

Revolut reports that a considerable portion of its revenue comes from digital asset services. Robinhood’s revenue from crypto transactions rose significantly, reaching $81 million in the second quarter of 2024. The overall transaction-based revenue for the company was reported to be $327 million.

The company has been providing cryptocurrency services to American users for several years. In December, Robinhood broadened its scope by expanding into the European market. The firm enhanced its European crypto services by launching staking and making its app available in multiple local languages.

The latest report highlighted Robinhood’s aim to enter the stablecoin market as an effort to challenge Tether’s dominance. According to the report, this move is intended to fill a gap following the implementation of the Markets in Crypto-Assets Regulation (MiCA) in the European Union.

The first phase of MiCA came into effect earlier this year, enforcing various restrictions on stablecoin circulation within the region. Many crypto companies were compelled to delist non-compliant stablecoins to comply with local regulations.

Robinhood And Revolut Want To Compete In The Growing Stablecoin Market

Unlike Bitcoin and other volatile cryptocurrencies, stablecoins are decentralized digital currencies that are pegged to traditional currencies or other mainstream assets. This design provides them with stability, hence the term “stablecoin.”

While many traditional financial institutions have been hesitant to adopt cryptocurrencies, several have welcomed stablecoins due to their advantages in facilitating settlements.

Tether currently dominates the $170 billion stablecoin market but is reportedly losing some of its grip. The market capitalization of Tether is about $120 billion, while USDC, the second-largest stablecoin, has over $36 billion in market value.

Additionally, PayPal’s stablecoin, which launched last year, exceeded $1 billion in circulation by August. However, it has since experienced a 30 percent decline, as reported by CoinGecko.

Furthermore, Revolut is also reportedly entering the stablecoin space. The company has not issued any official statements regarding this move. However, a spokesperson for Revolut stated that the firm plans to “further grow” its crypto offerings without providing specific details about stablecoins.

Robinhood is considering a move into the stablecoin market, aiming to compete with Tether. However, regulatory challenges and stiff competition may impact its strategy in this evolving sector.