World’s Largest Banks and Fintechs Race to Launch Stablecoins

World’s largest banks and fintechs are racing to launch their own stablecoins, digital currencies pegged to the U.S. dollar. Recently, Bank of America expressed interest in entering the stablecoin market, joining established companies such as PayPal, Standard Chartered, Revolut, and Stripe, which currently face competition from crypto giants Tether and Circle.

Institutions and Companies Race to Claim Their Share of the ‘Stablecoin’ Cake!

The surge in stablecoins is due to regulators worldwide warming up to the idea, recognizing their potential to integrate into the global financial system. This shift has been accelerated by U.S. President Donald Trump’s pro-crypto policies.

Simon Taylor, co-founder of fintech consultancy 11:FS, likens the situation to a “gold rush,” indicating that companies are eager to capitalize on stablecoin opportunities. With regulators considering more favorable rules for stablecoins, investors are feeling a “fear of missing out” on related businesses.

Stablecoins are emerging as alternatives to traditional banking systems, streamlining payments in sectors such as agriculture, commodities, and shipping. They enable individuals and companies to bypass banks, facilitating faster, cheaper, and more accessible international transactions.

Currently, around $210 billion worth of stablecoins are in circulation globally, with Tether (USDT) and Circle’s USDC holding the majority. Notably, companies like Elon Musk’s SpaceX are using stablecoins to repatriate funds from satellite sales in countries like Argentina and Nigeria, while businesses like ScaleAI are paying overseas contractors in digital tokens.

Also Read: Circle CEO Suggests Stablecoins, Smart Contracts For US Govt Funds

Last month alone, stablecoin transactions reached $710 billion, a significant increase from $521 billion the previous year. Meanwhile, the number of stablecoin addresses grew by 50% to reach 35 million.

As regulators worldwide scrutinize stablecoins, large banks are gaining confidence. Stripe, a global fintech company, recently acquired the stablecoin platform Bridge for $1.1 billion. Stripe co-founder John Collison sees substantial potential for stablecoins in the payments sector, where his company processed $1.4 trillion in transactions last year. PayPal, which introduced its own stablecoin PYUSD, plans to expand its use in 2025, especially for U.S. businesses involved in international payments.

Despite the promise of stablecoins in regions with weak financial infrastructure or unstable currencies, their application in developed markets remains uncertain. Analysts caution that the market may struggle to sustain multiple competing stablecoins, particularly as users increasingly evaluate the quality and credibility of the companies behind them.

Also Read: Sen. Cynthia Lummis: Bipartisan Legislative Framework for Stablecoins Coming Soon