Financial giants are flocking to issue stablecoins, and the duopoly of Tether and Circle will be broken

Traditional financial institutions continue to pour into the $238 billion stablecoin market, and the industry's competitive landscape is accelerating its reconstruction. Fidelity Digital Assets' recent entry into this field marks a substantial layout in this area by mainstream asset management institutions. The following are the strategic trends and product developments of the major market players:

• Fidelity

People familiar with the matter revealed that Fidelity Digital Assets, the crypto business unit of Fidelity Investments Group, has launched stablecoin research and development testing. The institution manages assets worth US$5 trillion, and its entry into the market verifies the recognition of the stablecoin market by traditional asset management giants. This development comes as the U.S. Senate considers a landmark regulatory bill, and policy breakthroughs may further activate market potential.

• PayPal

PayPal launched its stablecoin PYUSD in 2023, taking the lead in integrating stablecoins into its platform. Users can purchase, transfer or use PYUSD through the company’s app or website, just like using a regular PayPal balance. The stablecoin currently has a market cap of $791 million.

• Robinhood

Robinhood turned profitable in the fourth quarter thanks to the rapid growth of crypto asset trading, with cryptocurrency sales increasing 700%. In November 2024, Robinhood partnered with cryptocurrency exchange Kraken and research firm Galaxy Digital to launch a stablecoin called USDG. The product runs on the "Global Dollar Network" and holders can receive returns. Its market value has grown rapidly from US$29 million at the beginning of the year to US$166 million.

• Ripple

Ripple launched its stablecoin RLUSD in December last year. Ripple, which has long used XRP for cross-border payments, plans to use the new currency to "provide stability and liquidity to its ecosystem." Ripple CEO Brad Garlinghouse said at the time of RLUSD's launch that as U.S. regulation becomes clearer, stablecoins like RLUSD are expected to gain wider adoption. The stablecoin has grown to a market cap of $176 million, a fraction of XRP’s $140 billion market cap.

• World Liberty Financial

Trump's cryptocurrency empire has also set its sights on the stablecoin space. On March 25, World Liberty Financial, a DeFi platform under its family, released detailed information on the stablecoin USD1. The stablecoin will be backed by short-term U.S. Treasuries, U.S. dollar deposits and other cash equivalents and will initially be issued on the Ethereum and BNB chains.

• Standard Chartered Bank

Standard Chartered, a British bank with a deep presence in Asia, is developing a stablecoin pegged to the Hong Kong dollar. In February, the bank announced it was working with Hong Kong-based Web3 firm Animoca Brands and telecommunications provider HKT to develop a stablecoin. The stablecoin has not yet been officially launched on the market.

Market data shows that stablecoins will process $16 trillion in transactions in 2024, with a total market value of $238 billion. Although Tether (USDT) and Circle (USDC) still account for 85% of the market share, Bernstein analysts predict that the market size will double this year. In addition, a special report by researchers at the Federal Reserve Bank of Atlanta pointed out that such digital tools are playing an increasingly important infrastructural role in the trillion-dollar payment system. With the improvement of the regulatory framework and the establishment of technical standards, the stablecoin market may usher in a new round of explosive growth.