The world’s biggest banks and fintech companies are diving headfirst into the stablecoin market, eager to claim a share of what could become a trillion-dollar industry. According to a report from the Financial Times, major players like Bank of America, Standard Chartered, PayPal, Revolut, and Stripe are either launching or considering launching their own stablecoins.
This sudden rush isn’t just about innovation—it’s about survival. With the stablecoin industry already dominated by Tether and Circle, traditional finance companies are realizing they must act now or risk being left behind in a rapidly evolving payments landscape.
Why the Shift? Regulation and Opportunity
For years, regulators have been wary of stablecoins, fearing they could undermine central bank control over monetary policy. Meta’s failed attempt to launch its Libra stablecoin in 2019 proved just how strong that resistance was.
But the tide is turning. Governments and financial watchdogs worldwide are now crafting rules to integrate stablecoins into the existing financial system, instead of simply banning them. In the U.S., lawmakers are debating stablecoin legislation, while the EU has already introduced new regulations. Even the UK is gearing up for its own set of rules.
Brian Moynihan, CEO of Bank of America, made it clear last month that if stablecoins receive the green light from regulators, the bank will enter the market. And with Donald Trump’s pro-crypto stance influencing the conversation, it’s becoming more likely that regulation will favor growth rather than restriction.
This isn’t just about compliance, though—there’s money to be made. Stablecoins have evolved from a tool for crypto traders to a viable alternative for cross-border payments. In emerging markets, businesses and individuals increasingly prefer stablecoins over traditional banking systems, especially for trade, agriculture, and remittances.
Stablecoins: A Growing Force in Payments
The numbers are staggering. Today, the stablecoin market is valued at around $210 billion, with Tether (USDT) and Circle’s USDC accounting for most of it. In February alone, stablecoin transactions hit $710 billion—up from $521 billion a year ago.
And it’s not just crypto firms using them. Elon Musk’s SpaceX uses stablecoins to move money from satellite sales in Argentina and Nigeria. AI data-labeling firm ScaleAI pays its overseas workforce in stablecoins, bypassing expensive and slow international wire transfers.
Meanwhile, traditional payment giants are starting to see the writing on the wall. PayPal, which launched its own stablecoin PYUSD last year, plans to expand its use by 2025. Stripe just made its biggest acquisition ever, spending $1.1 billion on stablecoin platform Bridge. Even Klarna’s CEO joked on social media that his company was the last fintech firm to embrace crypto.
The Battle Ahead: Can Banks and Fintechs Compete?
Despite all the excitement, established stablecoin providers remain far ahead of newcomers. Tether alone processed over $131 billion in transactions last month, while PayPal’s PYUSD barely hit $163 million.
Visa data reveals that while 122 million stablecoin transactions were recorded in a month, Visa itself processes 829 million transactions per day. That’s a massive gap to close.
So, what’s the catch? Unlike the U.S. dollar, stablecoins carry the credit risk of the issuer. When someone holds USDT or USDC, they’re effectively betting that Tether or Circle will always have enough reserves to back their coins. If a new entrant lacks strong financial backing, customers may hesitate to use their stablecoin over more established options.
As Simon Taylor of fintech consultancy 11:FS puts it, stablecoins are not actual cash but rather “substitutes” that depend on the credibility of their issuers. That’s a major hurdle for banks and fintechs trying to enter the market.
Stablecoins: A Gold Rush With Winners and Losers
The stablecoin market is heating up, and big banks and fintech firms are scrambling to get in. But this isn’t a free-for-all. Only the strongest and most trusted players will survive long-term.
Regulations will likely weed out weaker competitors, and users will gravitate toward stablecoins backed by issuers with a solid reputation. While companies like PayPal and Stripe have the resources to play the long game, others may struggle to gain traction.
For now, the message is clear: stablecoins are here to stay, and traditional finance must adapt—or risk being left behind.
