Crypto-friendly digital bank Revolut is planning to issue its own stablecoin. US cryptocurrency media CoinDesk reported.
Revolut will enter the highly competitive stablecoin market alongside major players such as PayPal, Ripple, and Bitgo.
Revolut, a London-based fintech company with a UK banking license, aims to ensure compliance and safety in this new venture and provide a safe and accessible platform for cryptocurrency services.
Revolut's entry into the stablecoin field highlights its commitment to innovation and leadership in the digital banking field.
According to an analysis by the Center for Economic and Business Research (CEBR) and BVNK, businesses and consumers in 17 countries surveyed are paying a premium to access stablecoins.
On average, it is about 5% higher than the standard US dollar price, and in countries such as Argentina, it is as high as 30%.
It is predicted that the premium these countries will pay to access stablecoins will be close to $5 billion in 2024. By 2027, it is expected to rise to $25 billion, and there is growing demand in the stablecoin market.
However, stablecoins are also being used for crime. According to blockchain analysis company Chainalysis, stablecoins were used in almost three-quarters of cryptocurrency fraud transactions and more than four-fifths of payments to sanctioned individuals and companies.
Why are stablecoins so in demand? According to a YouGov survey (commissioned by Visa and others) of 500 cryptocurrency users in each of five emerging markets, stablecoins are increasingly recognized as a core application in the cryptocurrency world, with 47% of respondents citing access to US dollars as their main use, 43% citing improved currency conversion rates, and 32% citing cross-border payments.
Currently, money is sent around the world through banking networks. Of course, this system certainly works, but there is a problem: the huge cost. Stablecoins allow for huge cost reductions.
Cost reductions are attractive to financial entities.
JPMorgan Chase developed its own blockchain and launched a programmable dollar on it precisely for the purpose of cost reduction.
Demand for stablecoins is likely to continue to grow, and the number of market participants will likely increase. The same can be said for the Japanese yen, and the day when stablecoins become mainstream in Japan will likely come soon. This is because yen-based stablecoins can be instantly converted into dollar-based stablecoins, and fees can be significantly reduced. There is nothing better for consumers than this.
Reference: CoinDesk
Image: Shutterstock
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