The rising tide of stablecoin adoption has prompted a significant response from traditional financial institutions. Global banks and fintechs are launching their own stablecoins, capitalizing on the increasing adoption and favorable regulatory environment.
Joining an established list of payment providers like Standard Chartered, PayPal, and Revolut, Bank of America (BoE) is considering launching its stablecoin. This growing trend among financial institutions aims to disrupt the dominance of major players like Tether and Circle.
Banks and Fintechs Capitalize on Stablecoin Growth
According to Financial Times, top banks and fintechs are racing to introduce their own stablecoins to secure a foothold in the rapidly evolving cross-border payments space. The favorable regulatory environment and growing adoption of stablecoins add momentum to the development.
Notably, the regulatory recognition that stablecoins can play a legitimate role in the financial system has boosted enthusiasm. This, in turn, has influenced financial institutions to leverage the capabilities of these assets.
This regulatory shift, following President Donald Trump’s election victory in 2024, has been driven by his pro-crypto stance. Likening this increasing demand for stablecoins to the gold rush, where people made more money selling shovels to miners than actually mining for gold, Simon Taylor, co-founder of fintech consultancy 11: FS, stated,
It’s about people selling shovels in the stablecoin gold rush. The other thing that’s driven it is there’s real volume. Founders want to get a piece of it because they know they’re going to get stablecoin regulation and so it’s all of those things coming together.
Stablecoin Frenzy: Big Players Enter the Fray
Large players like Bank of America, PayPal, Standard Chartered, Stripe, and Revolut have expressed their interests in adopting stablecoins. Stripe co-founder John Collison stated, “Stablecoins and the more modern chains are really interesting for the payments use case, and that makes up our business.”
Recently, Bank of America announced its potential plans to launch its own stable asset upon receiving regulatory approval. CEO Brian Moynihan stated, ““If they make that legal, we will go into that business.”
Last month, Standard Chartered revealed its plans to develop a Hong Kong dollar-backed token, adhering to the new stablecoin regulatory policies in the territory.
Similarly, PayPal intends to expand its stablecoin payment option, PYUSD, in 2025, anticipating significant adoption among US businesses making international supplier payments. According to Visa data, stablecoin transactions on PayPal totaled $163 million this month, a fraction of Tether’s $131 billion.
US Department of Housing and Urban Development Experiments with Stablecoins
In a recent development, the US Department of Housing and Urban Development is planning to integrate blockchain technology and adopt stablecoins. According to a ProPublica report, the department is considering blockchain-based solutions for grant tracking and stablecoin payments, with pilot testing proposed for one of its offices.
Notably, the team believes that the current experiment signals the adoption of crypto and blockchain across the federal government.
US Regulatory Landscape Boosts Crypto Adoption
President Donald Trump’s crypto-focused policies have generated significant optimism. This marks a substantial shift in the US government’s stance on digital assets. Trump’s administration is introducing new policies aimed at establishing stablecoins.
Recently, Trump announced plans to adopt Bitcoin, XRP, SOL, and ADA as US crypto reserve assets, signaling a commitment to integrating digital assets into the country’s financial ecosystem. This move was followed by an executive order establishing a Strategic Bitcoin Reserve.
These developments underscore the government’s progressive stance on cryptocurrencies. It focuses on fostering innovation, investment, and integration into the traditional financial system. The Trump administration’s policies aim to position the United States as a leader in the global digital asset economy.
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