Tether Continues To Struggle As Banks Look To Fill The Stablecoin Gap
As Tether (USDT) takes a step back, many financial institutions like Standard Chartered and Revolut are positioning themselves to take advantage of the growing demand for blockchain-powered financial services, particularly stablecoins.
Banks Go All In
EURt, introduced by Tether in 2016, initially struggled to gain momentum and was eventually discontinued to comply with new MiCA regulations in Europe. This regulatory clarity has opened the door for banks to create their own euro-backed stablecoins, with Société Générale-Forge leading the way and others preparing to launch similar products.
On a global scale, Visa is facilitating stablecoin issuance, while Standard Chartered and JPMorgan Chase are investigating blockchain-based alternatives. However, challenges remain in the form of liquidity risks, regulatory uncertainties, and competition by Central Bank Digital Currencies (CBDCs).
Changing Times
Despite the aforementioned obstacles, the profitability of stablecoins continues to attract banks keen on advancing within the digital finance sector. As more banks enter the stablecoin arena, competition may significantly impact the way digital currencies are integrated into traditional finance going forward.
With new players entering the market and forging partnerships, the stablecoin sector is set to grow, providing consumers with a combination of the reliability of conventional banking and the speed and efficiency of blockchain technology.
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