If, as reported, Robinhood and Revolut do attempt to launch stablecoins, can they avoid the same fate as PayPal’s PYUSD?
This week, anonymous sources told Bloomberg that fintech giants such as U.S. investment app Robinhood and London-based crypto-friendly neobank Revolut are considering launching their own stablecoins.
These giants are targeting the stablecoin market, and Tether (USDT) currently has a market cap of $119 billion, accounting for about 68% of the $173.5 billion category.
As Europe provides a clearer regulatory framework, fintech giants may bring a new round of competition. However, the question remains: Can they break through Tether’s dominance, or will they flounder like other giants before them?
According to a report on Sept. 26, both companies are considering issuing stablecoins, although neither company has officially confirmed their plans.
Robinhood has already entered the stablecoin space by listing Circle’s USDC (USDC), which is currently the second-largest stablecoin with a market cap of $36.3 billion.
Revolut has also been expanding its cryptocurrency offerings, launching staking services for major tokens such as Ethereum, which could lay the groundwork for the launch of a stablecoin.
Together, the two stablecoins provide the necessary liquidity for centralized exchanges and decentralized finance (DeFi) applications, making it difficult for new entrants to gain traction.
But breaking into this market means more than just intention. The barriers are high, the competition is fierce, and Tether is not only standing tall, but also deeply entrenched.
The case of PayPal’s PYUSD illustrates the challenges facing new players. Despite PayPal’s large user base and strong brand recognition, its stablecoin supply remains at around $710 million — a tiny fraction compared to Tether.
Additionally, recent data shows that PYUSD’s circulating supply has fallen 30% in the past 30 days as DeFi yields on Solana plummet, demonstrating the volatility and risks that stablecoins face in the market.
Finder.com founder Fred Schebesta sees potential in Robinhood and Revolut, but acknowledges the challenges.
“There’s definitely an opportunity for Revolut and Robinhood to chip away at USDT’s dominance, but it’s going to take a lot of consolidation to make that happen,” he said. “USDT is deeply entrenched in the market, and for some reason people still have an unusual amount of trust in it.”
He said PayPal’s stablecoin showed that “even the big players haven’t gained much traction yet,” but added that Robinhood and Revolut had an opportunity to try different approaches.
“Their platforms are more integrated with retail investors,” Schebesta said. “If they can tap into those ecosystems correctly, they may find advantages that PayPal hasn’t yet taken advantage of.”
Pav Hundal, market analyst at Australian cryptocurrency exchange Swyftx, agrees that scale is crucial.
“Stablecoins are a scale game, or relative scale if you offer a niche product,” he told Decrypt. “Robinhood and Revolut have plenty of scale, and clearly have a level of confidence that they can leverage their massive global networks to take a piece of Tether’s pie.”
He added that the two companies also have a major advantage: Both are already regulated in many jurisdictions around the world.“But for now, Tether is on a completely different plane of existence than its competitors,” Hundal said.
PayPal isn’t the only company battling PYUSD. Even giants like JPMorgan, Meta (Facebook), and Binance have tried to conquer the stablecoin world — each facing their own unique challenges and limitations.
JPM Coin found a niche in internal banking but failed to penetrate the broader retail or DeFi markets. Meta’s Diem, once hailed as “the future of money,” collapsed under regulatory pressure and never saw the light of day.
Binance’s BUSD has grown, but even so, it remains a distant competitor to Tether and cannot topple the giant.
Tether’s entrenched position as a major trading pair on cryptocurrency exchanges sets a high standard of liquidity that new entrants must match. The deep liquidity pools, network effects, and established trust in the stablecoin market set a high barrier to entry for new entrants.
