Reshaping of the Stablecoin Market Landscape: Financial Giants Enter the Arena

Traditional financial institutions are gradually entering the stablecoin market, which is worth up to $238 billion, and this trend is accelerating the restructuring of industry competition. Recently, some mainstream asset management institutions have begun to make substantial arrangements in this field, with Fidelity Digital Assets' involvement being particularly noteworthy. Below is an overview of the strategic movements and product developments of the main participants in the current market:

Fidelity

According to sources, the cryptocurrency division of Fidelity Investment Group has begun research and development testing on stablecoins. As an institution managing assets worth $5 trillion, its entry action validates the recognition of the stablecoin market by traditional asset management giants. This move coincides with the U.S. Senate's consideration of a landmark regulatory bill, and policy breakthroughs may further stimulate market potential.

PayPal

PayPal launched its own stablecoin PYUSD in 2023, becoming the first major payment company to integrate stablecoins into its platform. Users can buy, transfer, or use PYUSD through the company's app or website just like using regular PayPal balance. Currently, the market capitalization of this stablecoin has reached $791 million.

Robinhood

Thanks to the rapid growth of crypto asset trading, Robinhood achieved profitability in the fourth quarter, with cryptocurrency sales increasing by 700%. In November 2024, the company partnered with a cryptocurrency exchange and research firm to launch a stablecoin called USDG. This product operates on the "Global Dollar Network," allowing holders to earn returns. The market capitalization of USDG quickly grew from $29 million at the beginning of the year to $166 million.

Ripple

Ripple launched its stablecoin RLUSD last December. The long-time user of XRP for cross-border payments, Ripple plans to use this new currency "to provide stability and liquidity to its ecosystem." Ripple's CEO stated at the launch of RLUSD that as U.S. regulations become clearer, stablecoins like RLUSD are expected to gain wider adoption. The market capitalization of this stablecoin has grown to $176 million, but it is only a small fraction of XRP's market cap of $140 billion.

World Liberty Financial

The decentralized financial platform World Liberty Financial, under the Trump family, is also looking towards the stablecoin sector. On March 25, the platform released detailed information about its stablecoin USD1. This stablecoin will be backed by short-term U.S. Treasury bonds, dollar deposits, and other cash equivalents, and will initially be issued on the Ethereum and BNB chains.

Standard Chartered Bank

Standard Chartered Bank, which has a strong influence in Asia, is developing a stablecoin pegged to the Hong Kong dollar. In February of this year, the bank announced that it is collaborating with a Hong Kong Web3 company and a telecom provider to develop the stablecoin. The product has not yet been officially launched on the market.

Market Outlook

Market data shows that the transaction volume processed by stablecoins will reach $16 trillion in 2024, with the total market capitalization rising to $238 billion. Although the market is currently dominated by two major stablecoins, which account for 85% of the share, analysts predict that the market size will double within the year. In addition, a special report by a Fed researcher points out that these digital tools are playing an increasingly important infrastructural role in the trillion-dollar payment system. With the improvement of the regulatory framework and the establishment of technical standards, the stablecoin market may usher in a new round of explosive growth.