Banks and Fintech Companies Join the ‘Stablecoin Gold Rush’

Major banks and fintech companies are rushing to launch their own stablecoins, hoping to capture a share of the growing cross-border payments market reshaped by cryptocurrency. Bank of America and Stripe are among the latest financial giants exploring this lucrative sector.

The Growing Interest in Stablecoins

Last month, Bank of America signaled its readiness to issue its own stablecoin, joining a wave of financial institutions such as Standard Chartered, PayPal, Revolut, and Stripe. These companies are competing with established crypto firms like Tether and Circle, which have dominated the stablecoin industry.

This surge in interest is partly driven by regulatory acceptance. Stablecoins—designed to maintain a fixed value of one dollar per token—are increasingly seen as a legitimate part of the financial ecosystem. This marks a significant shift from regulators’ initial hostility, notably when Meta attempted to launch its Libra stablecoin six years ago. The change in sentiment has been bolstered by former U.S. President Donald Trump’s support for cryptocurrencies.

The Stablecoin Market and Its Uses

Stablecoins are primarily used to facilitate transactions between different cryptocurrencies. However, they are gaining traction in emerging markets as an alternative to traditional banking for payments, particularly in the commodities, agriculture, and shipping industries. Acting as a form of private digital cash, they enable companies and consumers to access strong currencies like the U.S. dollar quickly and cheaply, bypassing traditional banking systems.

Currently, around $210 billion in stablecoins are in circulation globally, with Tether (USDT) accounting for $142 billion and Circle’s USDC representing $57 billion. Companies such as SpaceX use stablecoins to repatriate funds from Starlink satellite sales in Argentina and Nigeria, while ScaleAI pays its vast network of international contractors in digital tokens.

Institutional Adoption and Regulatory Developments

Transaction volumes have surged, reaching $710 billion last month—up from $521 billion a year earlier—while the number of unique stablecoin addresses has grown to 35 million, a 50% increase, according to Visa data.

Large banks are becoming more confident in entering the sector as regulations take shape. U.S. lawmakers are currently debating stablecoin standards in Congress, which could provide greater certainty for banks, businesses, and consumers.

“If they legalize it, we will get into the business,” said Bank of America CEO Brian Moynihan, commenting on the Trump administration’s plans at the Washington Economic Club last month. Meanwhile, the European Union has introduced regulatory requirements for stablecoin operators, and the UK’s financial regulator is expected to consult on market rules this year.

Last month, Standard Chartered announced a joint venture to launch a Hong Kong dollar-backed stablecoin under the city’s new regulatory framework. Highlighting this momentum, Stripe recently completed its largest-ever acquisition, purchasing the stablecoin platform Bridge for $1.1 billion.

The Competitive Landscape

Despite growing institutional interest, new entrants face an uphill battle. PayPal’s PYUSD stablecoin processed only $163 million in transactions last month, compared to Tether’s $131 billion. Visa reported that 122 million stablecoin transactions took place globally last month—still far below the 829 million daily transactions on its own payment network.

Sebastian Siemiatkowski, CEO of Klarna, expressed reluctance but acknowledged the industry shift, stating, “Alright. I give up. Klarna and I will accept crypto! There’s always a last player, and that’s a milestone too.”

Future Prospects and Challenges

While stablecoins are attractive in regions with weak financial infrastructure or currency volatility, their role in Western economies remains uncertain. Analysts warn that the market is unlikely to sustain dozens of stablecoins, as users will scrutinize the credibility of issuers.

Simon Taylor of fintech consultancy 11:FS emphasized that stablecoins are not actual cash but rather cash equivalents, reflecting the credit risk of the issuing company. “Ultimately, a stablecoin’s brand tells you who the issuer is and what credit risk you are taking,” he said. “It’s not the same as holding dollars.”

Conclusion

The stablecoin market is heating up, with major financial institutions eager to secure a foothold in this evolving industry. However, regulatory clarity, user trust, and competitive differentiation will determine which players emerge as long-term winners.

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