Traditional Banks Eye Stablecoin Market as Tether Steps Back

Traditional banks are venturing into the stablecoin market as Tether discontinues its euro-pegged EURt token.

Institutions like Société Générale, Standard Chartered, and Revolut aim to capitalize on this gap and the growing demand for blockchain-based financial solutions.

Tether’s EURt, launched in 2016, struggled to gain traction and was phased out in compliance with Europe’s MiCA regulations. This regulatory clarity has paved the way for banks to issue their own euro-backed stablecoins, with Société Générale-Forge leading the charge and others preparing similar offerings.

Globally, Visa is enabling stablecoin issuance, while Standard Chartered and JPMorgan Chase explore blockchain alternatives. However, liquidity risks, regulatory uncertainty, and competition from CBDCs pose challenges. Despite these hurdles, the profitability of stablecoins continues to attract banks eager to innovate in the digital finance space.

With banks increasingly entering the stablecoin sector, the competition could reshape how digital currencies are integrated into mainstream finance. As new players emerge and partnerships form, the stablecoin market is poised to expand further, offering consumers a blend of traditional banking reliability and the efficiency of blockchain technology.