Tether Shatters Records And Drags Banks Into The Stablecoin Revolution

As Tether prepares to announce record profits exceeding $10 billion for 2024, global banking giants are accelerating their positioning in the stablecoin market. From Société Générale to Deutsche Bank, traditional financial institutions are multiplying initiatives to not miss this crypto revolution.

Banks at the Forefront of Stablecoin Innovation

The meteoric success of Tether Holdings in 2024 does not go unnoticed. By recording net profits exceeding $10 billion, Tether, issuer of the USDT stablecoin, has become an essential player in the crypto ecosystem.

In light of these performances, many banks, particularly in Europe and Asia, are actively preparing their entry into the stablecoin market.

In Europe, ambitious initiatives are emerging. Société Générale, through its subsidiary SG-Forge, has launched a stablecoin backed by the euro, now accessible to individual investors.

In Germany, Oddo BHF bank is developing a stablecoin, while the British Revolut is considering a similar project. DWS, a subsidiary of Deutsche Bank, also plans to launch in 2025, just like BBVA in Spain, which is collaborating with Visa on a pilot project.

In Asia, the enthusiasm is equally palpable. A consortium led by Standard Chartered is testing a stablecoin pegged to the Hong Kong dollar. This dynamic reflects a growing adoption and a desire to meet the needs of the global market.

A Global Expansion Marked by Regulatory Challenges

In the United States, despite a marked interest in stablecoins, major banks are taking a more cautious approach, conditioned by the evolution of the regulatory framework. JPMorgan Chase, a pioneer with its JPM Coin token, now envisions a coexistence between traditional stablecoins and its own deposit tokens.

According to Naveen Mallela of Kinexys, the bank’s digital asset unit, stablecoins issued by banking institutions will become commonplace within three years.

The necessary technological infrastructure is gradually taking shape, particularly with Visa’s tokenization network planned for 2025. Cuy Sheffield, head of Visa’s crypto division, highlights a growing demand coming from Asian and South American financial institutions.

However, concerns remain. The ECB warns of potential risks to financial stability, notably the possible erosion of traditional bank deposits. In the United States, questions regarding the nature of reserves backing stablecoins and their insurance coverage remain unresolved.

In summary, the enthusiasm of traditional banks for stablecoins, catalyzed by the resounding success of Tether, marks a decisive turning point in the evolution of the global financial system. However, the success of this transition will largely depend on the regulators’ ability to establish a clear and balanced framework, allowing innovation while ensuring financial stability.