Swiss crypto bank Sygnum said that financial institutions that choose to launch real-world asset tokenization platforms and stablecoins on Solana could allow the blockchain to "seriously challenge" Ethereum in the long term, according to Cointelegraph. Sygnum noted in its report on October 1 that even "conservative institutions" may prefer Solana's scalability to Ethereum's stability and security advantages.

Sygnum mentioned that a PayPal executive recently claimed at a Solana event that “Ethereum is not the best solution for payments.” Rival Visa recently integrated Solana for USD Coin (USDC) settlements, touting its “high throughput” and “low costs.”

Asset management firm Franklin Templeton also announced plans to launch a mutual fund on Solana, and Citi said it is considering using Solana for cross-border payments. Despite this, Sygnum noted that there is still a market cap gap of more than $218 billion between Ether (ETH) and Solana (SOL).

In addition, Sygnum claims that some of Solana’s transaction volume metrics are exaggerated, and that network revenue is primarily affected by the issuance and trading of Meme coins. Former U.S. intelligence contractor and whistleblower Edward Snowden recently criticized Solana for being too centralized, saying that “any significant project on the network could be easily disrupted if countries start to get involved.”

Currently, Ethereum still dominates the real-world asset tokenization and stablecoin markets, with 81% and 49% market share respectively, while Solana has less than 3% share in each market. Sygnum noted that Solana’s price ratio to Ether is up 300% year-on-year and 600% since 2023.

However, Sygnum believes that Ether may be in for a “sharp reversal” after two years of significant downturn and negative sentiment. Sygnum believes that Ether makes more sense to traditional investors than Bitcoin (BTC) because it is easier to value. Sygnum also noted that the risk of U.S. securities regulators deeming Ether a security was “significantly reduced” after concluding an investigation into Ethereum in June.

On the other hand, many crypto executives believe that U.S. securities regulators still consider Solana a security. Sygnum concluded: “Ultimately, for Solana to successfully challenge Ethereum in the long term, it needs to lead future technology cycles and become the birthplace of groundbreaking decentralized applications that capture the market’s imagination and drive widespread adoption.”