Dollar-denominated stablecoins are booming, but their euro-backed counterparts are failing to gain traction — at least for now.
Data compiled by crypto research firm Kaiko found that monthly euro-denominated stablecoin spot volumes plunged from near $200 million in early 2024 to around $100 million this year.
“Euro-backed stablecoins have collectively failed to generate meaningful trading activity despite MiCA’s regulatory framework intended to give an advantage to compliant European issuers,” Kaiko said in a report this week.
Stablecoins are a $315.8 billion market, according to DefiLlama data.
Since US President Trump signed the Genius Act last year to regulate tokens, top companies such as Visa, Mastercard, Amazon, and BlackRock have accelerated their stablecoin offerings and business ventures.
MiCA was supposed to help
The European Union’s Markets in Crypto-Assets regulation, or MiCA, was enacted in 2023 and sets clear rules for entities seeking to issue cryptocurrencies such as stablecoins.
But despite the comprehensive legislation, euro-denominated stablecoins still aren’t being used, according to Kaiko.
Instead, traders use dollar-denominated tokens to make their bets. Their euro counterparts “add currency conversion friction without meaningful benefits,” Kaiko said.
Case in point: Tether, the issuer of the biggest stablecoin in existence, USDT, stopped minting the euro version of its flagship cryptocurrency in 2024.
The euro-backed token EURT had low trading volume compared to USDT before it was sunset.
“While volumes are at $1.5 billion to 2 billion monthly, this pales in comparison to USD stablecoins’ $1 trillion+ monthly, roughly a 200x difference that demonstrates regulatory approval cannot create adoption without underlying demand,” the report noted.
Still time for growth?
Others still think the eurozone could compete with the US on stablecoins.
In a report last month, S&P Global Ratings said it expected the European market to surge as banks rush to keep up with the US and ultimately earn fees from institutional clients dealing in blockchain-based assets.
The credit rating agency said it expected the market to surge from €650 million to €1.1 billion by 2030 — or $749 million to $1.2 billion.
A group of 12 European banks — including UniCredit, BNP Paribas, and BBVA — have joined forces to launch a euro-denominated stablecoin, which is expected to be released this year.
