As cryptocurrency usage grows throughout Europe, legal frameworks such as the Markets in Cryptoassets Regulation (MiCA) are altering the region’s digital economy. Stablecoins that meet MiCA rules are currently dominating the market, indicating a significant shift in trade and investment dynamics.
Kaiko and Bitvavo’s research underscores this change, pointing out that monthly euro-denominated trade volumes in 2024 have regularly exceeded prior year norms. Peaks in March and November saw volumes approach $42 billion, confirming the euro’s status as a prominent fiat currency in the cryptocurrency market. Currently, the euro accounts for 7.5% of fiat-based trade volumes, placing third behind the US dollar and the Korean won.
The implementation of MiCA laws in mid-2024 has resulted in additional clarity and compliance requirements for asset-referenced and electronic money tokens. While Tether chose to abandon its euro-pegged stablecoin EURt, citing strategic alignment with changing rules, other euro-backed stablecoins thrived. MiCA-compliant tokens, including Circle’s EURC, Societe Generale’s EURCV, and Banking Circle’s EURI, currently account for 91% of the European stablecoin market.
Crypto exchanges have also played an important part in the developing scene. Binance, for example, increased its position by listing EURI in August, nearly equaling Coinbase’s market share in the region. This development highlights the growing relevance of regulatory compliance in promoting innovation and competition in the bitcoin industry.
We expect compliant stablecoins to gain traction as MiCA’s full implementation approaches, ushering in a new era for Europe’s digital economy. This change demonstrates how, when handled wisely, regulation can promote both stability and growth in emerging financial ecosystems.
