Euro Stablecoins Poised To Dominate: How MiCA Is Reshaping The European Crypto Market

The European crypto market is facing a regulatory shift, and it’s impacting how people hold and trade digital assets. According to digital asset analytics firm Kaiko, the use of Euro-pegged Stablecoins is surging in anticipation of the Markets in Crypto Assets (MiCA) regulations coming into effect later this month.

MiCA, a landmark piece of legislation passed in 2023, aims to create a harmonized framework for cryptocurrency regulation across the European Union. This includes strict guidelines for stablecoins, digital assets designed to maintain a steady price relative to a fiat currency, like the Euro.

“The impending MiCA regulations are poised to significantly impact the European stablecoin market,” says Kaiko in a recent report. Major crypto exchanges like Binance have already announced plans to restrict trading of stablecoins that don’t comply with MiCA standards. This suggests that non-compliant stablecoins could be delisted for European users, further driving demand towards MiCA-approved options.

This regulatory push seems to be a boon for Euro-backed stablecoins that meet MiCA’s requirements. Kaiko’s report highlights a significant rise in their usage. While Euro stablecoins have historically seen lower volumes compared to their dollar-pegged counterparts, “their average weekly volume in 2024 was $270 billion, a staggering 70 times higher than in previous years.”

Also Read: MiCA In The EU: Will It Clip Stablecoins’ Wings Or Foster Responsible Growth?

Also Read: Tether Drops $1 Billion Investment Bomb: Stablecoin Giant Sets Sights on Tech Domination

While the overall percentage of transactions using Euro stablecoins remains relatively low (currently at 1.1%), it’s important to note this represents an all-time high, with the figure starting from near zero in 2020. This sharp increase suggests a growing appetite for Euro-backed stablecoins within European markets.

As MiCA regulations come into effect, it’s likely we’ll see a continued rise in Euro stablecoin usage. With stricter compliance requirements, compliant Euro stablecoins could become the dominant players in the European crypto market.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.

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