As cryptocurrency adoption grows and regulatory frameworks evolve in Europe, the market for compliant stablecoins is undergoing significant changes. A new report by Kaiko and Bitvavo sheds light on these developments.
Growth in euro trading volumes
The report revealed that euro-denominated trading volumes throughout 2024 consistently exceeded the 2023 average, with peaks in March and November surpassing $42 billion each month. Researchers noted this reflects the euro’s increasing role in cryptocurrency markets, making it the third most-traded fiat currency after the US dollar and the Korean won.
Impact of MiCA on stablecoins
The introduction of the Markets in Crypto-Assets Regulation (MiCA) in June 2024 has significantly reshaped the stablecoin landscape in Europe. These regulations governing asset-referenced and electronic money tokens are expected to be fully implemented by December 2024. By the end of the year, MiCA-compliant stablecoins had captured a substantial market share.
Support and discontinuation of euro-pegged stablecoins
On November 27, Tether announced the discontinuation of its euro-pegged stablecoin EURt, aligning with its strategic direction amidst Europe's evolving regulatory frameworks for stablecoins. Despite this, euro-backed stablecoins thrived, with monthly volumes exceeding $300 million throughout 2024. Market leaders like Circle, Societe Generale, and Banking Circle held 91% of the market, with Binance emerging as a key player, nearly matching Coinbase.
The European crypto market is witnessing a rise in euro trading volumes and a shift in the stablecoin landscape influenced by the new MiCA regulations. These developments continue to shape market dynamics, providing opportunities for new participants to engage and expand.
