As cryptocurrency use continues to grow in Europe, stablecoins compliant with the new Markets in Crypto-Assets Regulation (MiCA) are taking center stage. A recent report from research firm Kaiko and crypto exchange Bitvavo reveals that these compliant stablecoins are capturing a significant portion of the market, marking a shift in how digital currencies are utilized across the continent.
Euro Trading Volumes on the Rise
The report highlights that euro-denominated trading volumes have consistently exceeded averages from 2023 throughout 2024. Notably, March and November saw trading volumes surpass $42 billion each month, indicating a growing interest in the euro within the crypto space. In fact, the euro has become the third most-traded fiat currency in cryptocurrency markets this year, accounting for 7.5% of all fiat-based trading, following the U.S. dollar at 49.9% and the Korean won at 33.4%.
MiCA Regulations Reshape Stablecoin Landscape
The introduction of MiCA regulations on June 30 has significantly transformed Europe’s stablecoin market. These regulations set clear rules for asset-referenced and electronic money tokens, which are expected to be fully implemented by December 30, 2024.
Despite some setbacks—such as Tether discontinuing its euro-pegged stablecoin EURt—euro-backed stablecoins have thrived, with monthly trading volumes exceeding $300 million in 2024. November was particularly strong, with nearly $800 million traded.
As of late 2024, MiCA-compliant stablecoins dominate the European market, with Circle's EURC, Societe Generale's EURCV, and Banking Circle's EURI collectively holding an impressive 91% market share by November. Crypto exchange Binance has emerged as a key player in this space, closely competing with Coinbase after listing EURI in August.
The Future of Stablecoins in Europe
The Kaiko report emphasizes that MiCA regulations are fostering a more stable environment for cryptocurrencies in Europe. By ensuring compliance and consumer protection, these regulations are expected to encourage long-term institutional investment while also promoting innovation within the sector.
As exchanges begin to delist non-compliant stablecoins, compliant assets are likely to gain even more traction. This shift not only benefits larger players who can manage compliance costs but may also pose challenges for smaller entities trying to enter the market.
Overall, the rise of MiCA-compliant stablecoins signals a new era for cryptocurrency in Europe—one that prioritizes regulation and stability while paving the way for future growth. Rapidz is regulated in Lithuania and licensed to operate within the European Economic Area (EEA). We adhere to MiCA regulations, ensuring that we provide secure and trustworthy digital finance solutions to both business-to-business (B2B) and business-to-consumer (B2C) markets.
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