MiCA-Compliant Stablecoins Lead Market in Europe Amid Regulatory Growth: Kaiko Report

Europe’s cryptocurrency market is experiencing significant growth, particularly in euro-denominated trading volumes. Research by Kaiko and Bitvavo reveals that monthly euro trading volumes have consistently surpassed the 2023 averages, with notable peaks in March and November.

Euro Trading Volumes Surge in 2024

Over $42 billion in trading volume was recorded in both months, signaling the euro’s growing importance in the crypto market.

As of late 2024, the euro accounts for 7.5% of the total fiat-based cryptocurrency trading volume, making it the third most-traded currency after the U.S. dollar, which holds a dominant 49.9%, and the Korean won at 33.4%.

The rise in euro trading volumes comes alongside an evolving regulatory landscape in Europe.

The European crypto market has seen a major shift in stablecoin usage with the introduction of the Markets in Crypto-Assets (MiCA) regulation.

This regulatory framework, which came into effect on June 30, 2024, and will be fully implemented by December 30, 2024, is reshaping the stablecoin landscape by ensuring that asset-referenced and electronic money tokens comply with new legal standards.

One notable development in the MiCA-compliant stablecoin market is discontinuing Tether’s euro-pegged stablecoin, EURt, on all blockchains.

On November 27, 2024, Tether announced that it would halt minting EURt and cease its support on all blockchains.

Despite Tether’s exit, the use of euro-backed stablecoins has flourished in Europe.

As of late 2024, MiCA-compliant stablecoins dominate the market, with Circle’s EURC, Societe Generale’s EURCV, and Banking Circle’s EURI collectively controlling 91% of the European stablecoin market.

Key Players in Europe’s Stablecoin Market

Several players have emerged as leaders in Europe’s stablecoin space. Circle’s EURC, Societe Generale’s EURCV, and Banking Circle’s EURI are at the forefront of this new era of compliant digital currencies. Together, they have captured 91% of the stablecoin market in Europe.

These stablecoins are designed to meet the new MiCA regulatory standards, providing a secure and reliable alternative to traditional cryptocurrencies for European traders.

Crypto exchanges such as Binance and Coinbase are also pivotal in expanding the market for MiCA-compliant stablecoins. Binance made significant strides in this market by listing EURI in August 2024, almost matching Coinbase’s market share.

This move positions Binance as a major player in the European stablecoin market, further solidifying the growing importance of MiCA-compliant stablecoins in the region.

Coinbase has also adjusted its services in response to the new MiCA regulations. Starting December 1, 2024, the exchange will end its USDC rewards program for users in the European Economic Area (EEA).

The decision is part of the changes prompted by MiCA’s stricter rules for e-money tokens like USDC.

As Europe continues to develop its regulatory framework for cryptocurrencies, MiCA-compliant stablecoins are expected to play an even more prominent role in the region’s digital economy.