Euro-Pegged Stablecoins Surge as Europe Eyes Crypto Expansion

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Euro-Pegged Stablecoins Surge as Europe Eyes Crypto Expansion
  • Kaiko smart data indicates increased adoption of crypto trading in Europe.
  • Europe is set to introduce new cryptocurrency regulations to strengthen its stablecoin sector.
  • Euro-pegged stablecoins have achieved record trading volumes, but USD-backed stablecoins dominate the crypto space.

Kaiko data reveals that crypto trading is experiencing increased adoption in the European market. Since the beginning of the year, the volume of Euro-backed stablecoins has grown, signaling increased adoption in European markets.

Europe is set to issue new cryptocurrency regulations to bolster its stablecoin sector and potentially rival the U.S. and APAC cryptocurrency markets.

Last week, Binance outlined plans to delist stablecoins that fall short of the bloc’s Markets in Crypto Assets (MiCA) standards. Similarly, the popular cryptocurrency exchange Kraken will restrict stablecoins that fail to meet European Union standards.

Since the start of March, Euro-pegged stablecoins have hit record-breaking metrics. The total trading volume of Tether’s EURT, Stasis EURS, Société Générale’s EURCV, Anchored’s AEUR, and Circle’s EURCV has consistently exceeded the $40 million mark. Notably, AEUR rebounded from a slow start in December, accounting for over 50% of that volume.

US Dollar-backed stablecoins are leading the crypto space, even surpassing traditional USD; about 90% of cryptocurrency trades are conducted using USD-pegged stablecoins. Year-to-date, USD-backed stablecoins averaged a weekly volume of $270 million, compared to the $3.8 million averaged by their EURO counterparts.

In 2024, EU-pegged tokens account for 1.1% of the total stablecoin transactions. However, this represents a significant increase from nearly negligible numbers in 2020 and marks an all-time high.

Currently, USDT/EUR trading pairs are outpacing EUR-denominated Bitcoin transactions on both Binance and Kraken. This indicates that these exchanges serve as key fiat off-ramps for EU traders.

While exchanges have yet to specify which stablecoins will be unauthorized, Kraken is reportedly evaluating the potential removal of Tether’s USDT. Tether’s trading volume is primarily centered around the U.S. market, but it remains an essential trading asset for European users.

Although OTC trading will still offer USDT-EUR liquidity, many traders might opt for regulated alternatives like USDC. This shift could provide a safer and more compliant option for those concerned about regulatory issues surrounding Tether.

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