Euro-Backed Stablecoin Volumes Surge Amidst Regulatory Shifts

• Since March, Euro-backed stablecoins have sustained growth, exceeding $40 million in weekly volume.
• Regulatory changes by Binance and Kraken may reshape the stablecoin market in Europe.
• USD-backed stablecoins dominate, but euro-backed stablecoins have an all-time high in market share.

Kaiko, an analysis platform, has reported a surge in the trading volume of Euro-backed stablecoins via a tweet on the X platform. Kaiko further noted that traditionally, Europe has lagged behind the US and APAC in crypto trading. However, demand indicates a shift in European markets. Regulatory changes are also impacting the stablecoin market, with Binance and Kraken shifting to meet new standards.

Demand for stablecoins that are Euro-backed, such as Tether’s EURT and Stasis EURS, has been on the rise. Since March, the combined weekly volume of these stablecoins has consistently exceeded $40 million. This marks the longest sustained period of growth on record. Notably, AEUR, despite a rough launch on Binance in December, now commands over 50% of the total market volume. This suggests that euro-backed stablecoins are becoming a preferred option for European traders.

Regulatory changes are playing a crucial role in this shift. Binance plans to restrict stablecoins that do not comply with the EU’s Markets in Crypto Assets (MiCA) standards. Similarly, Kraken is reviewing its stablecoin offerings to ensure compliance, potentially leading to the delisting of coins that do not comply. These moves are expected to further shape the stablecoin market in Europe.

Despite the growth of euro stablecoins, stablecoins with USD backing continue to dominate the global crypto market. Kaiko further noted that they account for nearly 90% of all crypto transactions. In 2024, their average weekly volume reached $270 billion, which is 70 times higher than their European counterparts. However, the market share of stablecoins with Euro backing has grown from nearly zero in 2020 to an ATH of 1.1%.

USDT trading pairs against the euro have become some of the highest-volume instruments on exchanges, such as Binance and Kraken. This surpasses the volume of euro-denominated Bitcoin trades. It underscores the importance of these exchanges as fiat off-ramps for European traders.