The Rise of Euro-Pegged Stablecoins: A New Era Post-MiCA

The euro has recently made significant strides in the stablecoin market, evolving from a niche aspect of decentralized finance (DeFi) into a prominent regulated product category. Following the implementation of the Markets in Crypto-Assets (MiCA) regulations in June 2024, euro-pegged stablecoins have transitioned into a sphere governed by explicit compliance rules, ensuring that issuers and exchanges adhere to new standards regarding documentation, reserve requirements, and licensing.

MiCA Regulations: An Overview

Under MiCA, stablecoins that reference a single fiat currency, such as the euro, are classified as “e-money tokens.” In contrast, tokens linked to a collection of assets are categorized as “asset-referenced tokens.” As such, if an issuer or exchange intends to maintain a euro stablecoin for European Union (EU) users, they must comply with the new regulations, which manifest in the form of listings, disclosures, and routing protocols.

As stated in DECTA’s “Euro Stablecoin Trends Report 2025,” the impact of MiCA has been substantial. Over the year following its rollout, the market cap of major euro-pegged stablecoins surged by 102%, rebounding from a 48% decline in the preceding year. By May 2025, the combined market cap reached $500 million, and monthly transaction volumes skyrocketed from $383 million to $3.832 billion, with EURC and EURCV witnessing the most significant increases in transaction volume within the dataset.

The Rapid Market Share Shift: A Compliance-Driven Evolution

Despite the positive market statistics, it is essential to recognize that the swift shift in euro stablecoin market share was driven more by compliance-related adjustments than an influx of fresh demand. According to Kaiko’s research from October 2024, three months after MiCA’s inception, compliant euro stablecoins such as EURC and Société Générale’s EURCV captured a remarkable 67% market share. However, trading volumes for euro-backed stablecoins remained stagnant at around $30 million weekly, significantly below the ~$100 million observed in March 2024.

In essence, the overall market pie did not grow; it merely rearranged itself to accommodate the new compliance landscape, leading to delistings and adjustments in venue policies. By November 2024, compliant euro stablecoins accounted for a staggering 91% of market share.

Key Lessons for Traders: Liquidity and Market Depth

The underlying lesson for understanding liquidity in the euro stablecoin sphere is straightforward: while market share can shift rapidly due to regulatory compliance, it does not inherently translate to improved trading conditions for assets like BTC-EUR or ETH-EUR. A stablecoin’s availability does not guarantee better execution opportunities if it is poorly integrated with trading venues, lacks substantial liquidity, or is merely used as a settlement tool that funnels into limited order books.

For improved liquidity, one would expect to see tighter bid-ask spreads and deeper market depths. The bid-ask spread is the difference between the best buy and sell prices, representing a cost to traders. Market depth indicates how much of an asset can be traded without influencing its price. Kaiko measures “1% market depth,” reflecting the amount of size available within 1% of the mid-price on both sides of the order book.

The State of BTC-EUR and ETH-EUR Trading: A Concentrated Landscape

Euro-denominated bitcoin trading demonstrated a notable increase, as Kaiko reported BTC-EUR’s share of global bitcoin-fiat trading volume jumped from 3.6% to nearly 10% in 2024. However, this uptick is not attributed to widespread improvements across all trading venues; rather, trading volume has concentrated in a few key platforms. Bitvavo, Kraken, Coinbase, and Binance collectively accounted for over 85% of euro-denominated trading volume in November 2024. Bitvavo dominated the landscape, holding close to 50% of total trading volume.

This concentration raises pertinent questions about liquidity, emphasizing that while some venues exhibit improved trading conditions, others remain costly and inefficient. For retail traders, liquidity may appear enhanced at the frontrunners, but sophisticated traders know that the routing choices become crucial—more than regulatory claims.

Evaluating the Role of Euro Stablecoins

Did euro stablecoins genuinely catalyze the improvement in euro liquidity? While stablecoins play a necessary role as a bridge in the crypto landscape, their presence alone does not guarantee better trading execution. Kaiko highlights that the move towards compliant euro stablecoins can predominantly be seen as a product of regulatory shifts rather than a spike in actual market demand.

The execution quality for trades largely depends on the specific venues. As noted in Kaiko’s analysis, spreads vary widely across different platforms. For example, the 30-day average bid-ask spread for the top tokens ranged from over 20 basis points on some exchanges to as low as 2.6 basis points on Bitvavo and 3 basis points on Kraken. Daily depth data indicates that BTC-EUR emerged as the second-deepest BTC-fiat market, averaging 758 BTC—significantly more than BTC-GBP’s 350 BTC.

Despite the critical role that euro stablecoins play in enhancing operational fluidity, it becomes evident that without consolidated liquidity across key platforms, the benefits could remain limited. For example, activity levels involving euro stablecoin pairs differ across exchanges. While stablecoin-to-euro pairs account for approximately half of Coinbase’s euro volumes, that figure drops to 4% on Binance and 2% on Bitvavo.

Conclusion: A Regulatory Milestone or a Fragmented Landscape?

In summary, MiCA’s first year successfully established a clearer regulatory framework surrounding euro stablecoins, resulting in the official recognition of a viable and compliant product lineup. The story of the “doubled market cap” is undeniably substantiated by DECTA’s published data, as is the push towards making the euro more tradable. However, the liquidity improvements appear limited to a concentrated number of venues. Therefore, the future of Europe’s crypto market hinges on whether liquidity will extend beyond a handful of prominent platforms or remain segmented, characterized by isolated pockets of accessibility.

For traders navigating this dynamic landscape, the crucial takeaway is to appreciate that while euro stablecoins serve as essential infrastructures, the effective cost of trading is dictated by market venues. MiCA’s implementation may have bolstered the credibility of these rails, but the quality and accessibility of the underlying books will ultimately determine the trading experience across the euro-denominated crypto market.