Euro-pegged stablecoin volume grows as new regulations pose a potential boon for the sector: Kaiko

According to digital asset analytics firm Kaiko, the use of stablecoins is increasing as new European cryptocurrency regulations come into force over time.

In a new report, Kaiko claims that the European cryptocurrency market is facing big changes as regulations affecting stablecoins under the Markets in Crypto Assets Act (MiCA) 2023 come into force later this month.

Kaiko says,

“The upcoming regulations in Europe will soon shake up the stablecoin market. Last week, Binance revealed plans to restrict the sale of stablecoins that do not meet Markets for Crypto Assets (MiCA) standards. Other reports suggest that Kraken actively checks which stablecoins meet European Union standards, potentially leading to delisting of non-compliant stablecoins for their users in the EU.

Kaiko suggests that new cryptocurrency regulations could be a “boon” for MiCA-compliant euro-backed stablecoins as their use suddenly increases in Europe.

“While Europe has traditionally lagged behind the United States and the APAC region when it comes to cryptocurrency trading, volumes of euro-backed stablecoins have increased steadily since the beginning of the year, suggesting that demand is finally picking up in European markets. Their average weekly volume in 2024 was $270 billion, 70 times higher than their EU counterparts. In contrast, just 1.1% of all transactions are made using euro-backed stablecoins. However, it is worth noting that this share has increased from near zero in 2020 and is now at an all-time high.”

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