Europe’s stablecoin market has experienced significant growth, with user adoption jumping from 16% to 34% between 2024 and 2025. Despite this surge, USD-backed stablecoins continue to dominate the market, constituting a staggering 99.8% of the total stablecoin supply in circulation.
The recently implemented Markets in Crypto-Assets (MiCA) regulation presents Brussels with leverage to alter this landscape. The comprehensive framework, launched late last year, establishes harmonized rules specifically designed to foster the development and adoption of euro-denominated stablecoins.
This regulatory push is motivated by concerns over Europe’s heavy reliance on USD-backed stablecoins. This dependence exposes the region to US monetary policy decisions and potential regulatory actions emanating from the United States.
Officials believe promoting credible euro-backed alternatives through MiCA’s standards will reduce vulnerability to external financial systems. The goal is to build a more resilient and sovereign European cryptocurrency ecosystem less tethered to the US dollar.
Wider adoption of euro-backed stablecoins could also streamline international transactions for European entities and users. Supporters contend it offers a crucial hedge against the systemic risks associated with the current dominance of dollar-linked stablecoins.