European crypto regulations are set to bring significant changes to the stablecoin market, with an increase in the use of Euro-pegged stablecoins, as reported by digital asset analytics firm Kaiko.
The Markets in Crypto Assets (MiCA) law, which will come into effect later this month, is expected to have a major impact on stablecoins in Europe. Kaiko highlights that Binance has already announced plans to restrict stablecoins that do not meet the MiCA standards, while Kraken is also reviewing compliance with EU regulations, which could lead to the delisting of non-compliant stablecoins for European users.
Kaiko believes that these new regulations could benefit Euro-backed stablecoins that comply with MiCA standards, as their usage is on the rise in Europe. Despite lagging behind the US and APAC in crypto trading, Euro-backed stablecoins have seen a significant increase in volume since the beginning of the year. Their average weekly volume in 2024 was $270 billion, marking a substantial growth compared to their EU counterparts. While only 1.1% of transactions are currently conducted using Euro-backed stablecoins, this share has been steadily increasing since 2020 and is now at an all-time high.
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