As a result, the Turkish currency has become the second most popular in the “stablecoin” segment after the dollar. Where, then, does the euro fit into this picture?
The gap between dollar-pegged and euro-pegged stablecoins isn’t even measured in percentages—it’s a 200-fold difference. And this gap isn’t narrowing; it’s only growing.
The website forklog.com set out to understand why the EU lost the “blockchain race” before it had even really begun—and how the situation can be rectified.
Disappointing Figures
The global stablecoin market reached an all-time high in 2026. At the time of writing, the segment’s total market capitalization exceeded $316 billion—about 10% higher than in January.
Dollar-pegged “stablecoins” dominate the market: Tether (USDT) has a market valuation of over $185 billion, while Circle (USDC) is valued at about $75 billion.
Meanwhile, the share of euro-pegged stablecoins is so small as to be negligible—just $912 million, or less than 0.3% of the dollar-pegged stablecoin market.
Leading players in the euro segment:
– Circle’s EURC — $430 million;
– EURCV from Societe Generale — $130 million;
– EURI from Banking Circle S.A. — $55 million.
Even the largest euro-backed token—EURC—ranks only 12th among all “stablecoins” and 86th in the overall ranking of digital assets.
Trading volumes are equally telling. The daily trading volume of euro-pegged stablecoins currently stands at around $100 million, while dollar-denominated assets process more than $70 billion.
At the same time, analysts at TRM Labs noted a surge in activity for euro-pegged tokens in the first quarter of 2026 following the entry into force of the MiCA regulations in the European Union—in March, trading volume exceeded $700 million. However, these figures—which remain difficult to compare with those of dollar-denominated coins—ultimately began to decline.
Furthermore, the euro has now fallen behind not only the dollar but also the Turkish lira. Standard Chartered’s subsidiary, Zodia Markets, processed $3.4 billion in on-chain transfers in lira in 2025.
Contrary to MiCA
It would seem that the EU’s regulatory framework for the crypto market—MiCA—was supposed to give euro-pegged stablecoins a competitive advantage. Clear rules, consumer protection, and clarity for issuers. However, the regulation has become the main obstacle to the development of European tokens.
The main issue is the collateral requirements. Under MiCAR (the MiCA regulatory framework for “stablecoins”), issuers are required to hold at least 30% of their reserves as deposits with local banks, while large players must hold up to 60%.
This regulatory framework creates more onerous conditions for companies than the U.S. GENIUS Act. U.S. authorities allow individual rules for issuers to be established at the state level, expanding the “range of jurisdictions” to accommodate the diverse needs of market participants.
EU regulators, on the other hand, have consistently rejected any attempts to relax the rules. This spring, the Brussels-based economic research center Bruegel proposed lowering liquidity requirements to support the local stablecoin market. However, the ECB rejected the initiative.
ECB President Christine Lagarde cited risks to the stability of the banking system, particularly due to the threat to traditional lending and the difficulty of controlling interest rates.
The European central bank believes that all these factors lead to disintermediation. The logic is simple: if issuing euro-pegged stablecoins becomes too easy and attractive, funds will begin to flow from accounts at traditional banks into token reserves.
Instead of supporting stablecoins, the ECB is betting on tokenized bank deposits. According to Lagarde, they combine the reliability of traditional accounts with the speed and programmability of distributed ledger technology.
The price of European caution is a strategic lag. As ECB Executive Board member Isabel Schnabel stated, nearly all stablecoins are denominated in dollars, and their growth could reinforce the dominance of the U.S. currency and undermine the euro’s role in tokenized finance.
“The dollar’s dominance will grow, not necessarily due to stronger economic performance, but thanks to network effects, scale, and first-mover advantages,” the official explained.
Another alternative is the digital euro. However, the launch of the European CBDC is not expected until at least the second half of 2027, with a 12-month testing period.
Market and Structural Barriers
Regulation is not the only reason euro-pegged stablecoins are lagging behind. Economic, regional, and many other factors are working against them.
Of course, the dollar’s network effect plays a role. From the very beginning, crypto infrastructure was built around the U.S. currency. Almost all modern blockchain platforms are oriented toward USD pairs.
As a result, the digital asset market has fallen into a recursive loop: dollar-pegged stablecoins have high liquidity, which attracts more and more users, who in turn further increase liquidity.
In contrast, euro-denominated tokens offer a limited number of trading pairs and minimal arbitrage opportunities on a global scale. Consequently, the prospect of traders’ interest shifting toward the European currency appears increasingly unlikely with each passing year.
Another important factor is the low demand for euro-denominated tokens—both from retail customers and from banks.
The success of the Turkish lira as a stablecoin can be attributed to the country’s weak banking system, including slow and expensive money transfers. In Europe, this “pain point” does not exist.
EU financial institutions provide low-cost, round-the-clock instant payments. Payment systems like TARGET2 and TIPS already process euro transactions efficiently, reducing the need for a decentralized alternative.
At the same time, two-thirds of European banks cited insufficient demand for stablecoins.
Pressure on major players adds to the EU’s challenges. According to ESMA regulations, starting July 1, crypto companies without a MiCA license are required to stop serving customers from the European Union.
As of May, only 194 companies had received official authorization. This is a small fraction of the 3,000 firms that previously operated in the region.
The departure of the crypto market leader—Tether—is likely to be the toughest test for the Eurozone. Back in 2024, the company stopped issuing the euro-pegged stablecoin EURT. By the spring of 2026, the issuer still had not received regulatory approval.
According to Tether CEO Paolo Ardoino, the requirement to hold 60% of reserves in European bank deposits is fundamentally incompatible with the company’s business model, so they did not even bother to apply.
The European divisions of major centralized exchanges such as Binance, Bybit, and OKX have already removed USDT trading pairs.
The outlook for euro-pegged stablecoins is, to put it mildly, uncertain. It’s difficult to develop this segment when there is no demand from banks or retail investors, and regulators are putting obstacles in the way of interested companies.
For the issuers themselves, this state of affairs is a clear “red flag.” Why enter a market where no one is waiting for you?
Tokenization and CBDCs should provide the impetus for the development of the European Union’s digital economy. But it will take several years for them to be fully implemented, and during that time, dollar-denominated assets will pull the blanket even further over themselves.
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