The European cryptocurrency landscape underwent a significant transformation in 2024, primarily propelled by the introduction of euro-backed stablecoins. This shift can largely be attributed to the Markets in Crypto-Assets Regulation (MiCA). Enforced in June, MiCA aims to provide a clear legal framework for cryptocurrency operations, injecting much-needed regulatory certainty into the market. As a result, euro-backed stablecoins have become instrumental in attracting liquidity and institutional investments, with monthly trading volumes reaching unprecedented levels.
In November alone, the trading volume for euro-backed stablecoins skyrocketed to approximately €800 million, marking a multi-year high. The figures reported by research firm Kaiko, alongside insights from the Dutch crypto exchange Bitvavo, underscore the explosive demand for these stable assets. A significant contribution to this surge can be attributed to Banking Circle’s EURI stablecoin, which saw increased adoption after being listed on Binance. This strong performance was mirrored by other regulatory-compliant tokens such as Circle’s EURC and Sociéte Générale’s EURCV, which together captured a staggering 91% of the euro-backed stablecoin market share by year-end.
The stability and reassurance provided by MiCA have galvanized investor confidence. The regulatory clarity has not only attracted retail investors but also piqued the interest of major institutional players seeking to capitalize on the burgeoning crypto market. However, the landscape is not without its challenges. Recently, Tether announced its withdrawal from the euro-backed stablecoin market with the EURT token, citing ongoing regulatory uncertainties. This decision sheds light on the potentially precarious balance that cryptocurrencies must maintain in an evolving regulatory environment.
The expansion of euro-backed stablecoins reflects a wider surge in the European cryptocurrency market, evidenced by record euro-denominated trading volumes. November data revealed staggering weekly trading volumes that exceeded €12 billion, more than double the figures from the previous month. Bitcoin also reached an impressive milestone, surpassing $100,000 for the first time, while the euro reinforced its position as the third most-transacted fiat currency in global crypto exchanges. The euro’s share in Bitcoin-fiat trading experienced a remarkable increase, moving from 3.6% up to nearly 10%.
Key cryptocurrency exchanges, including Bitvavo, Kraken, and Coinbase, have been central to this growth story, with Bitvavo emerging as a leader in euro-denominated trading volume, commanding nearly half of the market. This is a testament to their effective strategies, which included expanding their offering to over 331 new euro-denominated pairs in 2024 to meet the rising demand. Enhanced liquidity conditions were also marked by a doubling of the combined market depth for euro-denominated pairs, further facilitating trading activity.
2024 has been a landmark year for euro-backed stablecoins in Europe, and their growth is likely to influence broader market trends and regulatory discussions moving forward. The interplay between innovation, regulation, and market dynamics will be critical to watch as the European cryptocurrency ecosystem continues to evolve.
