The digital asset market is facing an unusual situation: stablecoins pegged to the Turkish lira have surpassed euro-denominated tokens in transaction volume. According to Zodia Markets, a subsidiary of Standard Chartered, on-chain transfers in lira reached $3.4 billion in 2025.
This makes the Turkish currency the second most popular in the stablecoin segment, following the dollar. So, where does the euro fit into this picture?
The gap between dollar and euro stablecoins is not just a matter of percentage—it’s a staggering 200 times. This disparity is not narrowing; it’s only growing. We sought to understand why the EU has lost a blockchain race that barely began and how the situation can be improved.
Disheartening Figures
The global stablecoin market hit an all-time high in 2026. At the time of writing, the total market capitalization exceeded $316 billion—about 10% higher than in January.
Source: CoinMarketCap.Dollar stablecoins dominate significantly: Tether (USDT) has a market valuation of over $185 billion, while Circle (USDC) stands at around $75 billion.
In contrast, the share of euro stablecoins is so small it can be disregarded—only $912 million, or less than 0.3% of the dollar stablecoin market.
Source: CoinMarketCap.The leading euro stablecoins include:
- EURC from Circle — $430 million;
- EURCV from Societe Generale — $130 million;
- EURI from Banking Circle S.A. — $55 million;
Even the largest euro-based token, EURC, ranks only 12th among all stablecoins and 86th in the overall digital asset rankings.
Trading volumes are equally telling. Daily turnover for euro stablecoins is currently around $100 million, while dollar assets process over $70 billion.
Moreover, analysts from TRM Labs recorded a spike in euro token activity in the first quarter of 2026 following the implementation of MiCA regulations in the EU—March saw trading volumes exceed $700 million. However, these figures still pale in comparison to dollar stablecoins and have since declined.
Source: TRM Labs.Additionally, the euro has fallen behind not only the dollar but also the Turkish lira. Zodia Markets reported on-chain transfers in lira totaling $3.4 billion in 2025.
Against MiCA
Seemingly, the EU's regulatory framework for the crypto market, known as MiCA, was supposed to give euro stablecoins a competitive edge. Clear rules, consumer protection, and clarity for issuers were expected benefits. However, the document has become a major hindrance to the development of European tokens.
The main issue lies in the collateral requirements. Under MiCAR (the regulatory document for stablecoins within MiCA), issuers must hold at least 30% of reserves in deposits at local banks, with larger players required to hold up to 60%.
Such regulatory frameworks create more burdensome conditions for companies compared to the U.S. GENIUS Act, which allows for state-level rules for issuers, broadening the "jurisdictional options" for market participants.
In contrast, EU regulators have consistently rejected any attempts to ease these requirements. In the spring, the Brussels-based economic research center Bruegel proposed lowering liquidity requirements to support the local stablecoin market. However, the ECB dismissed the initiative.
ECB President Christine Lagarde cited risks to the stability of the banking system, particularly due to threats to traditional lending and the complexities of controlling interest rates.
All these factors lead to disintermediation, according to the European central bank. The logic is simple: if issuing euro stablecoins becomes too easy and attractive, funds will start flowing from traditional bank accounts into token reserves.
Instead of supporting stablecoins, the ECB is focusing on tokenized bank deposits. Lagarde believes they combine the reliability of traditional accounts with the speed and programmability of distributed ledger technology.
The price of European caution is strategic lag. As noted by ECB board member Isabel Schnabel, nearly all stablecoins are denominated in dollars, and their growth could reinforce the dominance of the U.S. currency while undermining the euro's role in tokenized finance.
“The dominance of the dollar will strengthen not necessarily due to better economic indicators, but because of 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 the second half of 2027, with a 12-month testing period.
Market and Structural Barriers
Regulation is not the only reason for the lagging euro stablecoins. Economic, regional, and various other factors are also at play.
Of course, the dollar's network effect plays a role. The crypto infrastructure has been built around the U.S. currency from the start. Almost all modern blockchain platforms are focused on USD pairs.
This has led the digital asset market into a recursive loop: dollar stablecoins have high liquidity, attracting more users, which in turn further increases liquidity.
In contrast, euro tokens offer a limited number of trading pairs and minimal arbitrage opportunities on a global scale. Thus, the prospect of traders shifting their interest toward the euro appears increasingly unlikely each year.
Another significant factor is the low demand for euro-denominated tokens—from both retail clients and banks.
The success of the Turkish lira in stablecoin format can be attributed to a weak banking system, including slow and expensive transfers. Europe does not face such "pain points."
EU financial organizations provide cheap, round-the-clock instant payments. Payment systems like TARGET2 and TIPS effectively handle euro transactions, reducing the need for a decentralized alternative.
At the same time, two-thirds of European banks indicated insufficient demand for stablecoins.
Adding to the EU's challenges is pressure on major players. According to ESMA regulations, as of July 1, crypto companies without MiCA licenses must cease servicing clients from the EU.
By May, only 194 companies had received official approval. This is a small fraction of the 3,000 firms that previously operated in the region.
A significant challenge for the Eurozone is likely to be the exit of market leader Tether. Back in 2024, the company ceased issuing the euro stablecoin EURT. By spring 2026, the issuer had still not received regulatory approval.
According to Tether's 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 apply for approval.
European branches of major centralized exchanges like Binance, Bybit, and OKX have already removed trading pairs with USDT.
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The prospects for euro stablecoins are, to put it mildly, unclear. It is challenging to develop the segment when there is a lack of demand from banks and retail, and regulators are putting obstacles in the way of interested companies.
For the issuers themselves, this situation is an obvious "red flag." Why enter a market where no one is waiting for you?
Tokenization and CBDCs should provide a boost for the digital economy in the EU. However, full implementation will take several years, during which time dollar assets will likely pull the blanket even further in their direction.