Euro-stablecoins are losing the race: why the dollar and the lira have left the EU behind
The stablecoin market is showing paradoxical dynamics: tokens pegged to the Turkish lira have surpassed their euro counterparts in transaction volume. In 2025, the volume of on-chain transfers in lira reached $3.4 billion, making the Turkish currency the second most popular after the dollar in the "stablecoin" segment. Where does the euro stand in this configuration?
The gap between dollar and euro stablecoins is colossal — 200-fold. And this lag is not narrowing but only worsening. Let's try to understand why the European Union lost the blockchain race without really starting it, and what steps could rectify the situation.
Disappointing Figures
The global stablecoin market reached an all-time high in 2026. The total capitalization of the segment exceeded $316 billion — roughly 10% higher than January figures. Dollar-pegged coins dominate: Tether (USDT) is valued at $185 billion, and Circle (USDC) at $75 billion. The share of euro tokens totals just $912 million, i.e., less than 0.3% of the dollar-pegged market.
Leading players in the euro segment: EURC from Circle ($430 million), EURCV from Societe Generale ($130 million), and 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 ranking. Trading volumes are equally telling: the daily turnover of euro stablecoins is about $100 million compared to $70 billion for dollar ones.
The surge in euro token activity in the first quarter of 2026 after the MiCA rules came into force in the European Union — March turnover exceeded $700 million — proved temporary. Values, which were still incomparable to dollar coins, began to decline. Moreover, the euro lost not only to the dollar but also to the Turkish lira.
Despite MiCA
It would seem that the MiCA regulatory framework should have given euro stablecoins a competitive advantage. However, it became the main obstacle. The requirement to hold at least 30% of reserves in local bank deposits (up to 60% for major players) creates more burdensome conditions than the US GENIUS Act. US authorities allow rules to be set at the state level, expanding jurisdictions to meet different market demands.
European regulators reject any attempts to soften the norms. In spring, Bruegel proposed lowering liquidity requirements, but the ECB rejected the initiative. Regulator President Christine Lagarde cited risks to the banking system, including the threat to traditional lending. Instead of supporting stablecoins, the ECB is betting on tokenized bank deposits, which, in her view, combine the reliability of accounts with blockchain programmability.
The price of caution is a strategic lag. ECB Executive Board member Isabel Schnabel stated that the growth of dollar stablecoins could strengthen the US currency's dominance and undermine the euro's role in tokenized finance. The alternative in the form of a digital euro (CBDC) is not expected until the second half of 2027 at the earliest.
Market and Structural Obstacles
Regulation is not the only reason. Euro tokens face headwinds from the dollar's network effect, low demand, and regional peculiarities. The crypto infrastructure was built around the dollar, creating a recursive loop: high liquidity attracts users, who further increase it. Euro tokens offer a limited number of trading pairs and minimal arbitrage opportunities.
The success of the Turkish lira is explained by a weak banking system. In Europe, there is no such "pain": EU financial institutions provide cheap instant payments through TARGET2 and TIPS, reducing the need for decentralized alternatives. Two-thirds of European banks cited insufficient demand for stablecoins.
Pressure on major players exacerbates the situation. From July 1, crypto companies without a MiCA license must cease servicing clients in the EU. By May, only 194 out of 3,000 companies previously operating in the region had received official permission. Tether, the market leader, stopped issuing the euro stablecoin EURT back in 2024, citing incompatibility of reserve requirements with its business model. European divisions of Binance, Bybit, and OKX have already removed trading pairs with USDT.
Analyst's Conclusion
The prospects for euro stablecoins remain uncertain. The lack of demand from banks and retail, combined with strict regulation, creates a "red flag" for issuers. Tokenization and CBDC should provide a boost for the development of the EU's digital economy, but their implementation will take years. During this time, dollar assets will further strengthen their dominance, and the euro risks being left on the sidelines of the blockchain race.