Euro Stablecoins Still Lag Behind the Dollar Onchain
MiCA has given euro-pegged tokens more clarity, but dollar stablecoins remain the standard in DeFi. The total euro supply now stands at €711 million.
Key Takeaways
- The euro is much smaller than the dollar onchain; euro stablecoins together stand at €711 million, less than 1% of total stablecoin supply.
- According to Ryan Connor, the gap and FX costs are mainly driven by dollar dependence and the lack of euro-denominated DeFi infrastructure.
- MiCA has given the euro stablecoin market more clarity, allowing regulated tokens like EUROP and EURCV to now drive growth.
The euro is still much smaller than the dollar in the crypto market. According to Ryan Connor of RockawayX, the ratio offchain is about 3 to 1, but onchain it rises to more than 300 to 1. Euro-pegged stablecoins together come to €711 million, less than 1% of total stablecoin supply in dollar terms.
Why the Gap Is So Big
Connor points mainly to two causes: historical dependence on the dollar and a lack of euro-denominated DeFi infrastructure. Stablecoins were originally built for crypto trading priced in dollars, which made USD tokens the default. After that, an entire layer of dollar vaults, lending, and looping grew around that same dollar position.
That created a market where euro capital has a harder time participating. For European asset managers, corporate treasuries, and DeFi users who think in euros, a dollar vault adds extra FX risk. Hedging that dollar exposure back into euros costs about 1%, according to Connor, which quickly eats into net returns.
MiCA Gives Euro Tokens More Room
The current wave is different from the first euro stablecoin phase, which peaked in 2022 at around €630 million and later fell back when EURT was phased out because it lacked MiCA compliance. Now the growth is mainly coming from MiCA-regulated electronic money tokens like EUROP and EURCV. Total supply has now climbed to an all-time high of €711 million.
MiCA, which has been in effect since June 2024, has given the market more clarity around reserves and issuer obligations. That has not suddenly made the euro stablecoin market big, but it has created a tighter framework for parties that want to issue euro products onchain. At the same time, the dominance of dollar stablecoins remains strong, helped by the network effect and the existing infrastructure around them.
What This Means for European Crypto
For European crypto users, this matters because euro-denominated products can narrow the gap between traditional euro capital markets and DeFi. Connor points to euro vaults, native euro credit, and regulated euro stablecoins as the building blocks for a market that is still small but growing. RockawayX also points to euro vaults on Kamino and Morpho, where that euro leg of the leverage trade is already being built.
The broader policy backdrop also plays a role. The European Central Bank is still studying a digital euro, which shows that Europe values control over digital money and payment infrastructure. For the crypto market, that mainly highlights how big the demand is for euro rails that become just as usable as the dollar standard that has dominated for years. Earlier, Revolut already launched a MiCA-compliant euro token, showing that major fintech players are also responding to that demand.
