Euro-pegged stablecoin usage is on the rise in response to the implementation of new European crypto regulations, as reported by digital asset analytics firm Kaiko.

According to Kaiko’s latest findings, the European crypto market is undergoing significant transformations as the regulations outlined in the 2023 Markets in Crypto Assets (MiCA) law gradually come into effect this month. Kaiko highlights the imminent impact of these regulations on the stablecoin market in Europe.

Kaiko states, “The impending regulatory changes in Europe are set to disrupt the stablecoin market. Binance recently announced plans to restrict stablecoins that do not comply with the MiCA standards of the bloc. Additionally, reports indicate that Kraken is actively assessing which stablecoins meet the European Union’s criteria, potentially resulting in the removal of non-compliant stablecoins for EU users.”

The analysis from Kaiko suggests that the enforcement of new crypto regulations could be advantageous for Euro-backed stablecoins that adhere to MiCA standards, as their usage is experiencing a sudden surge in Europe.

“While Europe has typically trailed behind the US and APAC in terms of crypto trading, Euro-backed stablecoins have seen a consistent increase in trading volume since the start of the year. Their average weekly trading volume in 2024 reached $270 billion, a significant 70-fold increase compared to their EU counterparts. Despite this growth, only 1.1% of transactions utilize Euro-backed stablecoins. Nonetheless, it is noteworthy that this share has risen from close to zero in 2020 and is currently at an all-time high.”

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