• In November, the volume of euro-backed stablecoins surged to about €800 million.
• With its regulatory clarity, MiCA has played a vital role in drawing institutional participants.

With the help of the Markets in Crypto-Assets Regulation (MiCA), euro-backed stablecoins became a major force in the expansion of the European cryptocurrency sector in 2024. After gaining interest from regional institutional investors and liquidity providers, these coins set a new monthly volume record.

In November, the volume of euro-backed stablecoins surged to about €800 million, a level not seen in some years. The most recent analysis from research company Kaiko and cryptocurrency exchange Bitvavo, based in the Netherlands, states that this dramatic surge is mostly due to Banking Circle’s EURI stablecoin, which became quite popular after being listed on Binance.

MiCA Playing Key Role

In addition to EURC from fintech company Circle and EURCV from Société Générale, other MiCA-compliant stablecoins also played a role in the increase, with a combined 91% market share for euro-backed stablecoins at year’s end.

Moreover, with its regulatory clarity, MiCA has played a vital role in drawing institutional participants to the market, increasing liquidity, and reassuring investors. Nevertheless, the ever-changing framework continues to face obstacles, as seen by Tether’s decision to stop supporting EURT, its euro-backed stablecoin, due to regulatory concerns.

Furthermore, looking at the bigger picture, 2024 was a watershed year for the European cryptocurrency sector as a whole, with record-high euro-denominated transaction volumes. With Bitcoin hitting an all-time high of over $100,000 in November, weekly transaction volumes surpassed €12 billion, more than tripling those of October.

The Euro’s proportion of Bitcoin-fiat trading increased from 3.6% to over 10%, solidifying its position as the third most traded fiat currency in worldwide crypto markets, behind the USD and the Korean won. The increasing institutionalization of Bitcoin and the loosening of regulatory constraints are the causes of this expansion.

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