Regulation
Euro-pegged stablecoin volumes grow as new regulation acts as a potential boon for the sector: Kaiko
According to digital asset analytics firm Kaiko, the use of European-pegged stablecoins is increasing amid new European cryptocurrency regulations that will gradually come into effect over time.
In a new report, Kaiko He says that the European cryptocurrency market is facing major changes due to regulations impacting stablecoins in the 2023 Markets in Crypto Assets (MiCA) law enter effect after this month.
Kaiko says,
“The impending regulation in Europe is about to shake up the stablecoin market. Last week Binance revealed plans to restrict stablecoins that do not meet the block’s Markets in Crypto Assets (MiCA) standards. Elsewhere, reports suggest that Kraken has been actively reviewing which stablecoins meet European Union standards, potentially leading to the removal of non-compliant stablecoins for their EU users.
Kaiko suggests that new cryptocurrency regulations could be a “boon” for MiCA-compliant euro-backed stablecoins as their use is suddenly on the rise in Europe.
“While Europe has traditionally lagged behind the US and APAC when it comes to cryptocurrency trading, Euro-backed stablecoins have steadily grown in volume since the start of the year, suggesting demand is finally picking up in European markets. Their average weekly volume in 2024 was $270 billion, 70 times higher than that of their EU counterparts. In contrast, only 1.1% of all transactions are carried out using collateralized stablecoins from the Euro. However, it is noteworthy that this share has increased from almost zero in 2020 and is currently at an all-time high.”
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