The European crypto market is undergoing a significant transformation, especially concerning euro-pegged stablecoins. What was once a niche corner of decentralized finance (DeFi) has rapidly evolved into a regulated product category thanks to the implementation of the Markets in Crypto-Assets (MiCA) regulation. This shift, which saw MiCA’s stablecoin rules kick in during June 2024, has introduced a structured framework of paperwork, reserve requirements, and clear licensing pathways for issuers and exchanges operating within the EU.
Under MiCA, stablecoins that maintain a peg to a single fiat currency, like the euro, are classified as 'e-money tokens'. Those tied to a basket of assets fall under 'asset-referenced tokens'. This distinction means that any issuer or exchange wishing to offer a euro stablecoin to EU users must now navigate explicit compliance burdens, influencing everything from product listings to disclosure requirements and trading routes.
The Euro Stablecoin Surge: A Look at the Numbers
The initial impact of MiCA on euro stablecoins has been nothing short of dramatic. According to DECTA’s "Euro Stablecoin Trends Report 2025", the 12 months following MiCA’s rollout witnessed a staggering 102% increase in the combined market capitalization of major euro-pegged stablecoins. This impressive growth starkly reverses a 48% decline observed in the 12 months leading up to MiCA's introduction. By May 2025, the aggregated market cap had reached $500 million, while monthly transaction volumes skyrocketed from $383 million to an incredible $3.832 billion, with EURC and EURCV leading the charge in transactional activity.
This data paints a very positive picture of robust growth for stablecoin infrastructure in the EU. However, beneath these impressive headline figures lies a more complex reality that directly impacts traders' profit and loss statements: the nuances of the orderbook and how liquidity is actually distributed.
Behind the Boom: A Compliance-Driven Reshuffle
To truly understand the rapid increase in euro stablecoin market share, it's essential to acknowledge a crucial factor: much of this early MiCA 'adoption' wasn't driven by a sudden surge in fresh demand from new users. Instead, it was largely a compliance-driven restructuring of the existing market.
Kaiko's October 2024 analysis highlighted this 'shelf reset' phenomenon. Roughly three months after MiCA’s June start, MiCA-compliant euro stablecoins, including EURC and Société Générale’s EURCV, hit a record 67% market share. Yet, Kaiko also noted that weekly trading volumes for these EUR-backed stablecoins remained relatively stable at around $30 million, a significant drop from the ~$100 million levels seen in March 2024. This suggests that the overall market size didn't expand dramatically; rather, existing assets were simply rearranged to comply with the new regulatory framework.
By November 2024, this market realignment was largely complete. Kaiko’s subsequent "State of the European Crypto Market" report revealed that MiCA-compliant EUR stablecoins (EURC, EURCV, and Banking Circle’s EURI) had captured an unprecedented 91% market share. This provides a critical insight: stablecoin supply and market share can shift rapidly when regulatory pressures compel exchanges to modify their behavior. However, this doesn't automatically translate into easier or cheaper trading for pairs like BTC-EUR and ETH-EUR.
A stablecoin can be plentiful and still fail to deliver improved execution if it resides on the wrong venues, circulates in thinly traded pools, or is primarily used as a settlement token that ultimately routes into a limited number of deep orderbooks.
Understanding Liquidity: Spreads and Depth
For traders, genuine liquidity improvement manifests in two key areas: tighter bid-ask spreads and deeper orderbooks. The bid-ask spread represents the difference between the best available buy and sell prices, essentially the cost incurred to execute a market order. Market depth, on the other hand, indicates the volume of assets that can be traded without causing significant price movements. Kaiko employs the '1% market depth' metric, a practical measure of how much trading volume exists within 1% of the mid-price on both sides of the orderbook.
Stablecoin infrastructure is most beneficial when it facilitates seamless funding and rebalancing of positions for market makers and large traders across different venues. This is particularly crucial when traditional fiat transfers are slow, unavailable during weekends, or burdened by banking inefficiencies. However, these 'rails' only matter if they connect to trading venues with sufficient depth to absorb substantial flow.
Europe's Concentrated Liquidity: The 'Venue Gap'
Kaiko’s Europe report offers compelling data regarding BTC-EUR’s growing role in global bitcoin-fiat trading. The share of BTC-EUR in global BTC-fiat trade volume surged from 3.6% to nearly 10% in 2024 – a substantial jump in a market traditionally dominated by USD pairs. Yet, this growth was not a widespread renaissance across all European venues.
Instead, euro trading proved to be highly concentrated. In November 2024, just four exchanges – Bitvavo, Kraken, Coinbase, and Binance – collectively accounted for over 85% of all euro-denominated trading volume. When excluding stablecoin-to-fiat pairs, Bitvavo alone commanded approximately 50% of the market share, with Kraken following closely. This high degree of concentration challenges the notion of broad-based liquidity improvement across the entire European market.
When liquidity is pulled into a small number of venues, those specific platforms can indeed experience compressed spreads and deeper orderbooks. This means that for a retail trader who happens to use one of these dominant exchanges, the perception of improved liquidity in Europe would be accurate. However, for a sophisticated trader, this concentration underscores the paramount importance of intelligent routing choices over generalized claims about regulatory benefits.
Kaiko’s spread data starkly illustrates this 'venue gap': 30-day average bid-ask spreads for top tokens ranged from over 20 basis points (bps) on some platforms to a mere 2.6 bps on Bitvavo and 3 bps on Kraken. Market depth tells a similar story. BTC-EUR ranked as the second-deepest BTC-fiat market in Kaiko’s sample, averaging a daily depth of 758 BTC – more than double that of BTC-GBP at 350 BTC. For those trading substantial volumes in a European timezone, such metrics determine the difference between smooth execution and orders being fragmented into dust.
The True Role of Euro Stablecoins
Did the rise of euro stablecoins directly 'cause' this improvement in execution quality? The honest assessment is that euro stablecoins act as a necessary rail, rather than a standalone catalyst. Firstly, as discussed, much of their early growth was a compliance-driven reshuffle, not organic demand. Kaiko explicitly frames the post-MiCA market share shift as being influenced more by delistings and venue policy changes than by new waves of trading activity.
Secondly, the improvements in the euro market’s execution quality appear to be a 'venue story'. The best spreads in Kaiko’s dataset are found on Bitvavo and Kraken, with significantly wider spreads elsewhere. This pattern is precisely what one would expect when liquidity converges into a few key orderbooks that attract serious market maker participation, benefit from predictable routing, and generate sufficient trading flow to keep participants engaged.
Thirdly, stablecoin-euro activity is uneven across exchanges. While stablecoin-to-euro pairs accounted for roughly half of Kraken’s euro volume and about 30% on Coinbase, they only represented about 4% on Binance and 2% on Bitvavo in Kaiko’s report. This implies that the exchanges offering the tightest euro spreads are not necessarily the ones where euro stablecoin trading is most dominant. The stablecoin rail can be thriving on one platform, while the best BTC-EUR execution is found elsewhere.
This doesn’t render stablecoins irrelevant. Instead, it clarifies their essential function: they reduce friction in funding and rebalancing, especially across international borders and outside traditional banking hours. They also provide exchanges with compliant euro-adjacent products to list, particularly as supporting certain legacy stablecoins becomes more challenging within the EU regulatory environment. However, if one is looking for a direct causal link between "EURC market cap up" and "ETH-EUR slippage down," the more accurate lens is market microstructure: understanding where liquidity truly concentrates, how order routing operates, and which venues consistently attract both trading flow and market makers.
Looking Ahead: The Archipelago Market
The 'bridge' story, involving institutional products like Crypto ETPs, continues to evolve. Europe already had a robust ETP ecosystem before MiCA, which has continued to expand, exemplified by BlackRock’s iShares Bitcoin ETP launch last year. Weekly fund flow snapshots from CoinShares offer public insights into institutional allocation trends and their geographical distribution.
Ultimately, MiCA’s first year successfully delivered what regulation excels at: clearer categories, streamlined offerings, and a compliant euro stablecoin lineup that both issuers and venues can scale with confidence. The "doubled market cap" reported by DECTA is undeniably real. The sentiment that "the euro got tradable again" is also valid, but it reflects less of a continent-wide upgrade and more of a concentration of liquidity into a select few venues offering genuinely tight spreads and significant depth.
For traders, the practical takeaway is clear: euro stablecoins provide the essential rails, but the actual cost of your 'ticket' (execution price) is determined by the specific orderbooks you access. MiCA has enhanced the credibility of these rails. The orderbooks improved where liquidity became concentrated. Europe's real challenge in its second year under MiCA will be whether this enhanced quality can spread beyond these winning platforms, or if the euro's crypto market will continue to function like an archipelago, where a few islands are comfortable for trading while the rest remain prohibitively expensive to visit.
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