Regulation

Euro-Pedged Stablecoin Volumes Rise as New Regulations Pose Potential Boon for Sector: Kaiko

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According to digital asset analytics firm Kaiko, the use of euro-pegged stablecoins is increasing amid new European crypto regulations that are gradually coming into force over time.

In a new report, Kaiko said that the European crypto market is facing big changes due to regulations affecting stablecoins in the 2023 Crypto Asset Markets (MiCA). law go in effect later this month.

Said Kaiko,

“Impending regulation in Europe is poised to shake up the stablecoin market. Binance last week revealed plans to restrict stablecoins that do not meet the block’s standards on the Crypto Asset Markets (MiCA). Elsewhere, reports suggest that Kraken has been actively reviewing which stablecoins meet European Union standards, which could lead to non-compliant stablecoins being delisted for their EU users.

Kaiko suggests that new crypto regulations could be a “boon” for Euro-backed and MiCA-compliant stablecoins as their usage suddenly increases in Europe.

“While Europe has traditionally lagged behind the US and APAC in cryptocurrency trading, Euro-backed stablecoins have consistently increased in volume since the start of the year, which suggests that 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 euro-backed stablecoins. It should be noted, however, that this share fell from almost zero in 2020 and is currently at an all-time high.

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