European Stablecoin Market Declines Under New MiCA Rules

According to the most recent stablecoin report from CCData, the market capitalization of European stablecoins experienced a decline in June due to the implementation of the Markets in Crypto-Assets (MiCA) regulation

The trading momentum of stablecoins has weakened in response to the broader crypto market downturn.

The market capitalization of stablecoins in Europe decreased by 2.51%, reaching a seven-month low of $307 million, the lowest since November 2023. Tether’s EURT stablecoin’s market cap declined by 26% during this period, primarily due to delistings from prominent exchanges such as Bitstamp.

CCData observed that the implementation of MiCA sparked interest in stablecoins that adhere to local regulations. MiCA, the EU’s comprehensive crypto regulation bundle, was recently implemented. It enables businesses licensed by a single member state to conduct business across the entire EU.

Nevertheless, stablecoin issuers such as Tether have criticized the regulations for their stringent requirements, including restrictions on specific stablecoins’ trading volumes.

Numerous issuers and their stablecoins, such as Circle’s USDC and EURC, Societe Generale’s EURCV, Monerium’s EURe, Membrane’s EUROe, and Quantoz’s EURD, are acknowledged by the law, despite these obstacles.

The volume of stablecoins has decreased.

The global stablecoin market cap increased by 0.53% to $161 billion in June, signifying the highest stablecoin market cap since April 2022 and the ninth consecutive month of growth.

According to CCData:

“Stablecoin market dominance is currently at 6.83%, rising from 6.22% in May. The increase in the stablecoin dominance highlights the negative price action of digital assets, with Bitcoin and Ethereum retracing the gains made following the surprise approval of spot Ethereum ETFs in the US.”

Despite the expansion, the momentum of stablecoin trading has stalled due to a decline in the digital asset market.

In June, stablecoin trading volume on centralized exchanges decreased by 18% to a seven-month low of $907 billion. Similarly, the on-chain transfer volume experienced a 7.5% decline for the second consecutive month, reaching $1.8 trillion, the lowest level since February 2024. This decline is consistent with the persistent pessimistic market sentiments.

The report also emphasized that USDC had the highest on-chain transfer volume in June, surpassing USDT and DAI.

According to CCData:

“Among the top five stablecoins on Ethereum, USDC leads with $786 billion in on-chain transfer volume, representing 43.6% of the market share. USDT and DAI follow with transfer volumes of $616 billion and $334 billion, accounting for 34.2% and 18.5% of the volumes.”