Europe thought it was laying the foundations for a safer crypto market. Above all, it could have slowed down its own digital currency. Behind MiCA, presented as an exemplary framework, a reality emerges: euro stablecoins remain marginal in the face of the hegemony of the dollar. A recent report reveals this imbalance and rekindles a strategic debate. Between investor protection and global competitiveness, the European Union finds itself facing a dilemma which could have a lasting impact on its place in digital finance.
In brief
- MiCA stands out as an ambitious regulatory framework, but now raises questions about its real effects.
- Despite their strict supervision, euro stablecoins remain largely in the minority on the global market.
- The rules imposed, particularly on reserves and the absence of remuneration, have a direct impact on their attractiveness.
- Against them, dollar-backed stablecoins benefit from a more dynamic ecosystem, particularly in DeFi.
Euro stablecoins, safe but marginalized
The report published by “Blockchain for Europe” makes a blunt observation: MiCA-compliant euro stablecoins remain ultra-secure, but underperform on the market.
According to the data cited, they represent “less than 1% of the global stablecoin volume”a figure out of step with the weight of the euro in the global economy. The authors explain that the rules imposed by MiCA, particularly for electronic money tokens, have created a strict framework which limits their attractiveness.
They emphasize that the ban on remunerating holders places these assets “in a particularly unfavorable position” in a positive rate environment, facing bank deposits or stablecoins in foreign currencies.
In detail, several constraints structure this imbalance:
- The obligation for stablecoins to be fully backed by reserves;
- The ban on paying interest to holders;
- A requirement to hold between 30% and 60% of reserves in the form of bank deposits;
- The absence of competitive mechanisms in the face of performance strategies observed elsewhere.
The authors thus describe a mechanism close to a “regulatory Laffer curve”where an excess of constraints reduces activity instead of structuring it, contributing to the current weakness of euro stablecoins.
Reforms envisaged and tensions around a MiCA 2
Faced with these limitations and the on-chain data collected, the report calls for targeted adjustments rather than a complete overhaul of the framework. The authors propose in particular to relax the rules for managing reserves by adopting a more flexible approach, aligned with European liquidity standards.
They also suggest opening, under strict conditions, access for major issuers to central bank accounts in times of stress. These avenues are part of a broader debate on the evolution of MiCA, while certain European officials are already discussing a version “MiCA 2” to support market maturity.
This movement is not unanimous. The European Banking Authority warns against a weakening of safeguards, saying that certain changes could increase the risks of regulatory arbitrage.
For its part, the European Central Bank emphasizes that the rise of stablecoins could concentrate demand on certain sovereign bonds in the short term, with potential effects on yields and liquidity during redemption phases. These concerns illustrate the complexity of the debate, where financial innovation and systemic stability intersect.
The evolution of MiCA could thus become a decisive test for European strategy in digital finance. Between maintaining a protective framework and adapting to global dynamics, the choices to come will determine the place of the euro in the stablecoin ecosystem, today largely dominated by the dollar.
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