Key facts:
- EURT is the dominant euro stablecoin.
- The capitalization of euro-pegged stablecoins reached a level not seen for a year.
The market capitalization of stablecoins that maintain price parity with the euro grew by 3.37% in July, reaching more than USD 336 million. In this way, it registers its second consecutive month of increase and its maximum level in a year, since July 2022, according to data compiled by the analytical company CCData.
As Market Times has reported, this scenario occurs after the entry into force of the Regulation for the Cryptoactive Market (MiCA) in the European Union in June and the publication this month of its first regulations. This initiative defines the regulations that service providers with crypto assets in the region must comply with.
CCData shows that, of the euro-pegged stablecoins, Euro Tether (EURT) remains the one with the largest market capitalization with a total of $160 million. It is then followed by Euro Coin (EUROC) and Stasis Euro (EURS) with a market capitalization of $47.25 million and $43.9 million respectively.
The data firm maintains that the euro-pegged stablecoin’s capitalization surge comes as its transactions on centralized exchanges fell 54.4% to $55 million in June. This suggests that the utility of these tokens “is more prominent” in decentralized finance (DeFi) applications, he noted.
As the chart shows, over the past year, the highest monthly trading volume for these coins on centralized exchanges was in March, at over $200 million. After that, the monthly figure has been less than half and in the last full month, June, it has shown a decrease to USD 50 million.
This picture is similar to the total stablecoin market, which also had its highest trading volume in the last year in March. Unlike those linked to the euro, however, in June they saw a 16.6% increase to USD 482 billion, which represented their first growth since March. Total stablecoin trading volume rose in June after two months of decline. Source: CC Data.
This growth occurred after several investment firms, including BlackRock and Fidelity, filed applications to launch spot bitcoin ETFs. CCData highlighted that this “increased optimism and commercial activity in the market”.
Meanwhile, total stablecoin market capitalization fell 0.82% to $127 billion, the lowest level since August 2021. This is its 16th consecutive month of decline, despite not only the euro-pegged capitalization but also the major stablecoin Tether (USDT) rising.
USDT reached a new all-time high market capitalization in July of $83 billion in July. Given this, it remains the largest stablecoin in the market.
Those anchored to the euro represent 0.36% of the total stablecoins
This scenario occurs while both USDT and USD Coin (USDC), the second largest-cap stablecoin that is also pegged to the dollar, have been trading at a discount on the United States Binance exchange. Its prices have fallen on the platform to USD 0.73 and USD 0.82 in July when they should remain at USD 1.
This disassociation could be attributed to the closure of fiat operations on the exchange after the lawsuit. early last month, CCData said. This suspension “has caused a drastic decrease in liquidity” of USDT and USDC, resulting in a depreciation of 27% and 18% respectively.
According to CCData, in the face of lower liquidity, monthly trading volume on the exchange fell to $2 billion, its lowest since November 2020. As reported by the Market Times, this has led to a discount in other assets as well, including bitcoin, which was trading at USD 5,000 below the global reference price.
With this in mind, CCData believes that “Euro stablecoins could be configured to capitalize on increased regulatory scrutiny in the United States.” He suggested that they could attract market capitalization of dollar-pegged stablecoins.
For now, he noted that while euro-pegged stablecoins are small in size compared to dollar-pegged ones, they represent the second-largest sector of this market.
According to explorer CoinGecko, now the market capitalization of these euro-pegged coins accounts for 0.36% of the total stablecoin market of $127 billion. Meanwhile, USDT and USDC continue to lead this market, dominating 65% and 20% of the total respectively.
