Circle Executive Predicts Takeoff of Euro Stablecoin Market due to Real-World Applications and Regulatory Clarity

According to Patrick Hansen, the European Union strategy and policy director at Circle, the future looks promising for stablecoins denominated in euros. While the United States dollar may currently maintain its first-mover advantage, Hansen believes that euro stablecoins will gain traction and surpass their current modest market share. Speaking at EthCC in Paris, he highlighted the emergence of real-world use cases as a driving force behind this trend.

At present, euro-denominated tokens make up only 0.3% of the stablecoin market, amounting to $300 million. In contrast, the euro holds a significant 20% share in the traditional monetary system. Despite ranking second to the U.S. dollar in both categories, the euro stablecoin market is expected to grow steadily. Hansen explained that the stablecoin market originated with the dollar, and as the saying goes, “liquidity begets liquidity.” The relatively lower liquidity in euro stablecoins currently exposes users to higher risks and usage costs.

However, the crypto capital markets are transitioning from speculative ventures to practical utility, according to Hansen. The increasing adoption of stablecoins for remittances, business-to-business transactions, and other use cases supports this shift. Users are increasingly interested in utilizing stablecoins denominated in their local currency for such purposes. Furthermore, integrating euro stablecoins into existing European payment systems will further drive their adoption.

Hansen also emphasized that decentralized finance (DeFi) will follow a similar trajectory, offering real-world applications such as car loans denominated in local currency. As a result, regionalized liquidity pools are expected to emerge, boosting the viability of euro stablecoins.

Regulatory clarity in the European Union will be facilitated by the passage of the Markets in Crypto-Assets regulations. Hansen went as far as suggesting that these regulations may provide regulatory incentives, further supporting the growth of the euro-denominated stablecoin market. Currently, this market is dominated by five tokens, including Circle’s Euro Coin (EUROC). Circle has sought a license in France to ensure that EUROC complies fully with e-money token regulations, as stated by Hansen in June 2022.

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