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<p>Europe thought it was laying the foundations for a safer crypto market. It may have actually hindered its own digital currency. Behind MiCA, presented as an exemplary framework, a reality sets in: euro stablecoins remain marginal compared to the dollar’s hegemony. A recent report reveals this imbalance and revives a strategic debate. Between investor protection and global competitiveness, the European Union faces a dilemma that could weigh heavily on its place in digital finance.</p>
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  <h2 class="in-brief--title" id="in-brief">In brief</h2>
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   <li>MiCA imposes itself as an ambitious regulatory framework, but now raises questions about its real effects.</li>
   <li>Despite their strict regulation, euro stablecoins remain a small minority in the global market.</li>
   <li>The imposed rules, notably on reserves and the absence of remuneration, directly affect their attractiveness.</li>
   <li>In contrast, dollar-backed stablecoins benefit from a more dynamic ecosystem, especially in DeFi.</li>
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<h2 id="euro-stablecoins-safe-but-marginalized">Euro stablecoins, safe but marginalized</h2>
<p>The report published by <em>“Blockchain for Europe”</em> draws a blunt conclusion: euro stablecoins compliant with MiCA remain ultra-secure but underperform in the market.</p>
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<p>According to cited data, they represent <em>“less than 1% of the global stablecoin volume”</em>, a figure out of sync with the euro’s weight in the global economy. The authors explain that the rules imposed by MiCA, especially for electronic money tokens, have created a strict framework that limits their attractiveness.</p>
<p>They highlight that the prohibition of remunerating holders places these assets <em>“in a particularly disadvantageous position”</em> in a positive interest rate environment, compared to bank deposits or stablecoins in foreign currencies.</p>
<p>In detail, several constraints <a href="https://cointelegraph.com/news/industry-group-mica-euro-stablecoins-too-small-to-compete" rel="noopener noreferrer nofollow">structure</a> this imbalance :</p>
<ul>
 <li>The obligation of full backing of stablecoins with reserves ;</li>
 <li>The prohibition of paying interest to holders ;</li>
 <li>A requirement to hold between 30 % and 60 % of reserves in the form of bank deposits ;</li>
 <li>The absence of competitive mechanisms compared to yield strategies observed elsewhere.</li>
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<p>The authors thus describe a mechanism close to a <em>“regulatory Laffer curve”</em>, where excessive constraints reduce activity instead of structuring it, contributing to the current weakness of euro stablecoins.</p>
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<h2 id="h-proposed-reforms-and-tensions-around-a-mica-2">Proposed reforms and tensions around a MiCA 2</h2>
<p>Faced with these limits and the on-chain data collected, the report calls for targeted adjustments rather than a full overhaul of the framework. The authors notably propose relaxing reserve management rules by adopting a more flexible approach aligned with European liquidity standards.</p>
<p>They also suggest, under strict conditions, opening access for major issuers to central bank accounts during periods of stress. These avenues fit into a broader debate on MiCA’s evolution, as some European officials are already discussing a <em>“MiCA 2”</em> version to support market maturity.</p>
<p>This movement is not unanimous. The European Banking Authority warns against weakening safeguards, believing that certain changes could increase regulatory arbitrage risks.</p>
<p>On its side, the European Central Bank points out that the growth of stablecoins could concentrate demand on certain short-term sovereign bonds, 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.</p>
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<p>The evolution of MiCA could thus become a decisive test for Europe’s strategy in digital finance. Between maintaining a protective framework and adapting to global dynamics, upcoming choices will determine the euro’s position in the stablecoin ecosystem, currently largely dominated by the dollar.</p>

Euro Stablecoins Remain Marginal In Global Market

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