Euro Stablecoins: A Sleeping Giant?

The Current Landscape

Euro stablecoins might seem small now, but they have huge potential.

• Market Share: Most stablecoins are tied to the US dollar, making up over 99% of the market.
• Euro Stablecoins: Barely a blip at around $600 million.

But don't let the small numbers fool you. The euro is the world's second-largest currency, and Europe's economy is massive.

• Eurosystem's T2 Platform: Processed around €2.2 trillion per day in 2023.

The Rise of Stablecoins

Stablecoins are already a big deal.

• 2024: Processed roughly $28 trillion, more than Visa and Mastercard combined.
• Problem for Europe: Most of this activity is happening in dollars, not euros.

But that doesn't mean euro stablecoins are unnecessary. It just means Europe needs to catch up and connect its currency to this growing infrastructure.

The Shift to Tokenized Finance

The world is moving towards tokenized finance, and stablecoins are at the heart of this shift.

• Traditional Payment Systems: Slow, with cut-off times and reconciliation cycles that can take days.
• Stablecoins: Assets and payments settle directly on-chain, much faster and more efficient.

Predictions

• Standard Chartered: Tokenized real-world assets could reach $30 trillion by 2034.
• Citigroup: Tokenized digital securities could hit $5 trillion by 2030.

None of this can happen without on-chain fiat, and the euro is too important to be left out.

The Challenge

So, why aren't euro stablecoins bigger?

• Dollar Stablecoins: Had a decade head start.

But Europe is catching up.

• Next Big Expansion: Isn't going to be another USD token. It's going to be a credible, scalable euro stablecoin that's built for the size of Europe's economy.

The Real Question

For policymakers and investors, the real question isn't whether euro stablecoins will win out. It's about finding the right mix of on-chain euro options that balance innovation and financial stability.