U.S. dollars back nearly every stablecoin on the market, but there are signs that non-USD tokens are gaining traction.
In a notable development in this trend, UK-based fintech Revolut plans to debut its first euro-backed stablecoin, EURR, in Denmark, Poland, and Portugal. This is expected to be just the first phase in the firm’s broader European expansion for the stablecoin. Down the road, Revolut also plans to offer stablecoins pegged to other fiat currencies.
The EURR launch is facilitated by a subsidiary of Bridge, the stablecoin infrastructure firm that has significantly expanded its footprint since its landmark acquisition by Stripe.
The stablecoin will be fully integrated into Revolut’s retail app, and the platform is designed to give users the capability to seamlessly shift between euros and crypto. EURR will also be supported across multiple blockchains and crypto wallets.
Moving Beyond the Dollar
Despite euro-pegged stablecoins’ fractional market share, there is mounting demand for these solutions. According to a report by Visa and Dune, the non-USD stablecoin market reached $1.1 billion in February, tripling in just over three years.
More importantly, roughly half of these stablecoins were held in institutional and individual wallets, while about a quarter were held on centralized exchanges. This suggests that these non-USD tokens are being spent and not just held as savings or yield vehicles.
Drilling down further, Circle’s EURC accounted for over 90% of the non-USD transfer volume. The stablecoin recently topped €400 million in circulation, exemplifying the demand for euro-denominated digital assets.
A Non-USD Stablecoin Springboard
There are several factors behind the demand for euro stablecoins. The first is that the euro is used by more than 20 countries, and inefficiencies in cross-border payments have been a persistent pain point that European policymakers are still working to address.
Another factor is that the EU’s long-awaited central bank digital currency (CBDC), the digital euro, has been mired in red tape for years. By contrast, a euro-backed stablecoin is readily available and presents a compelling alternative to USD-backed stablecoins at a time when payments sovereignty has been top of mind for EU leaders.
However, one challenge to any digital assets venture in the EU has been the passage of the Markets in Crypto-Assets (MiCA) legislation. These rules have been praised as a much-needed framework for cryptocurrencies and stablecoins, but the recent compliance deadline also excluded many leading digital assets firms from operating in Europe.
For its part, Revolut stated that EURR was fully compliant with MiCA. Given the popularity of the platform—and its rapid global expansion—Revolut’s stablecoin could provide a compelling alternative for EU customers and a springboard for non-USD tokens.
