Stablecoin is not synonymous with a digital U.S. dollar, despite the dominance of USD-backed assets in a rapidly expanding market.
A stablecoin’s value can be pegged to range of assets—from commodities like gold to other cryptocurrencies—but these variants are often used more as investment vehicles than as everyday payment mechanisms. Likewise, many leading USD-backed stablecoins function as yield-generating instruments or as tools for large-value settlements.
That said, there is growing evidence that the stablecoins gaining the most traction in real-world use cases are those backed by fiat currencies other than the U.S. dollar. 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 telling is that roughly half of these domestic currency-denominated stablecoins are held in institutional and individual wallets, while about a quarter sits on centralized exchanges. This distribution suggests active usage, likely in applications such as cross-border payments, remittances, and B2B settlement.
Stablecoin vs. CBDC
Within this segment, Circle’s EURC accounts for over 90% of transfer volume. That a euro-pegged stablecoin leads is unsurprising: the euro is used across 27 countries, and inefficiencies in cross-border payments have long been a lingering pain point that European policymakers are working to address.
However, these leaders have shown a preference for a central bank digital currency over privately issued stablecoins. After years of discussion, the digital euro is entering a pilot phase and is slated to launch in the latter part of next year.
One of the key motivations behind the CBDC push is the dominance of USD-backed stablecoins. Still, it remains unclear how a digital euro would coexist with euro-denominated stablecoins already in circulation.
Tough Sledding
Outside Europe, adoption of non-USD stablecoins has been more limited. Brazilian real-backed stablecoins represent the next-largest share of the segment, but they trail far behind euro-based counterparts.
Even so, new entrants continue to emerge, such as South Africa’s ZAR Universal (ZARU), a rand-pegged digital asset. These products, however, face the daunting task of unseating USD-backed stablecoins, which still account for the lion’s share of a global market valued at more than $310 billion.
