Stablecoin adoption is growing rapidly across Europe, and now continues in the US. But it hasn’t experienced the type of adoption it was looking for. Today, people across the region are opting for stub coins that are primarily supported by USD, rather than euro-supported.
As a result, the current dominant stubcoins pose a risk to European monetary sovereignty. In an interview with Beincrypto, Allunity CEO, Germany’s first euro-backed stubcoin issuer, Alexander Hoeptner, explained that the silly and ridiculous increase in demand for the euros will help avoid a decline in the euro’s role in digital finance.
European stablecoin paradox
The use of Stablecoin is rapidly recovering across the European Union, but it is not the most advantageous type of adoption for the region.
According to recent data from Crypto Rank, North American Stablecoin transactions jumped nearly 42% between 2024 and 2025. The EU’s share was 34%, representing a major leap from 16% a year ago.
Despite this increase, 99.8% of Stablecoin’s total supply remains USD-based. The specific spread of USD-backed stubcoins is worrying for European leaders, especially at a time when countries with the strongest Fiat currency are trying to maintain it like that.
The role of mica in changing European stubcoin preferences
The US dollar’s domination in the global economy has become a default asset for users around the world, intensifying competition from other currencies such as the euro, pound and yen.
Before the market was introduced into the crypto assets (MICA) regulatory framework last December, European users had little incentive to adopt euro-collateralized stubcoin. The widespread use of USD-supported stubcoins driven by the established role of the dollar provided user stability and liquidity.
Using them in this situation means relying on the US regulatory system that puts the Euro’s international status at risk and makes them more vulnerable to American policy decisions.
“The current US administration poses the risk of uncertainty in the stability of the US financial system and the regulatory framework of the digital economy.
However, with MICA currently in place, there is a more clear motive for European users to switch to euro-collateralized stubcoin. The region will create a more structured and regulated alternative to USD-backed assets.
What are the Euro-backed stablecoins promises?
Euro-backed Stablecoins offers an important alternative for European users to trade digitally without defaulting to USD by default.
It also provides important services by acting as a bridge currency for cross-border trade. Companies and individuals can reduce exposure to foreign currency risk while conducting more streamlined international transactions.
“This does not expose European users to regulatory uncertainty and does not ensure within Europe’s digital identity needed to use the coin,” added Hoeptner.
Even if MICA brings more consistent rules, the European Union still struggles to establish a single approach to managing currency, as there is one central financial institution that oversees everything.
“The biggest challenge is that although there is a unified regulatory framework with Michal, they basically don’t have a unified European monetary policy comparable to the US when it comes to promoting widespread adoption of stubcoin,” Hoeptner said.
However, as we often see, the growing adoption of Crypto is also included in traditional financial institutions that feel threatened by such changes.
Traditional players: Resist or seize opportunities?
Established financial institutions are usually cautious about adopting new technologies and systems. Especially when you have spent decades developing and refinement of traditional financial infrastructure.
The euro-backed integration of stubcoin introduces legacy banking practices and a transition from the familiar Fiat system these institutions are accustomed to. Lack of understanding or fear of loss of control can encourage financial institutions to resist this change.
According to Hoeptner, the biggest risk that an institution can operate is to do nothing.
“The fear of adopting an older facility is the biggest risk that can inherently do great harm when, instead of addressing the risks of digitalization, rejection leads to ultimate reliance on non-European solutions,” he said.
Euro-backed stubcoins were actually able to complement the digital euro, the government-supported digital version of the EU’s domestic currency.
The official digital euro guarantees security, stability and regulatory oversight, while private stubcoin offers more powerful flexibility, programmership and access to innovative features such as smart contracts and distributed finance.
In this scenario, these two forms of digital currency are not direct competitors, but rather play a complementary role in the European digital economy. Together, we can offer a wide range of options for our users and businesses.
Reduce trust and increase influence
While USD-backed stubcoins currently dominate Europe, the implementation of MICA regulations will open the door for euro-collateralized stubcoins to become more prominent. As adoptions increase, these stubcoins may reduce European reliance on the US dollar and serve as a bridge currency.
Moving forward, integration of euro-backed stubcoins along with the digital euro will strengthen European financial sovereignty, increase competitiveness and reduce dependence on foreign currency.
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