Euro Stablecoins Approach $500 Millioin Market Cap Amid Predictions of USD Rivalry by 2028

The market capitalization of euro-pegged stablecoins has surged by 44% in the first half of 2025, reaching approximately $480 million. This growth comes amid a strengthening euro and a shifting global financial landscape that some experts believe could see euro-based stablecoins challenge the dominance of their USD counterparts by 2028.

Euro Stablecoins Surge Amid Euro Strength

The cumulative market cap of euro-pegged stablecoins rose from $310 million to $480 million during the first half of the year.

Circle's EURC stablecoin led this growth with an impressive 138% increase, reaching a market cap of $200.36 million. Despite these gains, euro-pegged stablecoins still account for less than 1% of the $254.88 billion market cap of USD-pegged stablecoins.

The euro's performance has been a key factor in driving this demand. The EUR/USD exchange rate surged 12.88% in the first half of 2025, nearly matching Bitcoin's 14.8% rise during the same period. This marks the highest level for the euro against the dollar since September 2021, reflecting a broader shift away from the U.S. dollar.

Euro Stablecoins to Challenge USD by 2028

The global financial landscape is undergoing a significant transformation, with the U.S. dollar facing challenges from unpredictable trade policies and fiscal uncertainties. This has prompted central banks to diversify their reserve assets, increasingly turning to alternatives such as the euro, gold, and the Chinese CNY. This trend is also evident in the crypto space, where euro-pegged stablecoins are gaining momentum, reflecting the euro's growing strength.

Fiorenzo Manganiello, co-founder and managing partner of LIAN Group, predicts that euro-pegged stablecoins will gain significant traction over the next few years. "As the euro continues its upward trajectory, investments into and transactions via euro-based stablecoins are likely to rise," Manganiello stated. He added that by 2028, these coins could pose a serious challenge to USD-pegged stablecoins, especially if the U.S. dollar continues to face economic and geopolitical pressures.

The European Union has played a pivotal role in fostering the growth of euro-denominated stablecoins. The recently implemented Markets in Crypto-Assets (MiCA) framework offers regulatory clarity for crypto issuers, enabling them to secure licenses and operate within a structured and regulated environment. This has attracted major crypto platforms like OKX, Crypto.com, Bitvavo and Coinbase, signaling a broader shift in the market.

Moreover, the European Central Bank's vision for a "global euro moment," as articulated by Christine Lagarde, underscores the region's ambition to elevate the euro's role in the digital asset economy.

Euro's Influence on Crypto and the Rise of Euro Stablecoins

Interestingly, the euro's strength appears to resonate beyond traditional finance. The 90-day correlation coefficient between the EUR/USD exchange rate and Bitcoin has reached 0.62, the highest level since February 2024. This moderate positive correlation suggests that the euro's performance may be influencing cryptocurrency markets, further solidifying its position in the evolving financial ecosystem.

While USD-pegged stablecoins continue to dominate the market, the rapid rise of euro-pegged alternatives signals a shifting dynamic. Backed by robust regulatory frameworks and the euro's increasing appeal, euro-denominated stablecoins are poised to play a more prominent role in the global digital asset landscape.

As the financial ecosystem evolves, the coming years could see euro-pegged stablecoins emerge as strong contenders to their USD counterparts.