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European stablecoin market declines under newly imposed MiCA rules

European stablecoin market declines under newly imposed MiCA rules
© Copyright Image: CryptoSlate

The market capitalization of European stablecoins declined in June due to the implementation of the Markets in Crypto-Assets (MiCA) regulation, according to CCDatas latest stablecoin report.

The market cap of Euro-based stablecoins fell by 2.51%, hitting a seven-month low of $307 million, the lowest since November 2023. During this period, Tethers EURT stablecoins market cap dropped by 26%, mainly due to delistings from major exchanges like Bitstamp.

CCData noted that MiCAs implementation spurred interest in stablecoins that comply with local laws. MiCA, the EUs comprehensive crypto regulation package, was recently enacted. It allows firms licensed by one member state to operate throughout the EU.

However, stablecoin issuers like Tether have criticized the rules for their stringent requirements, such as limits on trading volumes for certain stablecoins.

Despite these challenges, several issuers and their stablecoins, including Circles USDC and EURC, Societe Generales EURCV, Moneriums EURe, Membranes EUROe, and Quantozs EURD, are recognized under the law.

Stablecoins volume fall

In June, the global stablecoin market cap rose by 0.53% to $161 billion, marking a nine-month growth streak and the highest stablecoin market cap since April 2022.

CCData said:

Stablecoin market dominance is currently at 6.83%, rising from 6.22% in May. The increase in the stablecoin dominance highlights the negative price action of digital assets, with Bitcoin and Ethereum retracing the gains made following the surprise approval of spot Ethereum ETFs in the US.

Despite the growth, stablecoin trading momentum has slowed amid a downturn in the digital asset market.

Stablecoin trading volume on centralized exchanges fell by 18% to a seven-month low of $907 billion in June. Similarly, on-chain transfer volume decreased for the second consecutive month by 7.5% to $1.8 trillion, the lowest since February 2024. This decline aligns with ongoing bearish market sentiments.

The report also highlighted that USDC had the highest on-chain transfer volume in June, surpassing USDT and DAI.

CCData stated:

Among the top five stablecoins on Ethereum, USDC leads with $786 billion in on-chain transfer volume, representing 43.6% of the market share. USDT and DAI follow with transfer volumes of $616 billion and $334 billion, accounting for 34.2% and 18.5% of the volumes.

The post European stablecoin market declines under newly imposed MiCA rules appeared first on CryptoSlate.

Read more: https://cryptoslate.com/european-stablecoin-market-declines-under-newly-imposed-mica-rules/

Text source: CryptoSlate

Disclaimer: Financial information and news are not financial advice, read the disclaimer.
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