The acceptance of stablecoin is rapidly developing across Europe, currently following closely behind the United States. However, it is not achieving the type of acceptance it desires. Currently, people in the region mainly choose stablecoins backed by USD rather than those backed by euros.
Therefore, the current stablecoin is dominating and poses risks to Europe's monetary sovereignty. In an interview with BeInCrypto, Alexander Hoeptner, CEO of AllUnity — the first euro-backed stablecoin issuer in Germany — explains that increasing demand for euro-backed stablecoins could help prevent the decline of euro's role in digital finance.
Europe's Stablecoin Paradox
Stablecoin usage is rapidly increasing across the European Union, but it is not the most beneficial form of acceptance for this region.
According to recent data from Crypto Rank, stablecoin transactions in North America have increased nearly 42% from 2024 to 2025. Although the EU's rate stands at 34%, it is a significant leap from 16% just a year earlier.
Despite this increase, 99.8% of the total stablecoin supply still relies on USD. The particular development of USD-backed stablecoins is causing concern for European leaders, especially during a time when countries with the strongest fiat currencies are seeking to maintain their position.
MiCA's Role in Changing Stablecoin Preferences in Europe
The dominance of the US dollar in the global economy has made it the default asset for users worldwide, creating increasing competition with other currencies like the euro, British pound, and Japanese yen.
Before the Markets in Crypto-Assets (MiCA) regulatory framework was introduced last December, European users had little motivation to accept euro-backed stablecoins. The widespread use of USD-backed stablecoins, driven by the established role of the dollar, provides users with stability and liquidation.
Using them in this situation also means relying on the US legal system, which weakens the international position of the euro and makes it more vulnerable to US policies.
"The current US government poses uncertain risks to the stability of the US monetary system and the legal framework of the digital economy despite the GENIUS Act being passed... widespread use could form a negative dependency that could be exploited against the EU's interests," Hoeptner told BeInCrypto.
However, with MiCA now in effect, there is a clearer motivation for European users to switch to euro-backed stablecoins as the region creates a more structured and better-regulated alternative to USD-backed assets.
What is the Promise of Euro-Backed Stablecoins?
Euro-backed stablecoins provide a crucial alternative for European users to conduct digital transactions without defaulting to USD.
They also provide an essential service by acting as a bridge currency for cross-border trade. Businesses and individuals can perform smoother international transactions while minimizing foreign currency-related risks.
"This will not force European users to face regulatory uncertainty and also ensure digital identity in Europe, which is essential for coin usage," Hoeptner added.
Even with MiCA providing more consistent rules, the European Union still struggles to establish a unified approach to managing its currency, as no central financial authority oversees everything.
"The biggest challenge is that although we have a unified legal framework with MiCAR, we do not really have a unified European monetary policy comparable to the US when it comes to promoting widespread stablecoin acceptance," Hoeptner said.
However, as seen in many cases, increasing cryptocurrency acceptance also comes with traditional financial institutions feeling threatened by this change.
Traditional Players: Resisting Change or Seizing Opportunities?
Long-established financial institutions are typically cautious about accepting new technologies or systems, especially after spending decades developing and perfecting traditional financial infrastructure.
Integrating euro-backed stablecoins introduces a change from traditional banking practices and familiar fiat systems these institutions are accustomed to. Lack of understanding or fear of losing control might cause financial institutions to resist this change.
According to Hoeptner, the greatest risk these institutions might face is doing nothing.
"The fear of acceptance by old institutions is the biggest risk that could cause significant harm, as instead of addressing digitalization risks, rejection could lead to ultimate dependence on a non-European solution," he said.
Euro-backed stablecoins could actually complement the digital euro, the government-supported digital version of the EU national currency.
The official digital euro will ensure security, stability, and regulatory oversight, while private stablecoins will provide greater flexibility, programmability, and access to innovative features like smart contracts and decentralized finance.
In this scenario, these two digital currency forms would not be direct competitors but instead play complementary roles in Europe's digital economy. Together, they can provide a broader range of options for users and businesses.
Reducing Dependence and Enhancing Influence
Although USD-backed stablecoins currently dominate in Europe, the implementation of the MiCA regulation opens up opportunities for euro-backed stablecoins to become more prominent. As acceptance increases, these stablecoins could reduce Europe's dependence on the US dollar and serve as a bridging currency.
In the future, integrating euro-backed stablecoins with the digital euro could strengthen Europe's financial sovereignty, enhance competitiveness, and reduce dependence on external currencies.
