Circle's stablecoin now accounts for 56% of euro-paired stablecoin trading, up from 10% in January 2024, according to Kaiko. On Oct. 30, Coinbase converts remaining balances of USDT and other non-compliant stablecoins held by European customers into USDC.
Europe's stablecoin rules have changed which dollar token Europeans trade.
Circle's USDC now accounts for 56% of stablecoin trading against the euro, up from 10% in January 2024, according to research firm Kaiko, and its euro order books are about 40% deeper than those of Tether's USDT. The shift followed restrictions on USDT by European exchanges under the European Union's Markets in Crypto-Assets rules, known as MiCA.
The figures cover euro-paired trading only, not the stablecoin market as a whole.
Friday's deadline
The shift has a date attached. Coinbase has told customers in the European Economic Area that they have until Oct. 30 to withdraw balances in stablecoins it considers non-compliant with MiCA, including USDT, PYUSD, USD1, DAI and USDS. After that, it will convert remaining balances into USDC, where suitable, at market rates.
Europe's securities regulator has told national supervisors to have firms resolve their exposure to non-compliant stablecoins by Jan. 8, 2027, and national regulators can set earlier deadlines.
The size of the conversion is unknown, but it should add USDC demand in Europe mechanically on Friday.
Why it matters for Circle
Circle shares rose 0.7% to $80.42 at about 1:51 p.m. Eastern, after falling about 7% on Monday. The European data is a counterpoint to recent bearish calls on Circle: in the one major market where regulation has drawn a clear line, the compliant issuer has taken the lead. Kaiko noted that the U.S. GENIUS Act could produce a similar shift.
Two readings
One reading is that compliance is becoming a durable advantage. Euro-paired trading moved from Tether to Circle in under three years, Coinbase is about to convert balances by default, and regulation in the U.S. may push in the same direction.
The other is that the win is narrower than it looks. Euro-paired stablecoin trading is a small slice of global activity, Tether still dominates worldwide, and the longer-term beneficiaries of MiCA may be euro-denominated stablecoins rather than dollar tokens.
What to watch
Coinbase's conversion on Oct. 30, any response from Tether, euro-stablecoin trading share in the coming months, the Jan. 8 regulatory deadline, and Circle's third-quarter results on Nov. 4.