Can Europe Catch the US in the Stablecoin Race?

US stablecoins dominate 99% of the global market. China is pushing ahead with the e-CNY. Europe, backed by MiCA and the first BaFin-regulated euro stablecoin EURAU, wants to close the gap. But can it move fast enough?

BeInCrypto spoke with Gracy Chen, CEO of Bitget, about Europe’s strengths, its regulatory challenges, and whether the EU can still play a leading role in digital finance.

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Europe vs. US: Two Competing Models

BeInCrypto: How do you assess Europe’s position against the US and Asia?

Gracy Chen: Europe is anchored in MiCA, which offers a unified legal framework but demands a high compliance burden. Issuers must maintain full reserves, hold significant capital, and obtain an EMI license. This protects users but raises entry barriers and slows growth.

By contrast, she said, the US GENIUS Act takes a lighter, innovation-first approach. It has allowed private issuers like Circle and Tether to scale rapidly, integrating USDC and USDT into Visa and Mastercard networks.

Asia, meanwhile, remains focused on CBDCs, with private stablecoins still playing a limited role.

Is MiCA Enough to Drive Innovation?

BeInCrypto: Does MiCA foster innovation, or does Europe need more flexibility?

Chen: MiCA is a strong foundation, but Europe needs three adjustments: faster authorization for CASPs and issuers, stronger support for multi-bank reserve models like EURAU, and harmonized implementation across all member states.

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Without these, Europe risks regulatory fragmentation and slower adoption.

EURAU and European Sovereignty

BeInCrypto: What does EURAU’s launch mean for Europe?

Chen: EURAU is a pivotal step. As Germany’s first BaFin-regulated euro-backed crypto asset, it provides a compliant alternative to USD stablecoins and strengthens Europe’s monetary sovereignty. Regulatory clarity, she added, is the trigger for institutional adoption and cross-border payment use cases.

What Europe Must Do to Stay Competitive

BeInCrypto: What are the most urgent steps for the EU?

Chen: Europe must shift from policy clarity to operational readiness. The priority is accelerating MiCA-compliant euro stablecoins with native SEPA Instant or TIPS integration, enabling fast, low-cost ramps. 

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Europe also needs Level-2 standards, EU-wide passporting, and explicit rules for yield-bearing products such as tokenized T-bills — an area where the EU can differentiate from the US.

Infrastructure matters too. Europe needs unified fiat ramps, merchant acceptance programs, interoperability rails, and a common supervisory playbook.

A dedicated stablecoin sandbox and developer toolkits could attract new issuers and close the innovation gap.

Building Trust: Compliance and Technology

BeInCrypto: What builds trust in European stablecoins?

Chen: Transparency and audited reserves. MiCA’s quarterly reporting requirements help prevent the opacity that led to TerraUSD’s collapse. 

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Mandatory AML/KYC integration and secure, audited smart contracts provide additional assurance for institutions and retail users.

Will Europe Become a Leading Stablecoin Player?

BeInCrypto: Can Europe compete in the next 3–5 years?

Chen: Europe can become a respectable player, but it is unlikely to overtake the US, which already controls almost the entire market through mature private-sector ecosystems. Europe’s advantage lies in its regulatory clarity — but it must accelerate innovation to turn that framework into real adoption.

Regulation Gives Europe a Head Start — Innovation Will Decide the Rest

Europe has what other regions lack: a complete, unified regulatory framework. But rules alone won’t close a 99% market gap.

As Gracy Chen warns, the EU must combine MiCA with speed, infrastructure, and incentives. Whether that is enough to challenge US dominance remains Europe’s defining test — and the answer will come quickly.