Despite significant growth in supply, non-dollar stablecoins continue to struggle for market dominance. According to stablecoin supply data from Artemis, the combined supply of euro, Canadian dollar, Japanese yen, Singapore dollar, and other non-USD stablecoins rose to approximately $771 million in April 2026 from $261 million in May 2021. However, their market share has actually declined to 0.24% from 0.26%, leaving dollar-pegged tokens with 99.76% of the stablecoin market. The dominance remains concentrated among major players, with El Salvador-based Tether and U.S.-based Circle controlling approximately $190 billion and $77 billion of their dollar-pegged tokens respectively, as reported by Reuters.
Despite regulatory challenges, stablecoins are finding increasing use in mainstream applications with significant growth in transaction volumes. According to recent data from Bruegel, stablecoin transaction volumes adjusted to exclude bot-driven transactions have grown at a compound annual rate of 133% since 2023, reaching approximately $28 trillion in 2025. Retail-scale transactions (below $250 and excluding bot activity and high-frequency trading) increased from around $0.5 billion in 2019 to $69.13 billion in 2025, indicating growing use in smaller-value, consumer and business payments. Identifiable stablecoin payment volumes including larger-value transactions reached approximately $390 billion in 2025, more than doubling from 2024 levels, while stablecoin-linked card spending is estimated to have grown to $4.5 billion in 2025, up 673% from 2024.
Despite the growth in non-dollar stablecoin supply, actual adoption remains limited. Societe Generale's crypto arm, SG-FORGE, launched a euro-pegged stablecoin in 2023 but has achieved minimal traction with just 105.6 million euros ($122.40 million) worth of tokens in circulation, as reported by Reuters. This represents a stark contrast to the dominance of dollar-pegged alternatives, highlighting the challenges European banks face in building meaningful demand for euro-denominated stablecoins. However, Europe does better when measured by transactions rather than supply, with Europe-based stablecoin transactions making up 38% of global transactions in the final quarter of 2025, as reported by Bruegel. The limited international reach of most fiat currencies, with only about eight currencies trading with meaningful liquidity in global FX markets, continues to constrain the working universe for globally viable stablecoins.
The dominance of dollar stablecoins poses significant risks to European financial sovereignty through what experts call infrastructure dollarization. As reported by Bruegel, if US dollar stablecoins become the default settlement asset for tokenized securities and cross-platform liquidity, digital infrastructures may gradually align around dollar-based conventions. Even euro-denominated securities could rely operationally on dollar collateral and dollar settlement within tokenized environments. This process would not threaten the euro as legal tender or unit of account, but would shift the operational center of gravity of liquidity coordination toward dollar-based instruments. The EU faces the risk of being left without a competitive distributed ledger technology payment infrastructure anchored in EU public money during the critical period when global norms are established for tokenized payments. European policymakers may unintentionally achieve the opposite of their intended goal by discouraging stablecoin development, potentially pushing demand to the US and exposing EU holders to dollar currency risk.
To address these challenges, experts recommend several policy measures to support euro-denominated stablecoins while preserving monetary sovereignty. According to Bruegel, key recommendations include accelerating the European Central Bank's Appia project to establish interoperability between digital ledger technology platforms and ECB payments infrastructure, removing MiCA requirements to hold large shares of stablecoin reserves in bank deposits, and allowing EU stablecoin issuers to remunerate stablecoin holders directly as long as the remuneration rate is below ECB reserve rates. The report suggests giving EU-regulated stablecoin issuers access to the ECB's balance sheet, including lending-in-last-resort facilities, and allowing MiCA-compliant euro stablecoins to be fully usable on EU-regulated trading platforms without operational disadvantages relative to foreign-currency instruments. These measures would ensure that the architecture within which stablecoins develop preserves monetary sovereignty while supporting the growth of compliant euro stablecoins without lowering prudential standards.
