USDC Overtakes USDT in Euro Trading as MiCA Supervision Nears

October 28, 2026 MM Crypto Team

A quiet but significant shift has taken place in Europe’s stablecoin market. USDC has overtaken USDT in euro stablecoin trading, according to Kaiko data, reversing a hierarchy that has held for years. USDT remains the larger stablecoin globally, with a circulating supply about two and a half times that of USDC, but in the euro market the balance has now tipped the other way. The change is not the result of a marketing campaign or a sudden change in trading habits. It is the result of regulation, and of the way that regulation has reshaped which stablecoins European traders and platforms are willing and able to use.

The timing matters. USDC was recognised as the European Union’s first significant e-money token under MiCA on October 14, a designation that brings direct European Banking Authority oversight of its reserves and liquidity, and that oversight begins on November 12. The European Securities and Markets Authority is pushing to end custody and transfer services for non-compliant stablecoins, squeezing USDT further. Euro-backed stablecoins hold under eight percent of total euro trading volume, so the euro stablecoin market itself remains small even as its hierarchy flips. And the United States is heading the same way under the GENIUS Act, with the Office of the Comptroller of the Currency issuing its first final rule under the law on October 21, with reserve and redemption requirements effective January 18, 2027, and restrictions on United States platforms offering non-approved stablecoins from July 2028. Taken together, these developments point to a new era in which compliance is not just a legal obligation but a competitive advantage.

What The Kaiko Data Shows

Kaiko is one of the most widely followed providers of crypto market data, and its finding that USDC has overtaken USDT in euro stablecoin trading is a striking one. For years, USDT has been the dominant stablecoin in almost every market where it operates. Its size, its liquidity and its presence on almost every exchange have made it the default choice for traders who want a dollar-pegged asset that they can move quickly and cheaply. That USDC has now overtaken it in euro trading suggests that something fundamental has changed in how European traders and platforms think about stablecoins.

How MiCA Compliance Became A Competitive Advantage

MiCA, the Markets in Crypto-Assets Regulation, is the European Union’s comprehensive framework for crypto assets. It sets out rules for issuers, exchanges, custodians and other firms, and it creates a clear legal basis for operating in Europe. For stablecoins, MiCA is particularly important, because it distinguishes between different types of tokens and sets out specific requirements for each. E-money tokens, which are stablecoins backed by fiat currency, are subject to particularly strict rules on reserves, redemption and governance.

USDC’s recognition as the European Union’s first significant e-money token under MiCA on October 14 is a milestone in that framework. The designation of significant is not just a label. It means that the token is considered important enough to warrant direct oversight by the European Banking Authority, the body that supervises banks and financial institutions across the European Union. That oversight, which covers the token’s reserves and liquidity, begins on November 12. From that date, USDC’s reserves and liquidity will be subject to direct scrutiny by Europe’s top banking supervisor, giving users and regulators a high degree of confidence that the token is backed as claimed and that it can meet redemption requests.

For USDT, the position is very different. ESMA, the European Securities and Markets Authority, is pushing to end custody and transfer services for non-compliant stablecoins, squeezing USDT further. Custody and transfer are the basic services that allow a stablecoin to be held and moved. If a platform cannot legally custody a stablecoin on behalf of its customers, and cannot legally transfer it for them, then that stablecoin becomes very difficult to use in Europe. The effect is to push traders and platforms towards compliant alternatives, even if those alternatives are smaller globally. That is exactly what the Kaiko data shows happening.

The lesson is that compliance has become a competitive advantage in its own right. In the early days of crypto, the most successful stablecoins were those that grew fastest and offered the most liquidity, regardless of their regulatory status. In Europe today, the most successful stablecoin is the one that complies with the law. That is a profound change, and it has implications far beyond the euro market. It suggests that in any jurisdiction where regulators set clear rules and enforce them, compliant stablecoins will have an edge over non-compliant ones, even if the non-compliant ones are larger and more established.

What EBA Supervision Means In Practice

Direct oversight by the European Banking Authority is a serious matter, and it is worth understanding what it means in practice for USDC and for its users. The EBA is not a light-touch regulator. It is the body responsible for ensuring that banks across the European Union are safe, well capitalised and well governed. When it takes on direct oversight of a stablecoin’s reserves and liquidity, it brings that same approach to the stablecoin market.

Reserves are the assets that back a stablecoin. For a dollar-backed stablecoin like USDC, the reserves are the dollars and dollar-equivalent assets that the issuer holds to ensure that every token in circulation can be redeemed for a dollar. Liquidity is the ability to meet redemption requests quickly, even in stressed conditions. If many holders ask to redeem their tokens at once, the issuer needs to have enough liquid assets to pay them without delay. EBA oversight of reserves and liquidity means that the regulator will check that those reserves exist, that they are held safely, and that they can be accessed when needed. That gives users confidence that the token will hold its peg even in difficult market conditions.

The start date of November 12 is therefore an important moment. It is the date from which the oversight becomes real, and from which USDC’s position as the first significant e-money token under MiCA is backed by active supervision rather than just a designation. For USDT, the contrast could hardly be sharper. While USDC moves towards closer supervision, USDT faces pressure to end the services that make it usable in Europe. The market has already responded to that contrast, and the Kaiko data shows the result.

The Small Euro Market And The Bigger Lesson

The fact that euro-backed stablecoins hold under eight percent of total euro trading volume is a reminder that the euro stablecoin market is still in its early stages. Most euro trading still uses dollar-backed stablecoins, and most of the volume is in the large global tokens rather than in tokens designed specifically for the euro market. That is not surprising. The dollar is the world’s main reserve currency, and dollar-backed stablecoins have a head start in liquidity, in exchange listings and in user familiarity. A euro-backed stablecoin has to compete with those advantages, and it has to do so in a market where the euro itself is less widely used for crypto trading than the dollar.

But the small size of the euro market does not make the flip in its hierarchy unimportant. On the contrary, the fact that regulation has been able to change the hierarchy even in a small market is a powerful signal. It shows that traders and platforms respond to regulatory signals, and that they will switch to compliant alternatives when the rules require them to. If regulation can move the market in Europe, it can move the market elsewhere too, especially as other jurisdictions adopt similar frameworks. The euro market may be small, but it is a preview of what could happen in larger markets as regulation tightens around the world.

Global Convergence Under The GENIUS Act

Europe is not the only jurisdiction moving in this direction. The United States is heading the same way under the GENIUS Act, the American framework for stablecoins. The Office of the Comptroller of the Currency issued its first final rule under the law on October 21, with reserve and redemption requirements effective January 18, 2027, and restrictions on United States platforms offering non-approved stablecoins from July 2028. That timeline gives the market time to adjust, but it also makes clear the direction of travel. In the United States, as in Europe, compliant stablecoins will have an advantage over non-compliant ones, and platforms will increasingly be required to offer only approved tokens.

The parallel between MiCA and the GENIUS Act is striking. Both frameworks focus on reserves and redemption, on ensuring that stablecoins are backed by safe assets and that holders can redeem them when they want to. Both create a category of approved or significant tokens that meet high standards, and both restrict the ability of platforms to offer tokens that do not meet those standards. The details differ, because the legal systems differ, but the underlying approach is the same. Regulators on both sides of the Atlantic have concluded that stablecoins need to be backed properly, supervised properly, and offered only through compliant channels.

Frequently Asked Questions

Has USDC overtaken USDT in euro trading?

Yes, according to Kaiko data, USDC has overtaken USDT in euro stablecoin trading. USDT remains larger globally, with a circulating supply about two and a half times that of USDC.

What is MiCA significant e-money token status?

USDC was recognised as the European Union’s first significant e-money token under MiCA on October 14. That brings direct European Banking Authority oversight of its reserves and liquidity, beginning on November 12.

Why is USDT under pressure in Europe?

ESMA is pushing to end custody and transfer services for non-compliant stablecoins, squeezing USDT further in the European market.

Is the United States moving the same way?

Yes. Under the GENIUS Act, the Office of the Comptroller of the Currency issued its first final rule on October 21, with reserve and redemption requirements effective January 18, 2027, and restrictions on United States platforms offering non-approved stablecoins from July 2028.

Source: ForexCrunch

MM Crypto Analysis Web