Circle’s euro-backed stablecoin, EURC, has recently experienced a surge in supply, reaching a record high amidst escalating U.S. trade tensions and a weakening dollar. The increased demand for euro-denominated digital assets signals a potential shift in investor preferences as global economic uncertainties unfold.
In the past month alone, EURC’s supply has skyrocketed by 43% to 217 million tokens, valued at approximately $246 million. This impressive growth positions EURC above Paxos’ Global Dollar (USDG) and just below Ripple’s RLUSD in market capitalization, according to RWA.xyz data. Notably, the majority of EURC tokens are circulating on the Ethereum network, increasing by 35% to 112 million, while Solana has seen its supply expand by 75% to 70 million tokens. Additionally, the Base layer-2 solution from Coinbase recorded a 30% growth in EURC supply to 30 million tokens.
Alongside its supply increase, EURC has witnessed a notable uptick in on-chain activity. Active addresses for the token rose by 66% to 22,000, and the monthly transfer volume exceeded $2.5 billion, reflecting a surge of 47% within the same timeframe, as noted by RWA.xyz.
Currently, EURC stands as the largest euro stablecoin available, although it still trails significantly behind dollar-denominated counterparts. The stablecoin market remains predominantly influenced by dollar-pegged assets, with such assets accounting for 99% of the rapidly growing market. This is largely driven by Circle’s USDC, valued at $58 billion, and Tether’s USDT, which stands at $143 billion.
The swift growth of EURC may indicate a shifting demand towards diversification in euro-denominated digital assets. As the global economic landscape becomes increasingly unstable, particularly in the U.S. due to the expansive tariff rollout under the Trump administration, many investors appear to be seeking alternative investments. Interestingly, the dollar has weakened by 9% against the euro since the beginning of the year.
A recent report from Xapo Bank, a Bitcoin-focused financial services firm based in Gibraltar, highlighted a 50% increase in euro deposit volumes during the first quarter. This eclipses the 20% rise in USDC stablecoin deposits, while deposits in USDT saw a decline of over 13%. The report emphasized that “this rapid increase in volume came amidst mounting concern about the future of U.S. dollar primacy and the threat of a U.S. recession as markets braced for Trump’s planned ‘Liberation Day’ in April.”
Furthermore, stablecoin swap volumes involving foreign currency pairs on Ethereum-based decentralized exchanges surged to multi-year highs last week, with the EUR-U.S. dollar pair dominating activity, as reported by Blockworks data.
EURC may also have gained traction following Tether’s withdrawal of its euro-backed stablecoin (EURT) in response to upcoming E.U. regulations under MiCA, which are set to take effect this year. Several exchanges have taken measures to delist USDT for users within the E.U., including Binance’s decision at the end of March.
