American stablecoins dominate 99% of the global market. Meanwhile, China is advancing with its e-CNY. Europe, supported by MiCA and the euro stablecoin EURAU, regulated by BaFin, seeks to close the gap. But can it move fast enough?
In this context, BeInCrypto spoke with Gracy Chen, CEO of Bitget, about the strengths of Europe, its regulatory challenges, and the possibility for the EU to still play a dominant role in digital finance.
BeInCrypto: How do you assess Europe’s position against the United States and Asia?
Gracy Chen: Europe is anchored in MiCA, which provides a unified legal framework but imposes a high compliance burden. Issuers must therefore maintain full reserves, hold significant capital, and obtain an EMI license. This protects users but raises entry barriers and slows growth.
In contrast, the GENIUS Act in the United States adopts a lighter approach focused on innovation. This has allowed private issuers like Circle and Tether to grow rapidly by integrating USDC and USDT into Visa and Mastercard networks.
Asia, in parallel, remains focused on CBDCs, with private stablecoins still playing a limited role.
Is the MiCA framework sufficient to stimulate innovation?
BeInCrypto: Does MiCA foster innovation or does Europe need more flexibility?
Chen: MiCA is a solid foundation, but Europe needs three adjustments: faster authorization for CASPs and issuers, enhanced support for multi-bank reserve models like EURAU, and harmonized implementation across all member states.
Without this, Europe risks regulatory fragmentation and slower adoption.
EURAU and European sovereignty
BeInCrypto: What does the launch of EURAU mean for Europe?
Chen: The EURAU represents a significant milestone. As the first crypto asset backed by the euro regulated by BaFin in Germany, it offers a compliant alternative to USD stablecoins and strengthens Europe’s monetary sovereignty. Regulatory clarity, she adds, is the trigger for institutional adoption and use cases for cross-border payments.
What Europe needs to do to remain competitive
BeInCrypto: What are the most urgent steps for the EU?
Chen: Europe must transition from political clarity to operational readiness. The priority is to accelerate euro stablecoins compliant with MiCA that are natively integrated into SEPA Instant or TIPS, in order to facilitate fast and low-cost ramps.
Europe also needs Level 2 standards, EU-wide passports, and explicit rules for yield-generating products such as tokenized T-bills — an area where the EU can differentiate itself from the United States.
Infrastructure also matters. Europe therefore needs unified fiat ramps, merchant acceptance programs, interoperability rails, and a common supervision manual.
Furthermore, a sandbox dedicated to stablecoins and toolkits for developers could attract new issuers and bridge the innovation gap.
Establishing trust: compliance and technology
BeInCrypto: What inspires confidence in European stablecoins?
Chen: Transparency and audited reserves. The quarterly reporting requirements of MiCA help prevent the opacity that led to the collapse of TerraUSD.
Mandatory AML/KYC integration and secure, audited smart contracts provide additional guarantees for institutions and individual users.
Will Europe become a major player in stablecoins?
BeInCrypto: Can Europe compete with the United States in the next 3 to 5 years?
Chen: Europe can become a respectable player, but it is unlikely to surpass the United States, which already controls almost the entire market through mature private ecosystems. Europe’s advantage lies in its regulatory clarity, but it must accelerate innovation to turn this framework into real adoption.
Regulation vs innovation
Europe has what other regions lack: a comprehensive and unified regulatory framework. However, rules alone will not suffice to bridge a 99% market gap.
As Gracy Chen warns, the EU must therefore combine MiCA with speed, infrastructure, and incentives. It remains to be seen whether this will be enough to challenge American dominance — and we might find out quite soon.
