Stablecoins continues to grow into the column of both cryptocurrencies and the global financial system. It has already exceeded the market 235 billion dollarsShow that people have confidence in the future of these assets.
Currently, there are two US dollars -backed Stablecoins (USDT and USDC) about 90 % of the market. The remainder of the best 10, including USDE and Pyusd, are all resistant to the dollar. The euro -based Stablecoins has a small market share in comparison. Why this?
There are many discussions about the organization, the interview, and the integration with Trafi. However, the most important factor is liquidity. Without deep and sustainable liquidity, no stablecoin can get a mass traction, and this will not change a degree of organizational clarity.
What is the problem with Stablecoins other than USD?
Let’s take the euro as an example. EUR -backed Stablecoins was present for years at this stage, however hardly used. This is mainly due to liquidity challenges. This is what ultimately determines whether Stablecoin can become a widely used financial tool.
For years so far, US dollar -backed Stablecoins such as USDT and USDC have been the dominant force in this scene, as it works as a main source of liquidity in lending pools and trading couples. The US dollar -backed Stablecoins enjoy deep liquidity, high trading sizes, and wide integration via CEFI/Defi platforms.
In contrast, the euro stablecoins (and other USD) suffer from a lack of market mechanisms that it can maintain. Simply, there is not enough trading pairs, users and financial tools that are designed around to create a suitable liquidity ecosystem like what Stablecoins USD possesses.
One of the main reasons for this liquidity gap is that the central market makers do not see a sufficient financial incentive to provide liquidity for Euro Stablecoins. It is simply not profitable enough for them. So they give priority to other assets, leaving the euro -backed Stablecoins on the feet.
This is not just a matter of preferences – it is an essential issue more economical in nature. If the market makers are not able to achieve a decent return on providing liquidity for these assets, they will not allocate the capital towards them.
So, how can this be changed?
Is the organization the key or just a side factor?
An argument can be made that if it is moved in other judicial states in terms of setting clear rules, Stablecoins will become more attractive USD. For example, the introduction of the MICA regulations into the European Union has paved the way for EUR, which is supported by EUR euroTransform them into an increased alternative to the application to consider when merging with Trafi.
To some extent, I agree. Since the various judicial states around the world continue to move towards better regulation of digital assets, we can expect more stability tied to local currencies to start crops. In Asia, the Middle East and Latin America – areas tend to use these assets to improve their financial stability. Besides, it will also help them reduce dependency on the US dollar.
We have already supportive examples here, such as Singapore XsGD Or Switzerland Xchf. Hong Kong also launched HKD-PEGID Stablecoin in December 2024. The trend appears clear.
However, the organization alone is not the decisive factor. The backed Stablecoins was from euro before Mika came. It is still unclear whether the frame will eventually help or hinder their long -term dependence. Mika can work as a kind of “restrictions” on Stablecoins supported by US dollars in Europe. This euro stablecoins is likely to give an unfair advantage rather than making it a real competitiveness for its own advantages.
At the end of the day, regulations cannot solve the most fundamental issue of liquidity. Without it, no regulatory framework can make Stablecoin sufficiently sufficiently for wide use. So, the question is: How can we create liquidity for Stablecoins other than USD?
Treat liquidity restrictions
To put things in their right quorum, Market value From USDT and USDC standing at $ 141 billion and $ 56 billion, respectively. In comparison, Stablecoins is based on EURC or EURS barely exceeding $ 100 million. The enormous gap is clear, and directly affects its use. This is less than trading pairs, less Defi integrations, and ultimately, is the lowest incentive for merchants and institutional players to adopt them. As a result, they cannot become major origins.
A case can be submitted to OirWhat I use personally and I find it most stablecoin euro is the most suitable for application in the real world. However, the broader Stablecoin market still faces the same challenges: limited adoption, a fewer number of integration, and a long distance before they can compete with their dollar supporters.
One of the possible solutions is to develop the most effective liquidity algorithms for non -USD stablecoins. Dependence on professional market makers has proven ineffective, and therefore the new approach is necessary, with mechanisms that can guarantee strong liquidity without relying entirely on those parties.
The most effective approach, in my mind, will first be to create deep liquidity pools between the US dollar and the unused Stablecoins. This is the most practical way to ensure smooth transfers, as it will deal directly with the basic problem. But it requires improving the AmM Maker algorithms to make saving liquidity more efficient and attractive to service providers.
The road to Stablecoins is not viable
What matters most is how much liquidity providers can earn. If the incentives are present, the liquidity will improve, and the adoption will follow naturally. This is not only about attracting more capital-it is about restructuring liquidity in a way that guarantees long-term profits.
Without improvements to infrastructure, Euro Stablecoins and their counterparts will continue, despite their potential. Stablecoins is only strong like liquidity. The key is to build models that make liquidity providing profitable – because once financial incentives align, everything else will happen in place.
Looking at the future, I can see Stablecoins other than USD acquires a competitive advantage in specific cases, such as border transfers, Forex trading on the chain, and decentralized lending. Companies working worldwide may benefit but need to manage cash flows in multiple currencies from the unused Stablecoins borrowing while maintaining their bonds in US dollars.
In addition, liquidity pools that facilitate Stablecoin’s bodies between different FIAT categories can be valuable stores, which may lay the basis for a more central financial financial system.
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