The MiCA Act Sparks Euro Stablecoin Boom! S&P: Market Cap to Reach $1.3 Trillion in Five Years

Standard & Poor’s predicts that the euro stablecoin will surge from 650 million euros to 1.3 trillion euros, a 1,600-fold increase. The baseline forecast is 570 billion euros, with tokenized investments being the main driver of demand. The enactment of MiCA lays the foundation, with 11 banks issuing through Qivalis in the second half of 2026, covering 150 million customers.

Where does the 1,600-fold growth come from? Tokenized investments are the main engine

In a report released on Tuesday about European bank stablecoin activity, S&P Global Ratings states that, under the upside scenario, the market size of euro-pegged stablecoins could grow from 650 million euros (7.67 hundred million USD) at the end of 2025 to 1.1 trillion euros (1.3 trillion USD) by 2030, representing 4.2% of eurozone banks’ overnight deposits. This 1,600 times increase is astonishing, even within the rapidly growing crypto industry.

In the baseline forecast, S&P expects the tokenized market to reach 570 billion euros (672 billion USD) by 2030, accounting for 2.2% of total eurozone bank deposits. This forecast assumes that tokenized investments will generate a demand of 500 billion euros (590 billion USD), while tokenized payments will contribute about 100 billion euros (118 billion USD). This demand structure reveals the core growth driver for euro stablecoins: tokenized investments account for up to 88%, far exceeding the 12% from tokenized payments.

Why can tokenized investments generate such huge demand? When traditional assets (like bonds, stocks, real estate) are tokenized, investors need stablecoins as settlement tools. Imagine you want to buy tokenized German government bonds, with the counterparty in Italy. Traditional methods require cross-border clearing, taking days and incurring high costs. If both parties settle with euro stablecoins, the transaction is instant and nearly cost-free. As more assets are tokenized, demand for stablecoins will grow exponentially.

Although tokenized payments constitute a smaller share, they also have significant potential. Cross-border corporate payments, international freelancer payouts, and real-time e-commerce settlements can all be realized via euro stablecoins. Especially within the eurozone, while traditional cross-border payments are supported by the SEPA system, they still take 1-2 business days. Stablecoins can reduce this to seconds and lower transaction fees.

Notably, the report points out that, compared to the US market, there are significant differences: by the end of 2025, the total market cap of dollar-pegged stablecoins in the US will reach 310 billion USD. This means that euro stablecoins are currently only 0.2% of dollar stablecoins, a huge gap that presents both challenges and opportunities. The challenge lies in building an ecosystem from nearly zero, while the opportunity is the vast growth potential.

MiCA regulatory framework is key for institutional entry

S&P Global Ratings believes that the EU’s Markets in Crypto-Assets Regulation (MiCA) is the critical catalyst for institutional adoption of euro stablecoins. The regulation takes effect on January 1, 2025, and the report highlights its comprehensiveness. It sets strict rules for reserve asset eligibility, segregation, and redemption, and standardizes disclosure and prudential supervision requirements for issuers.

While MiCA’s strict regulation may limit innovation and flexibility in the short term, it provides certainty for institutions in the long run. Financial institutions prioritize regulatory clarity over innovation when allocating assets. Knowing that stablecoin issuers must hold 100% reserves, undergo regular audits, and keep funds segregated will make them more comfortable holding and recommending these assets. Essentially, MiCA trades short-term regulatory constraints for long-term market trust and institutional adoption.

Although the framework is now operational, S&P notes that the European Banking Authority (EBA) is still finalizing several key technical details. These include the specific composition of reserves, especially the minimum proportion of the longest-term instruments, and concentration limits on credit institution deposits. Additionally, policymakers are working on technical standards for fund requirements, recovery plans, and stress testing methods for stablecoin issuers. The EU Commission expects a comprehensive review of MiCA to be completed by June 2027.

These unresolved technical details could impact the issuance timeline and cost structure of euro stablecoins. If EBA requires excessively high liquidity reserve ratios, it will increase issuer funding costs, potentially squeezing profits or making some business models unviable. Strict concentration limits may force issuers to diversify deposits across more banks, increasing management complexity. The final decisions on these details, expected in 2026-2027, will determine the actual competitiveness of euro stablecoins.

S&P points out that outside Europe, stablecoin rules are already in effect in jurisdictions like Japan, Singapore, Hong Kong, and the UAE, while frameworks in the US, UK, and South Korea are still under development or refinement. In the US, the GENIUS Act was signed into law in July 2025, providing a federal legal basis for stablecoin issuance. This gradual global regulatory development clears cross-border application hurdles for stablecoins.

11 banks alliance to issue in H2 2026, covering 150 million customers

The agency states that euro-pegged stablecoins are “ready for adoption,” and with advances in blockchain scalability, institutional tokenization, and interoperability with emerging payment channels, demand could follow. S&P predicts that after issuance, banks and their affiliates are likely to enter the market in 2026. Eleven European banks from nine countries plan to jointly issue euro stablecoins through Qivalis, headquartered in the Netherlands, in the second half of 2026.

Qivalis is applying for an electronic money license in the first half of 2026. The alliance’s network covers approximately 150 million customers. This customer base is a key advantage; when these 11 banks promote euro stablecoins to their existing clients simultaneously, it will generate enormous initial demand. These clients are already accustomed to digital banking services, so the barrier to accepting stablecoins is relatively low. If each customer holds an average of 100 euros in stablecoins, it could create a market value of 15 billion euros.

The report also notes that 10 globally systemically important banks plan to issue G7 currency stablecoins on a public blockchain in October 2025, though specific timing and issuance locations are not yet determined. Japan’s three largest banks also plan to launch stablecoins pegged to the yen for corporate wholesale payments, with support from Japan’s Financial Services Agency. This global trend of banks embracing stablecoins supports S&P’s optimistic outlook.

Institutional forecast war: up to 1.3 trillion USD

Other institutions have issued different global market forecasts. Citigroup analysts project that, under the base case, the stablecoin market could reach 1.9 trillion USD by 2030; under an optimistic scenario, it could hit 4 trillion USD. Standard Chartered estimates that by 2028, the market size could reach 2 trillion USD. In contrast, J.P. Morgan analysts reaffirm a more conservative view, predicting that by 2028, the total stablecoin market cap will be between 50 and 60 billion USD, with tokenized bank deposits and CBDCs posing competitive pressures.

Four major institutions’ stablecoin market forecasts

S&P: Euro stablecoin 2030 at 1.3 trillion USD (1,600x growth)

Citigroup: Global stablecoins 2030 at 1.9-4 trillion USD

Standard Chartered: Global stablecoins 2028 at 2 trillion USD

J.P. Morgan: Global stablecoins 2028 at 50-60 billion USD (most conservative)

These differing forecasts reflect varying views on the competitive landscape of stablecoins. Optimists see stablecoins becoming mainstream payment and settlement tools, while conservatives believe CBDCs and tokenized bank deposits will divert most demand. S&P’s euro stablecoin forecast is relatively aggressive, indicating confidence in the MiCA framework and European banking alliance.

In the report, S&P analysts state: “We believe that, compared to current crypto asset trading uses, stablecoins’ real-world applications can support their extremely high growth multiples. However, the potential market size is highly sensitive to assumptions, leading to multiple possible outcomes.” This highlights the uncertainty in the forecasts, where small changes in assumptions can lead to several-fold differences.