EURC Supply Surges 43% Amid Weakening Dollar, Trade Tensions

Circle’s euro-backed stablecoin, EURC, has seen a significant surge in supply, increasing by 43% over the past month to reach a record 217 million tokens, valued at $246 million. This growth positions EURC above Paxos' Global Dollar (USDG) and below Ripple's RLUSD in terms of market capitalization. The majority of EURC tokens are circulating on the Ethereum network, which has seen a 35% increase in supply to 112 million tokens. Solana experienced the fastest growth, with a 75% expansion to 70 million tokens, while Base, Coinbase's Ethereum layer-2, saw a 30% growth to 30 million in EURC supply.

The token has also witnessed a rise in on-chain activity, with active addresses increasing by 66% to 22,000 and the monthly transfer volume exceeding $2.5 billion, a 47% increase from the previous month. This surge in activity and supply is likely driven by mounting U.S. trade tensions and a weakening dollar, which has fueled demand for euro-denominated digital assets. The greenback has weakened by 9% against the euro since the start of the year, reflecting growing economic uncertainties in the U.S. and the Trump administration's wide-scale tariff rollout.

EURC is currently the largest euro stablecoin on the market, but it still lags behind its dollar-denominated counterparts. Dollar-pegged stablecoins dominate the rapidly growing stablecoin market, with Circle's $58 billion USDC and rival Tether's $143 billion USDT token leading the way. The accelerating growth of EURC suggests a growing demand for diversification into euro-denominated digital assets as global investors navigate increasing economic uncertainties.

Xapo Bank, a Gibraltar-based Bitcoin-focused financial services firm, reported a 50% increase in euro deposit volumes during the first quarter, outpacing the 20% rise in USDC stablecoin deposits. Meanwhile, deposits in USDT declined by over 13%. 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.

Stablecoin swap volumes between foreign currency pairs on Ethereum-based decentralized exchanges also soared to multi-year highs last week, with the EUR-U.S. dollar pair dominating the activity. This trend is likely driven by the withdrawal of Tether's euro-backed stablecoin (EURT) due to E.U.-wide MiCA regulations going into effect this year. Additionally, several exchanges, including Binance, have delisted USDT for E.U. users to comply with regulations, further boosting the demand for EURC.