A working paper published on September 9, 2026 argues that Europe's flagship crypto-asset regulation is walling off the bloc's investors from the bulk of global stablecoin liquidity, rather than protecting them from it. The paper is co-authored by Ulrich Bindseil, former Director General of Market Infrastructure and Payments at the European Central Bank, and Patrick Hansen, Director of Strategy and Policy for the EU at Circle, issuer of USD Coin.
"It sounds protective, but it is not," the authors write of MiCA's approach to stablecoin circulation within the EU.
The paper points to the scale of the imbalance. The digital money market they examine is worth $320 billion, with dollar-denominated stablecoins accounting for more than 99% of it — $316,000 million against just $3,200 million in euro-denominated tokens, according to the chart cited in the document.
A follow-up to an April warning
The findings build on an earlier study Bindseil co-authored with Blockchain for Europe in April 2026, which concluded that euro-denominated crypto assets were "ultrasecure but commercially weak" under the current EU regulatory framework.
The new paper puts numbers behind that conclusion. Of 23 e-money token issuers authorised under MiCA, only three stablecoins — USDG, USDC and EURC — fully meet the EU's circulation conditions among the top 50 stablecoins by global market capitalisation. Tether's USDT, with roughly $184 billion in market volume, continues to operate outside the EU regulatory framework altogether. The authors note that 20 EU-compliant alternatives exist, but see little actual use. Among the 23 authorised issuers, only nine hold a custody licence as a crypto-asset service provider, leaving 14 without one.
Regulators already flagged the risk
The paper's concerns echo a warning issued by the European Systemic Risk Board in late 2025 about financial contagion threats posed by stablecoin schemes run by entities outside EU jurisdiction. In March 2026, Germany and Italy proposed an "emergency switch" mechanism that would let regulators freeze operations involving foreign digital currencies during periods of high volatility.
The European Commission has been examining possible fixes. Between May 20 and August 31, 2026, it ran a public consultation on reviewing MiCA, including the feasibility of mutual recognition agreements for stablecoin issuers based outside the EU.
An equivalence regime as the proposed fix
Bindseil and Hansen argue that the long-term solution lies in that direction. "The best long-term alternative is an equivalence/recognition regime that allows well-regulated foreign stablecoins to circulate in the EU, without duplicating the issuance and reserve structure," they write, citing the US GENIUS Act as a model framework that could be recognised.
Not everyone at the Commission is convinced such an opening comes without conditions. Peter Kerstens, the Commission's advisor for digitalisation of the financial sector, said any opening to third-country issuers must come with safeguards equivalent to those required of European issuers.
