Euro Stablecoin Boom Will Be Driven by RWA Tokenization, Not Payments: S&P Global

Euro-pegged stablecoins are poised to scale rapidly in Europe, according to a new report by S&P Global Ratings. The driver won’t be payments, but tokenized investments, the firm said.

In the report, published on Tuesday, Feb. 3, S&P Global projected that the euro stablecoin market will grow from its current value of €650 million to anywhere between €25 billion and €1.1 trillion in the next four years. Most of that expansion, in the firm’s baseline view, will be driven by real-world asset (RWA) tokenization for investment purposes, “and, to a lesser degree, payments with stablecoins,” the report reads.

Data from CoinGecko shows that Circle’s euro-pegged stablecoin EURC has a market capitalization of about €360 million today, accounting for nearly half of the euro stablecoin market.

Analyzing USD-pegged stablecoins, which make up the majority of the sector, the analysts found that just 5% of the USD stablecoin supply, which totals around $300 billion, is currently used for private-sector payments. Assuming a similar dynamic for EUR-pegged stablecoins, the analysts forecast in their baseline scenario an at least 800x increase in total supply by 2030, of which a small portion would be used for payments.

By comparison, tokenized investments would need way more stablecoins to actually work at scale. S&P Global says that moving even a small slice of Europe’s €28 trillion RWA market on-chain could mean hundreds of billions of euros sitting in stablecoins just to handle settlement.

In recent weeks, the total market cap of tokenized gold has surged as record spot prices drive increasing investor interest among risk-off sentiment in the markets.