Why EU Issuers Still Back Dollar Stablecoins

In brief: European issuers are launching regulated dollar-denominated settlement tokens under MiCA because the demand they serve is priced in dollars, not euros. The argument is not that the euro should lose ground at home. It is that a euro-only product cannot clear cross-border business where roughly 90% of stablecoin settlement already runs in US dollars, and that a compliant dollar instrument keeps that activity inside Europe's supervisory perimeter rather than pushing it offshore.

The case European issuers are making is straightforward once you strip out the politics. A dollar-denominated settlement token issued under MiCA is a programmable claim on a US dollar, fully reserved and supervised by an EU authority, built for institutions that invoice, borrow, and settle in dollars. The issuers behind the current wave, Germany's AllUnity and France's SG-Forge among them, are not arguing against the euro. They are arguing that the currency of a payment instrument should follow the currency of the underlying trade, and most of that trade is still denominated in dollars.

That tension came into sharp relief on 2 October 2026, when AllUnity, a joint venture of DWS, Flow Traders and Galaxy, launched USDAU, a dollar-pegged token, across six networks. It was the firm's fourth fiat-backed token, sitting alongside its euro, Swiss franc and Swedish krona instruments. The signal was hard to miss: an issuer with a BaFin e-money licence and a euro product already in market chose to add the dollar, not because the euro had failed, but because its clients needed dollars.

Why would a European issuer choose the dollar over the euro?

Because that is where the volume is. Dollar-pegged tokens account for the overwhelming majority of global stablecoin activity, with USDT and USDC together holding close to 90% of the market and the broader stablecoin sector sitting above $300 billion. Euro-denominated tokens, by contrast, remain a rounding error. One year after MiCA's stablecoin rules took effect, the euro stablecoin market had roughly doubled to about $680 million, according to a Decta study reported in December 2025. Doubling is real growth, but $680 million against a $300 billion-plus dollar market tells you which currency the infrastructure is being built around.

An issuer looking at those numbers reaches a practical conclusion. A euro token serves European domestic use and a specific policy goal. A dollar token serves the global commerce its clients actually conduct: commodities, trade finance, correspondent flows, and treasury operations that have been dollar-denominated for decades. For a business moving money across borders, a euro-only menu is not a neutral choice. It is a product that cannot settle the transaction in front of it.

Does MiCA even allow a dollar stablecoin?

Yes, and this is the part the debate often misses. MiCA was designed to regulate stablecoins by structure, not by flag. The regulation sorts tokens into e-money tokens, which reference a single official currency, and asset-referenced tokens, which reference a basket or other assets, with the detailed rules having applied since 30 June 2024. A dollar-pegged token issued by a licensed EU electronic money institution is a perfectly ordinary e-money token under the framework. SG-Forge, the digital-assets arm of Société Générale, demonstrated exactly this when it launched USDCV, a MiCA-compliant dollar token, and later integrated it into mainstream wallet distribution.

What MiCA does impose on non-euro tokens is a usage ceiling. Where a dollar e-money token is used widely as a means of exchange within the EU, Article 23 caps it at 1 million transactions per day or €200 million in aggregate daily value, at which point the issuer must halt new issuance. The cap was written, as one analysis put it, out of a specific anxiety: the ECB did not want a dollar-pegged token to become the de facto unit of account for European retail payments. That is a constraint on retail displacement, not a prohibition on dollar instruments. For institutional cross-border settlement, which is where issuers are aiming, the structure is both permitted and supervised.

What happens if Europe does not supply this?

The demand does not disappear. It relocates. The clearest illustration is what MiCA did to Tether's USDT, the largest dollar stablecoin in the world. Because Tether chose not to pursue EU authorization, European venues moved to remove it: Coinbase, Binance and others delisted USDT from EU-facing services to comply. The appetite for dollar liquidity did not fall. It simply shifted toward whatever remained accessible, much of it outside direct European oversight.

This is the substance of the issuers' argument, and it is a supervisory one rather than a commercial one. If European institutions need dollar settlement and no compliant European dollar instrument exists, they will source dollars through channels Europe does not regulate. A MiCA-authorized dollar token reverses that. It keeps the reserves under an EU regulator's eye, keeps the issuer accountable to European law, and keeps the activity auditable within the single market. Seen this way, the dollar token is not a concession to American monetary power. It is the mechanism that brings dollar activity back inside the perimeter.

Is this a retreat from the euro, or a parallel track?

A parallel track, and the issuers themselves are explicit that these products are complements, not substitutes. AllUnity did not retire its euro token when it launched USDAU; it added a fourth currency to a shelf that already held three. SG-Forge has elevated and distributed both its euro and dollar CoinVertible lines. The pattern across the market is multi-currency issuance from a single regulated entity, where the euro serves the policy objective of a sovereign European instrument and the dollar serves the operational reality of global trade.

The European Central Bank's broader concern about digital dollarization is legitimate, and the Article 23 cap exists precisely to address it. But the policy question of whether Europe should strengthen the euro's international role and the operational question of whether European businesses need dollar settlement today are different questions. Treating them as the same thing produces a euro-only mandate that does not eliminate dollar demand. It only pushes that demand somewhere less visible.

The single thing that matters most for institutions evaluating this shift is control, not currency. A regulated dollar settlement token is not a bet on the dollar over the euro. It is a decision to keep dollar-denominated activity programmable, reserved, and auditable under European supervision rather than conducting it through instruments Europe cannot see. For issuers building on composable, compliant infrastructure, the lesson of this moment is that the currency follows the customer, and the supervisory framework should follow the currency, which is exactly the problem a platform like Issuant is built to solve.