Turkish lira stablecoins show why Europe’s regulated euro tokens may struggle

Zodia Markets, the crypto subsidiary majority-owned by Standard Chartered, processed $3.4 billion in transactions involving Turkish lira stablecoins in 2025, enough to make the lira its second-most-used stablecoin currency behind the dollar, ahead of the euro and every other G10 currency.

Dollar-pegged tokens, led by Tether and Circle's USDC, still dwarfed everything at $110.5 billion, but euro-pegged stablecoins came in at only in the tens of millions, trailing a currency whose home economy is a fraction of the eurozone's size.

This doesn't look good for Europe, where a consortium of banks is preparing to launch a regulated euro stablecoin under MiCA while the European Central Bank works toward a digital euro. The eurozone might have the rules, the bank balance sheets, and the policy ambition, but Turkey has the people actually sending money.

Zodia's numbers point to a pattern that European policymakers would rather not confront: stablecoin adoption occurs only where users have a practical reason to tokenize money, and it doesn't depend on how large or well-regulated the underlying economy is.

Stablecoins follow friction, and the euro has very little of it

Nick Philpott, Zodia's co-founder and interim chief executive, explained the lira's success in operational terms. His clients reached for lira-pegged stablecoins instead of pushing lira through correspondent banking to reach Zodia's bank account, because the tokens settled faster, more reliably, and more cheaply, and Zodia could liquidate them on receipt.

The demand came from the friction in a specific payments corridor: the slow timelines, layered fees, and uncertain settlement that correspondent banking imposes on anyone moving lira across borders.

The euro generates almost none of that friction for the people who might otherwise hold a euro stablecoin. Euro banking rails are already clearing quickly and cheaply, so a tokenized euro solves a problem that nobody has.

The dollar, for its part, holds its position as the unit of account across crypto markets, which keeps dollar tokens dominant regardless of where the user sits. Euro stablecoins end up squeezed between a currency that people already move easily through banks and a currency that already runs the on-chain economy, with little open ground left to occupy.

CryptoSlate covered the supply side of this gap when a consortium of 37 banks across 15 countries backed the Qivalis project to issue a MiCA-compliant euro token in the second half of 2026, and again when Europe moved to slow the dollar stablecoin takeover through tighter rules and plans for a digital euro.

Europe accounts for roughly 38% of global stablecoin transactions, while euro-denominated tokens make up around 0.3% of total stablecoin supply. The euro stablecoin shortfall is a demand and distribution problem rather than a regulatory one, and Zodia's data turns that abstract gap into a concrete ranking, where a single emerging-market currency outran the entire euro token category by a wide margin.

The market is splitting into dollars for saving and local tokens for moving

The lira result fits a broader division forming inside stablecoin demand. Standard Chartered's research team, led by Geoffrey Kendrick, estimated last year that up to $1 trillion could move out of emerging-market bank deposits into stablecoins over three years, with dollar tokens drawing savings out of local banks in countries exposed to currency stress.

Turkey sat among the 16 high-risk economies the bank flagged, alongside Egypt, Pakistan, Nigeria, and others with histories of sharp currency depreciation. In their cases, dollar stablecoins serve as a substitute for a dollar bank account, capturing savings that residents want to hold outside a weakening local currency.

Local-currency tokens have a different role, working as the settlement layer that connects domestic money to global crypto liquidity. That is what the incredible usage of lira-backed stablecoins showed: clients used them to move Turkish fiat into Zodia's dollar settlement, which is how a lira token can rank second in usage while remaining tiny relative to the dollar.

Nobody at Zodia treated the lira as a competitor to the dollar for storing value, because the dollar remains where money sits, and the lira token is the on-ramp that brings domestic funds to it.

Global stablecoin firms have started building directly into that bridge. Ripple recently brought its dollar-backed RLUSD token to Turkey through partnerships with BiLira, Bitexen, and Bitlo, with BiLira's TRYB lira stablecoin backed by reserves held in local Turkish banks and routing through the country's largest local OTC desk.

Turkey processes close to $200 billion in annual crypto volume, which gives its local infrastructure real weight as it links up with global issuers. We've also seen this play out in other economies, as the IMF reported this week that Nigeria has become sub-Saharan Africa's leading cross-border stablecoin corridor, with roughly $59 billion in inflows and the digital-dollarization concerns that follow dollar tokens into any economy with a fragile currency.

This leaves us with the question of regulation. Reserves backing lira tokens now sit within Turkish banks, tying stablecoin stability to local bank balance sheets, and rapid swapping between lira and dollar tokens during a period of currency stress could move money out of those banks faster than supervisors are accustomed to managing.

A local-currency stablecoin that becomes a serious payments rail also becomes something a central bank has to account for in its own monetary transmission, a concern the IMF has already raised about dollar tokens displacing local currency in Nigeria. Turkish authorities will have to decide how far to let lira tokens grow before they start shaping domestic bank funding in ways that draw a supervisory response.

Europe is building the currency's on-chain relevance because the currency carries geopolitical weight that policymakers want to preserve in digital settlement. Turkey's lira activity took the other route, where a currency earns on-chain usage because residents and businesses have an immediate reason to move it, friction they feel directly, and a bridge they need into dollar liquidity.

That distinction, between what European institutions want to promote and what emerging-market users actually reach for, will shape which currencies end up doing real work on-chain.

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