As Circle expands its influence in Europe’s stablecoin market with its euro-backed stablecoin EURC, some in the market see it not as the result of product competition but as an outcome shaped by regulatory responses and changes in the policy environment.

On April 10 local time, blockchain media outlet Cryptopolitan reported that the core of the controversy is that Circle quickly took an early lead even though local European projects exist. DeFi analyst Ignas called it “Europe’s failure.” He said Europe is falling behind in stablecoins, after Big Tech, cloud and artificial intelligence (AI).

Ignas argued that EURC is not even Circle’s core business. EURC has a market capitalisation of about $460 million, but USDC, Circle’s main product, has a market capitalisation of more than $78 billion. He described EURC as a secondary project by a U.S. company and criticised Circle, saying it did not win on product but “lobbied to make market regulation favourable to itself.”

The implementation of the European Union’s crypto regulatory framework MiCA, the Markets in Crypto-Assets Regulation, is cited as the backdrop for that assessment. Ignas said Circle policy chief Dante Disparte has called MiCA “the GDPR of the crypto industry” since 2022 and supported its institutionalisation. He also claimed Circle held “Navigating MiCA” sessions with Stefan Berger and was effectively the only one among the top 10 stablecoin issuers to have secured a licence at the time MiCA took effect.

By contrast, local European stablecoin projects such as Kybalis, EURe, EURI and EURA have not been able to scale due to a lack of funding and incentives for adoption. Ignas claimed Circle secured European market share on the basis of a French electronic money institution (EMI) licence and, with little competition, raised its share from 17 percent to 60 percent over 12 months.

That trend also intersects with the European Central Bank’s (ECB) discussions on a digital euro. The ECB is pushing to introduce a digital euro by 2029, but a plan for a 3,000-euro holding limit per wallet is under discussion. Ignas said such a design could hinder adoption. If private stablecoins lock in network effects first, public-sector digital currencies could have less room to establish themselves.

The next issue is shifting to the UK. Ignas claimed Circle is repeating the same approach in Britain. He said Disparte has recently been pushing in the House of Lords for legislation combining MiCA with the GENIUS Act.

Criticism over security responses has also continued. Circle has recently been caught up in a dispute over the speed of its response after a Solana-based Drift Protocol hack. The hack stole $285 million, and $71 million of that moved into USDC. On-chain investigator ZachXBT questioned whether Circle could have frozen suspicious addresses faster. He claimed that across 15 cases over the past few years, losses totalled $420 million.

PeckShield also said hackers converted a significant portion of the remaining stolen assets into USDC. It added that a hacker used Circle’s cross-chain transfer protocol CCTP to move about $232 million worth of USDC from Solana to Ethereum after the Drift hack.

Ultimately, Circle’s expansion in the European market is spreading into an issue intertwined with regulatory responses, network effects and responsibility for security controls, not only market share gains. As existing European projects fail to break through scale limits, the next point to watch is whether Circle can extend its influence to the UK.

2/ The worst part is Circle didn't even win on product. They lobbied for the rules that gave them the market. Dante Disparte (Circle policy chief) was lobbying for MiCA as "GDPR for crypto" since 2022. Circle hosted "Navigating MiCA" sessions with Stefan Berger, the European… pic.twitter.com/OBWIr0cQzZ