Turkish Lira Stablecoins Highlight 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. This volume made the lira its second-most-used stablecoin currency behind the dollar, surpassing the euro and every other G10 currency.

Dollar-pegged tokens, led by Tether and Circle’s USDC, still dwarfed all other assets at $110.5 billion. However, euro-pegged stablecoins accounted for only tens of millions, trailing a currency whose home economy is a fraction of the eurozone’s size.

This trend poses challenges 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 possesses the rules, bank balance sheets, and policy ambition, but Turkey has the users actively sending money.

Zodia’s data reveals a pattern that European policymakers might prefer to overlook: stablecoin adoption occurs where users have a practical reason to tokenize money, and it does not depend on the size or regulatory quality of the underlying economy.

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. Clients chose lira-pegged stablecoins over traditional correspondent banking to reach Zodia’s bank account because the tokens settled faster, more reliably, and more cheaply, allowing Zodia to liquidate them upon receipt.

The demand stemmed from friction in a specific payments corridor: the slow timelines, layered fees, and uncertain settlement that correspondent banking imposes on cross-border lira movements.

The euro generates minimal friction for those who might otherwise hold a euro stablecoin. Euro banking rails already clear quickly and cheaply, meaning a tokenized euro solves a problem that few people actually experience.

The dollar maintains its position as the unit of account across crypto markets, keeping dollar tokens dominant regardless of user location. Euro stablecoins are squeezed between a currency that people already move easily through banks and a currency that already dominates the on-chain economy, leaving little open ground.

CryptoSlate previously 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. Europe also 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. Zodia’s data turns this abstract gap into a concrete ranking, where a single emerging-market currency outran the entire euro token category by a wide margin.

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

Local-currency tokens serve a different role, acting as the settlement layer that connects domestic money to global crypto liquidity. This is what the significant usage of lira-backed stablecoins demonstrated: clients used them to move Turkish fiat into Zodia’s dollar settlement, explaining how a lira token can rank second in usage while remaining tiny relative to the dollar.

No one 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 acts as the on-ramp bringing domestic funds to it.

Global stablecoin firms have begun building directly into this bridge. Ripple recently launched its dollar-backed RLUSD token in Turkey through partnerships with BiLira, Bitexen, and Bitlo. BiLira’s TRYB lira stablecoin is backed by reserves held in local Turkish banks and routes through the country’s largest local OTC desk.

Turkey processes close to $200 billion in annual crypto volume, giving its local infrastructure significant weight as it links with global issuers. This pattern has also emerged in other economies; 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 raises questions about regulation. Reserves backing lira tokens now sit within Turkish banks, tying stablecoin stability to local bank balance sheets. Rapid swapping between lira and dollar tokens during periods 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 must account for in its own monetary transmission. This is a concern the IMF has already raised regarding dollar tokens displacing local currency in Nigeria. Turkish authorities will need to decide how far to let lira tokens grow before they begin 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 a different 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.

This 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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