Crypto regulation in Europe is delivering safety at the cost of market competitiveness, according to fresh analysis of the EU’s flagship framework.

The Markets in Crypto-Assets Regulation (MiCA), which took effect across the European Union last year, has successfully made euro-denominated stablecoins substantially safer for users. But that very success has left them nearly invisible in global markets—a sobering trade-off that raises questions about whether the bloc’s approach to crypto regulation is optimal.

As first reported by CoinTelegraph, a new analysis from industry group Blockchain for Europe found that euro stablecoins now account for less than 1% of global stablecoin trading volume, despite the euro’s far larger share of international commerce. The gap underscores a fundamental tension in crypto regulation: rules designed to protect consumers can simultaneously strangle the innovation and adoption they were meant to enable.

MiCA’s Design Creates Safe but Uncompetitive Assets

The regulation’s specific constraints on euro electronic money tokens (EMTs) tell the story. MiCA requires these assets to be fully backed by reserves—a safeguard that eliminates counterparty risk. But it also prohibits interest payments, a restriction intended to prevent stablecoins from functioning as unregulated deposit substitutes.

That ban cuts to the heart of the problem. In a positive interest rate environment, euro stablecoins offer users zero yield while competing directly against bank deposits that pay interest, and US dollar stablecoins that distribute returns through alternative mechanisms. The result: rational actors choose other options.

Drafted by European Central Bank official Ulrich Bindseil and Blockchain for Europe’s Erwin Voloder, the report frames this as a regulatory “Laffer curve” problem—the point where stricter rules actually reduce the activity they aim to govern. Euro stablecoins have moved onto the downward slope.

The analysis reflects a broader debate among regulators and policymakers about how different jurisdictions balance consumer protection with market functionality. The EU prioritised safety. Other regions, particularly the US, have taken different approaches.

France Escalates Enforcement Against Crypto Crime

Separately, French authorities are cracking down hard on physical violence targeting crypto owners. At least 88 people, including 10 minors, have been indicted in connection with alleged wrench attacks—a term referring to robbery involving physical force or threats used to coerce victims into transferring digital assets.

According to Vanessa Perrée, France’s national prosecutor for organised crime, 75 of the accused are in pre-trial detention. The arrests span 12 active cases under investigation by specialised judges at the Paris Judicial Court and overseen by the National Prosecutor’s Office for Organised Crime (PNACO).

The scale of the problem is accelerating. PNACO data shows 18 recorded wrench attack incidents in 2024, jumping to 67 in 2025, with 47 reported so far in 2026. Blockchain security firm CertiK reported a global 75% year-over-year increase in such attacks during 2025.

These crimes take multiple forms—home invasions, kidnappings, extortion attempts—making them among the most serious offences French prosecutors face. The legal classifications include arrest, abduction, organised group sequestration, and extortion under duress.

Perrée’s statement emphasised both the severity of harm to individuals and the organised nature of the perpetrators. The enforcement action signals that France, like other major economies, is treating crypto-related violent crime with the same seriousness it applies to traditional organised crime.

The contrast between Europe’s regulatory and enforcement approaches highlights the multifaceted challenge regulators now face: designing rules that protect consumers without strangling markets, while simultaneously prosecuting serious criminals who exploit the sector’s cash-and-carry nature to finance their activities.