Crypto Long & Short: Inside the 300-to-1 onchain gap between the dollar and euro
This article explores the significant disparity between the usage of dollar-pegged and euro-pegged stablecoins in the decentralized finance (DeFi) ecosystem. It attributes the dominance of dollar stablecoins to historical path dependency and a lack of euro-denominated DeFi infrastructure.
Why it matters
Understanding the dominance of USD in onchain finance is crucial for investors and developers looking to diversify currency exposure in the growing RWA and stablecoin markets.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc., CoinDesk Indices or its owners and affiliates.
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By Ryan Connor , research partner at RockawayX
The euro is the world’s second money, representing 20% of global FX reserves versus the dollar’s 57%. The eurozone is the world's third-largest economy, and all of its activity — from trade to capital markets — is denominated in euros. Across measures of currency activity and demand, USD usage is approximately three times that of the euro. But onchain, that ratio explodes past 300-to-1. All euro-pegged stablecoins sum to €711 million, less than 1% of total stablecoin supply in dollar terms.
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