Greetings Wednesday,
This is your institutional digest, Crypto Long & Short. This edition:
- The dollar outpaces the euro roughly 3 to 1 offchain and surpasses 300 to 1 onchain. Ryan Connor of RockawayX discusses what has blocked euro capital previously and what is shifting now
- Key headlines for institutional players curated by Francisco Rodrigues
- “StonkFun revenue surges as memecoin enthusiasm attracts onchain focus” in our Chart of the Week
Thanks for tuning in!
300 to 1: The Ultimate Opportunity In Stablecoins
By Ryan Connor, research partner at RockawayX
The EUR-USD Onchain Gap
The euro serves as the secondary global currency, accounting for 20% of worldwide foreign exchange reserves compared to the dollar’s 57%. The eurozone functions as the third-largest economy globally, with all its operations—ranging from commerce to financial markets—priced in euros. Across metrics of currency engagement and demand, USD utilization is roughly triple that of the euro. Yet onchain, that proportion skyrockets past 300-to-1. All euro-denominated stablecoins combine for €711 million, representing under 1% of total stablecoin circulation in dollar figures.
Euro stablecoin activity remains modest, though it is expanding quickly. Euro vault assets under management across decentralized finance climbed from approximately €12 million a year ago to €135 million currently, still comprising just 2.4% of aggregate vault assets. We anticipate that euro-denominated real-world asset yield mechanisms will accelerate EUR stablecoin expansion.
Path Dependency & Missing Infra
Onchain euro issuance lags behind traditional offchain markets largely due to two factors: historical path dependency and a scarcity of euro-centric decentralized finance infrastructure.
Path dependency. Stablecoins originated to clear cryptocurrency trading, and crypto pairs were initially valued in dollars. Because the primary pair was USD, USD stablecoins debuted to correspond with the instruments they cleared.
Missing infrastructure. Vault frameworks and looping—where each individual loan finances subsequent purchases—spurred dollar-denominated decentralized finance. Dollar-denominated yield-generating assets emerged onchain. Lending platforms accepted them as collateral and extended dollar liabilities against them, enabling participants to acquire additional dollar-denominated yield-generating assets.
As a result, every major onchain lending marketplace today mirrors this dollar-denominated looping trade. Euro-denominated leverage platforms failed to materialize because the components of the loop were absent.
Dollar Defi is Insufficient for Euro-Denominated Users
Euro-denominated vault architecture represents a vital market necessity for European investment managers, corporate treasuries functioning and reporting in euros, and European decentralized finance participants who calculate in euro terms. These cohorts embody substantial latent demand, having been structurally constrained from fully engaging in the onchain ecosystem owing to heavy foreign exchange risk and hedging expenses.
A hypothetical euro-based investor participating in a vault yielding dollar-denominated returns essentially maintains dual positions: the yield-producing vault asset and an unhedged short-euro foreign exchange position. Investors can either absorb or hedge that risk. Both paradigms illustrate the substandard user experience confronting European decentralized finance participants today.
Mitigating USD exposure back to EUR demands roughly 1% currently, reducing a 3.2% dollar annual percentage yield to a 2.0% net return against a 3.0% Euribor, which has kept the market-weighted decentralized finance lending percentage beneath the EUR risk-free benchmark across roughly 60% of weeks since 2023 and 97% of weeks during 2026. This establishes a structural impediment capable of effectively barring euro-denominated capital from decentralized finance.
EUR-Denominated RWA Vault Infra: Enabling The Next Wave of EUR-Stablecoin Adoption
The onchain euro marketplace has traversed two distinct cycles.
The initial adoption surge peaked during 2022 near €630 million, spearheaded by EURT, which ultimately wound down due to non-compliance with Markets in Crypto-Assets regulations.
The subsequent cycle differs. Supply has doubled from its troughs to reach an all-time high of €711 million. Unlike the initial surge, the contemporary float comprises Markets in Crypto-Assets-regulated electronic money tokens like EUROP and EURCV.
The euro-focused infrastructure deficit is likewise being resolved presently. Schuman and SG Forge are distributing regulated euro stablecoins. Obligate is tokenizing euro trade finance; Midas has introduced Fasanara’s euro credit strategy onchain. RockawayX is assembling euro vaults utilizing these assets on Kamino and Morpho, which provide the leverage mechanism.
By introducing euro-denominated yield-producing collateral alongside native euro credit, we are replicating the flywheel that enabled dollar-denominated decentralized finance to scale, albeit within a regulatory framework that is presently definitive for euro allocators.
Concluding remarks
The euro introduces one of the most substantial opportunity frameworks within decentralized finance since the pre-pandemic era. As Markets in Crypto-Assets-compliant issuance expands and native euro-denominated collateral, credit, and vault rails deploy, the 300-to-1 EUR/USD disparity should narrow swiftly. We project the upcoming 12 to 24 months to be characterized by a competitive drive to establish liquidity, distribution, and composable EUR primitives.
Headlines of the week
This week’s updates demonstrate traditional finance constructing proprietary stablecoins while regulators and exchanges integrate blockchain into core market infrastructure. A consortium of 21 banks established a 2027 rollout goal, the Securities and Exchange Commission proposed acknowledging onchain share ledgers, and Circle agreed to acquire Tazapay for $400 million.
- Citi, Goldman, other global banks and asset managers team up on stablecoin venture: The alliance, incorporating Bank of America, Citi, Goldman Sachs, Wells Fargo, UBS, and Fidelity, intends to found an issuing entity during the second half of 2026 and release a GENIUS- and Markets in Crypto-Assets-compliant token early in 2027.
- SEC proposes recognizing blockchains as official share registers: The primary transfer-agent overhaul in decades will permit ownership registries to reside onchain while establishing reporting mandates governing tokenized securities, with a 60-day public comment window.
- Circle agrees to buy Tazapay for $400 million: The all-stock transaction provides Circle with a processing network handling exceeding $25 billion annually across over 100 markets, with stablecoins already factoring into roughly 60% of transaction volumes.
- London Stock Exchange works with Payward to tokenize its 100 largest stocks: The xStocks will launch across exceeding 110 jurisdictions, featuring intentions to introduce them onto the London Stock Exchange’s round-the-clock marketplace in 2027 pending regulatory clearance.
- OpenReserve wins preliminary approval for a national bank charter: The crypto-native full-service institution is required to raise a minimum of $210 million alongside sustaining a 12% Tier 1 leverage ratio across its initial three years prior to launching tokenized deposits, stablecoins, and onchain settlement capabilities.
Chart of the Week
StonkFun revenue ignites as memecoin mania gathers onchain attention
StonkFun operates as a Solana launchpad empowering any individual to deploy a token paired against any asset, permanently locking its Raydium liquidity pool. StonkFun collects fees from that secured liquidity, deploying a fraction to repurchase and burn STONK tokens. Revenue expanded roughly 561% over the prior week (a single $804,000 day accounted for 60% of volume), whereas STONK appreciated approximately 679% across the identical timeframe.
Seeking further insights? Access contemporary cryptocurrency updates via coindesk.com and market analytics via coindesk.com/institutions.
Originally published at https://www.coindesk.com/coindesk-indices/2026/09/08/crypto-long-and-short-inside-the-300-to-1-onchain-gap-between-the-dollar-and-euro.
