Table of Contents
Circle, a global online financial company and the creator of USD Coin (USDC), has stated that it is planning to launch Euro Coin, a fully-reserved, Euro-pegged stablecoin (EUROC).
Euro Coin is a regulated, Euro-backed stablecoin that will be accessible on June 30, 2022, and will be produced under the same full-reserve model and constructed on the same foundations of trust, faith, transparency, and security that have made USDC one of the world’s leading digital currencies.
The debut of Euro Coin intends to build on Circle’s success in enabling frictionless financial value exchange and bridging the gap between crypto-native and traditional financial services. Businesses may utilize EUROC tokens to shift Euro liquidity on-chain, accept and make worldwide Euro payments that settle in minutes, and leverage crypto capital markets for trading, borrowing, lending, and more.
Starting with Silvergate Bank, Euro Coin is entirely backed by Euro-denominated reserves stored conservatively in the custody of renowned financial institutions inside the US regulatory perimeter.
Before diving deeper, let’s get an overview of Circle, the global internet finance firm.
An introduction to Circle
Circle, a Boston-based financial services firm that employs blockchain technology for peer-to-peer payments and crypto-related businesses was founded in 2013.
The company, which started as a consumer-facing P2P payment and cryptocurrency wallet and exchange software, has changed its focus to commercial blockchain and crypto applications. In 2018, Circle announced the USD Coin (USDC), a stablecoin backed by $1 or an asset of equivalent, fair value.
The Ins & Outs of EUROC
- The Euro Coin (EUROC) will be entirely backed by Euro-denominated reserves held by financial organizations “within the US regulatory perimeter.”
- EUROC joins a list of Euro-backed stablecoins, including Tether’s EURt and Malta’s Stasis’ EURS. Tether is the creator of USDT, the biggest dollar-pegged coin, with a market valuation of more than $70 billion, compared to $54 billion for USDC.
- Euro Coin is a regulated, Euro-backed stablecoin based on the same full-reserve mechanism and foundations of trust, transparency, and security that have established USDC as one of the most trusted digital currencies in the world.
- Euro Coin will be available as an ERC-20 standard token on the Ethereum network on June 30. Later this year, support for other blockchains is expected. According to the release, several platforms, including Binance.US, will support the stablecoin at launch.
- The Euro coin and the USDC are designed to open up new possibilities for on-change foreign exchange and multi-currency digital finance by allowing smooth, quick, and low-cost transactions.
Who can use the Euro Coin?
- Exchanges
Customers may convert Euros to Euro Coin on exchanges, providing access to new digital asset trading pairings and near-instant stablecoin FX.
- Institutional traders
Make trades with Euro Coin and profit from arbitrage possibilities on digital asset exchanges and in decentralized finance (DeFi).
- Businesses
Accepting Euro Coin payments will help you extend your consumer base and increase your cash flow. Pay suppliers, vendors, and workers worldwide with funds that can settle in moments.
- Individuals
Pay for items at participating retailers, send money to friends and family across borders swiftly, and utilize Euro Coin throughout the Web3 ecosystem.
Why was Euro chosen?
According to the Bank for International Settlements (BIS), the Euro is the world’s second-biggest fiat currency in terms of foreign exchange turnover. Moreover, the Euro was on one side of 32% of all currency exchanges, according to the BIS’ 2019 Triennial Central Bank Survey.
The Euro is the unified currency of the Eurozone’s 19 members, having been introduced in 1999. Its dominance as a trading pair is shown in the United States Dollar Index, or DXY, which has a weighting of 57.6 percent.
Why was EUROC introduced as another stablecoin?
The launch of EUROC came at a time when users of stablecoins were experiencing considerable speculation and a lack of trust. These worries follow the collapse of the TerraUSD (USTC) stablecoin and fears about Tether (USDT) briefly falling below a dollar.
Unlike EUROC, which will be fully backed by reserves such as USDC, the Euro-pegged stablecoin’s reserves will be fully backed by Euros.
This appears to be the primary distinction between the EUROC and the USDC, which is backed by cash and short-term US government bonds.
As a result, for each EUROC token in use, a reserve in Euros will be maintained in custody at financial firms subject to US regulatory control. The first custodian for the EUROC stablecoin will be Silvergate Bank.
To learn more about stablecoins, click here!
Bottom line
Businesses can start minting Euro Coin on June 30 by depositing Euros into their Circle Account over Silvergate’s Euro SEN network. Later this year, more deposit choices are likely to become available.
Euro Coin will be open to non-Circle Account users via digital asset exchanges and DeFi protocols once trading commences. Click here to stay up-to-date on this!
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
