Circle will launch 100% euro-backed stablecoin, Euro Coin
3 min read
Circle, the issuer of the USDC stablecoin, has added a new coin to its portfolio. according to official announcement, the new stablecoin will be called Euro Coin (EUROC) and the launch will take place on June 30.
USDC issuer launches second stablecoin, Euro Coin
As the name makes clear, EUROC will be backed by the euro, the common European currency. Circle stated that the stablecoin will have the same system as USDC. That is, the company’s euro reserves will provide 1-to-1 backing in EUROC against the euro.
According to Circle’s announcement, the assets backing EUROC will be denominated in euro. At the same time, the stablecoin will have the same transparency mechanisms used in USDC.
“Together with USDC, Euro Coin will unlock new possibilities for multi-currency digital banking and near-instant exchange,” the company said.
EUROC is the second stablecoin created by Circle, which has a partnership with Coinbase. Now, the company wants to occupy the stablecoin market, which was put in jeopardy after the collapse of UST. In fact, USDC was the only one among the major stablecoins that did not lose its parity with the dollar.
According to Circle, the two stablecoins open up potential for the spread of cryptocurrencies in traditional markets. The company cites the remittance market, which has a daily volume of US$ 6.6 trillion (R$ 33 trillion in current values).
The creation of EUROC is also part of another objective: to expand options in the second most important currency in the world. Today, euro-backed stablecoins have a paltry market cap of just $129 million.
It seems like a hefty sum in absolute terms, but dollar stablecoins amass $156 billion in market cap. That is, the euro market represents less than 0.01% of the dollar-denominated stablecoin market.
Therefore, EUROC will allow for the seamless transfer of euro liquidity on the blockchain, effectively increasing the speed of such transactions. The main rival of the new stablecoin will be EURT, which is issued by Tether Limited, the issuer of USDT.
More specifically, exchanges will enable EUROC trading as institutional traders can utilize stablecoin to take advantage of arbitrage across different exchanges and decentralized finance (DeFi) platforms.
For businesses, stablecoin will power near-instant payment infrastructures, increasing cash flow and customer bases. In practice, EUROC will allow individuals to make payments and remittances easily.
open to developers
Initially, the ETH (ETH) network will be chosen for the issuance of the new stablecoin. Circle will launch the coin on June 30 and intend to expand it to other blockchains in 2022.
The launch is backed by 13 major cryptocurrency industry companies and protocols, including Binance US, Uniswap, Fireblocks and wallet maker Ledger. The support ensures that EUROC will have a wide network of platforms where users will be able to trade and store the stablecoin.
Although the launch is scheduled for the end of June, the network is already open to developers who want to create smart contracts that use EUROC.
However, EUROC minting will only be carried out by companies that have an account at Circle and using the Silvergate Euro SEN network. Those who do not have an account will be able to access the digital currency after its launch at the end of the month.
