A euro-pegged stablecoin has just been announced at Circle Internet Financial, the organization that runs the USDC. His name is EUROC (Euro coin) and its indexation on the European currency will be done through actual reserves held at financial institutions. l’USD Coin, fourth largest cryptohas enjoyed a resurgence in popularity since the implosion of the UST stablecoin (of the Terra blockchain).
Over the past month, more and more investors — including crypto’s “whales” (the biggest fortunes) — have preferred to ditch stablecoins, including Tether (the first in capitalization), for the USDC, which is considered less risky. Stablecoins differ based on their protocol for maintaining their indexation for the underlying assets they track, and the ability of their blockchain to withstand sudden moves in buy or sell volumes.
At $54 billion, USD Coin is no longer far behind Tether at $69 billion. In capitalization, only Bitcoin and Ethereum lead the way, but they are not stablecoins. The third place in the ranking goes to BUSD, Binance’s stablecoin. Perhaps the EUROC will soon take its place. Bad news for European projects, whose Circle token is likely to overshadow.
“One of the most trusted digital currencies”
While thousands of investors have lost fortunes with the fall of the UST, Circle knows when it’s time to play a part in a secure European stablecoin† With its model based on real euro reserves at banks, Circle differentiates its tokens from those of Terra which were based on an algorithm and protocol that played on supply and demand, with an adjacent cryptocurrency (the famous Luna).
“Euro Coin (EUROC) is a regulated, Euro-backed stable currency, issued on the same full reserve model and built on the same pillars of trust, transparency and security that have made USDC one of the most trusted digital currencies in the world”, reports the press release of the American company. Reserves are specified as being: “a set of cash and government debt only in euros”said a spokesperson for Circle CoinDesk†
Tether Limited, however, is not misled. The company that owns the largest stablecoin in the world also owns it of a stablecoin based on the euro, the EURt† However, the capitalization ($41 million) has nothing to do with its flagship token. To be able to protect your money in a stable euro coin, you should turn to the startup Angle Labs of de Lugh (EURL), launched by the Casino group in collaboration with Société Générale and Coinhouse.
1/ Get ready for #EuroCoin†
Euro coin (EUROC) is our newest #stablecoin which will start on June 30.
We designed it with the same full reserve model as #USDC so that it is always 1:1 exchangeable for euros. See how to get it https://t.co/3PclycHxPk
—Circle (@circlepay) June 16, 2022
The problem with stablecoins in Europe
In the United States, the overflow of freedom has its limits: the example of Terra and its UST and Luna tokens. But in Europe one could blame the opposite. Indeed, the new European Cryptocurrency Regulation (MiCA) is tightening the screw on the side of stablecoin issuers, to the point that it will take a lot of effort to make a token compete with US players like Circle.
“In two years we won’t have to cry if the United States starts to dominate the market”† commented Raphaël Blochthe editor of the newsletter The Great Whale† According to European parliamentarians, stablecoins linked to the euro can de european sovereignty and its stability, but also its monetary policy. Circle will certainly also have to negotiate with the European Union if it wants to democratize its token.
When will EUROC arrive?
To be able to exchange cryptos into EUROC, Circle’s new stable euro coin, you have to wait until June 30 next† At that point, the stablecoin (which was based on the Ethereum blockchain) will be available and many crypto exchanges have already announced that they will integrate it into their list of available tokens.
We note the presence of Binance, Bitstamp, FTX and Huobi Global. Ledger or even MetaMask will accept it on their Wallet and Uniswap, Curve, DFX or even Compound on DeFi.