Robert Steinadler, 9 months ago

A Euro stablecoin - Circle is launching EUROC in June

Stablecoins have suffered a lot since TerraUSD crashed. But that is not necessarily justified since not all stablecoin solutions that are available on the market are based on algorithms. In fact, the most dominant stables available are backed either by cash or by dollar-denominated assets. It was yesterday when Circle announced the start of a brand new stablecoin that may play an important role, especially in Europe.

What is EUROC and why is this stablecoin so interesting if you are living in the EU?

EUROC will start this month

Circle announced that Euro Coin will start on June 30th and will be supported by a variety of players in the crypto industry. The stablecoin will be backed by a Euro cash reserve at a 1:1 ratio. There are only a few options available when investors and traders are looking for an option to acquire and hold a tokenized Euro.

Euro Coin will be available under the ticker EUROC and is meant for several use cases and purposes. Businesses can accept EUROC for payments, institutional traders can take advantage of arbitrage opportunities and individuals can use Euro Coin to hold tokenized Euros and get exposure to that currency at a low cost.

The stablecoins smart contract will launch on Ethereum and a variety of DeFi protocols already signaled support. Among them are Compound, Curve, DFX, and Uniswap.

US-Dollar is still dominant

The crypto market is denominated in US-Dollar and that won’t change in the foreseeable future. A stablecoin based on the Euro is still an important addition since the European market is becoming more important. There are a few options available like EURT from Tether or EURS from Stasis. However, none of these solutions reached significance in the international market.

Not only that traders from non-EU countries have easier access to the Euro using a stablecoin but also European traders can benefit from holding tokenized Euros. Holding USDC, which is Circles US-Dollar stablecoin, comes with a risk if your liabilities are denominated in Euros. Holding EUROC will allow adding a stable Euro value to a portfolio without risking price fluctuations that could otherwise occur holding USDC.

Another factor is tax liabilities. In some EU countries, it will provide an advantage to trade against EUROC on decentralized platforms. Of course, this benefit will only apply in certain jurisdictions and if personal circumstances allow it.

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Circle dodged a bullet: USDC regained its peg

Mar 17, 2023

When it became clear that Circle had $3.3 billion stuck at the Silicon Valley Bank the market went wild. USDC lost its peg and was trading way below 1 US-Dollar. Bear market PTSD set in and the broader crypto media was already discussing if USDC would fail. Fortunately, things turned around shortly after the initial turmoil and Circle was made whole again. This has been a big relief for the market but needs some explanation.

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