Title: Euro Coin (EUROC): A Euro-Backed Stablecoin
Keywords: Euro, EUROC, stablecoin, cryptocurrency, blockchain, coin, Circle.
In this article, we shall highlight the European Coin, its use cases, and other features of this stablecoin.
Let’s begin!
What Are Stable Coins?
Stablecoins are crypto tokens whose values are tied and equivalent to the value of another currency or financial instrument. The aim of developing stable coins is to provide an alternative to the highly volatile digital assets.
Most stable coins are pegged to currencies like the dollar and Euro. These stablecoins maintain price stability by keeping reserve assets as collateral or using algorithmic formulas to control supply.
The three main types of Stablecoins include Fiat-collateralized, Crypto-collateralized, and Algorithmic stablecoins. The newly launched Euro coin is a fiat-collateralized stablecoin.
The Euro Coin (EUROC)
Circle, the foremost issuer of stablecoins, has announced that a new stablecoin will be launched on the blockchain network on June 30, 2022. The new Euro-backed stablecoin will be called EUROC.
EUROC will be pegged to Euro and backed by Euro-dominated reserves held by the United States-regulated financial institutions. According to Circle, The EUROC stablecoin will be issued under the same full-reserve model as USDC.
While EUROC will be backed by reserves just like the USDC stablecoin, a reserve in Euros will be held in custody at financial institutions. For each EUROC token transacted, a reserve will be held in custody at the bank subject to the United States regulatory oversight.
The EUROC stablecoin will be launched on the Ethereum blockchain as an ERC-20 token for its first operation year. However, further blockchain support will be integrated later on.
EUROC is not the first stablecoin backed by Euro, stablecoins like EURt from Tether and Stasis Euro (EURS) from Malta-based Stasis are also backed by Euro.
It is worthy of note that as of Mid June 2022, there are just $129 million in Euro-dominated stablecoins compared to $156 billion in dollar-dominated stablecoins.
There are expectations that this newly launched Euro coin will raise the market size of Euro-based stablecoins and increase access to opportunities to earn, trade, pay, and build on a stable Euro digital currency.
Use Cases Of EUROC
EUROC is a new stablecoin that will be launched by the end of June 2022. It is expedient to highlight the basic use of this Euro-backed stablecoin. They are;
Exchanges
The development of the Euro coin will enable customers, users, and holders of EUROC to convert Euros to Euro coins. The token will enable you to access and exchange new digital asset trading pairs alongside near-instant stablecoin foreign exchange.
Businesses
The Euro coin is a valid means of transaction and business operations. Businesses that accept EUROC have the possibility of expanding their customer base and getting faster cash flow.
With the Euro coin, you can seamlessly make payments to suppliers, vendors, and employees across the globe.
Institutional Traders
Euro coin opens an array of opportunities across digital asset exchanges and decentralized finance (Defi). Traders that make their market with the Euro coin will take advantage of the arbitrage opportunities available in the blockchain and crypto markets.
Individuals
The EUROC will be acceptable everywhere. As an individual holder of the Euro coin, you can pay for goods at participating merchants, transfer money across several locations and use the Euro coin across the Web3 ecosystem.
In the blockchain ecosystem, the Euro coin is getting overwhelming support from the industry players and before its launch, the stablecoin will be supported by exchanges such as Binanc.US, Bitstamp, FTX, and Huobi.
Decentralized Finance (Defi) protocols such as Compound, Curve, DFX, and Uniswap protocol are also supporting EUROC. The Custodians offering their support include Anchorage Digital, CYBAVO, and Fireblocks.
Lastly, Ledger and MetaMask institutional are the blockchain wallets that will support EUROC at its launch.
Conclusion
Circle, the issuer of Euro coins is known for designing stablecoins with a full reserve model. A similar stablecoin issued by Circle, the USD Coin now has more than $54 billion in circulation and there are expectations that the new Euro coin will surpass this market value.
This is not the first stablecoin that will be backed by a currency and have its full reserve in a financial institution. However, it is expected to be as strong as possible and remains equivalent to a Euro. That is 1EUROC: 1 EURO.
Recently, we saw how the Terra USD collapsed and how Tether dropped below its dollar equivalence, it is expected that these issues have been addressed in EUROC by giving it a 100% Euros reserve backing.
