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Circle launches a euro-backed stablecoin

The central theses

  • Circle has launched Euro Coin (EUROC), a new fully collateralized stablecoin pegged to the euro.
  • EUROC is expected to start trading on the Ethereum network on June 30, with native support for more blockchains expected to follow.
  • So far, the crypto market has shown relatively little interest in euro-pegged stablecoins.

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US-based stablecoin provider Circle is launching a fully reserved stablecoin pegged to the euro.

Circle announces euro coin

Another euro-backed stablecoin is set to hit the market.

Circle, the issuer behind the second largest dollar-pegged stablecoin and the fourth largest cryptocurrency on the market, USDC, announced today that it would introduce a fully collateralized bond linked to the euro. According to the press release, the new token, dubbed Euro Coin (EUROC), will start trading as an ERC-20 token on the Ethereum network on June 30, with native support for more blockchains expected by the end of the year.

“There is clear market demand for a euro-denominated digital currency, the second most traded currency in the world after the US dollar,” said Jeremy Allaire, Circle co-founder and CEO, adding company A new euro-backed stablecoin would help “herald a new era of fast, low-cost, secure, and interoperable value exchange globally.”

EUROC will use the same proven issuance and redemption model as USDC, Circle’s $54 billion pegged stablecoin. It will also be fully backed by “euro-denominated reserves” held in “leading financial institutions within the US regulatory perimeter,” the announcement said. The stablecoin provider did not clarify whether EUROC would be backed solely by euroeuros — euros held in banks outside the eurozone — or would include other highly liquid income-bearing financial instruments such as commercial paper and bonds.

However, Allaire’s claims that there is apparent market demand for euro-denominated stablecoins appear to be at odds with actual market signals. Crypto’s other two major euro-backed stablecoins, EURT by Tether and EURS by Stasis, today have a combined market cap of just around $344 million — orders of magnitude lower than those of the two largest dollar-backed stablecoins.

Disclosure: At the time of writing this article, the author of this article owned ETH and several other cryptocurrencies.

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