EuroCoin (EUROC) Euro-Pegged Stablecoin by Circle Goes Live: Complete Guide

Digital payments heavyweight Circle Inc. has shared the first details of its new product. The EuroCoin (EUROC) stablecoin will unlock new trading, liquidity management, and value transfer opportunities for crypto holders everywhere.

Circle Launches EuroCoin (EUROC) Stablecoin: The Basics

Amid a massive bearish recession, Circle, an operator of the second-largest stablecoin USD Coin (USDC), has unveiled plans to deploy EuroCoin (EUROC), a new asset whose price is pegged to the euro.

What do we know about this initiative so far?

  • On June 16, 2022, Circle Inc. announced the release of Euro Coin (EUROC), a Europe-pegged cryptocurrency (stablecoin);
  • The first euro coins (EUROC) will be available on the Ethereum (ETH) blockchain as ERC-20 tokens on June 30, 2022;
  • The Euro Coin (EUROC) asset release is already supported by a number of leading global crypto institutions;
  • Although the euro is the second largest reserve currency in the world, no euro-pegged stablecoin – even one issued by Tether – has managed to gain widespread adoption so far.

In this comprehensive guide, U.Today will share details of its upcoming launch and examine the outlook the EUR-backed stablecoin has during times of great market volatility.

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What is Circle Inc.?

Circle Inc. is a Massachusetts-based private financial technology company focused on developing and promoting peer-to-peer digital payments for retail and businesses. Circle Inc. (or Circle) was founded by Jeremy Allaire and Sean Neville in October 2013 in the first phase of mass cryptocurrency adoption.

Circle is one of the first fintech companies to receive a BitLicense from the New York State Department of Financial Services (NYSDFS) and a virtual currency license from UK watchdogs.

Initially, Circle focused on creating solutions for Bitcoin (BTC) storage and crypto wallets with built-in buy/sell functions (Circle Pay), but in 2020 all trading instruments were sold to Voyager Digital, listed on the TSE.

In large part, Circle is known for its USD Coin (USDC), the second-largest stablecoin, a fourth-largest digital asset by capitalization, and the fastest-growing USD-pegged asset in Web3. Launched in 2018, it is one of the core elements of the global DeFi infrastructure.

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The capitalization of the USD Coin (USDC) is over $50 billion; in the past two years, it has increased more than 40 times. The cryptocurrency is used on various platforms, including smart contract majors Ethereum, Solana, Tron, and Polygon.

The USD Coin is backed by cash, cash equivalents, and commercial paper; it is certified monthly by Grant Thornton’s accountants.

What are stablecoins?

Stablecoins (stable assets, stablecoins) are the class of cryptocurrencies (blockchain-based assets) whose prices are pegged to a particular fiat currency, index, or precious metal.

The majority of stablecoins are pegged to the US dollar as the world’s reserve currency. US Dollar Tether (USDT) from Tether Limited is the most popular stablecoin, with a capitalization of over $63 billion, as of June 2022.

Stablecoins are crucial for various economic Web3 designs; they are used as equivalents for fiat currencies to remove the need for CEX, DEX, and lending/borrowing protocols to integrate crypto-to-fiat paygates, which usually involves regulatory issues. Additionally, in the midst of bear markets, traders and holders use stablecoins as reliable and predictable “store of value” instruments.

The peg of a stablecoin to an underlying cryptocurrency can be guaranteed either by its issuer (for centralized stablecoins) or by the smart contract ecosystem (decentralized or algorithm-based stablecoins). USDT, USDC, BUSD, GUSD and TUSD are the most popular centralized stablecoins, while DAI, FEI, FRAX, MIM and USDD are the main decentralized stablecoins. In turn, decentralized stablecoins can be over- or under-collateralized.

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Picture by CoinGecko

In addition to USD-pegged stablecoins, Web3 protocols use Chinese Yuan, Mexican Peso, or British Pound stablecoins, as well as gold and silver-backed stablecoins.

At the same time, euro-backed stablecoins are highly illiquid; none of them have ever been represented in the top 100 cryptos by market cap.

Introducing Circle’s EuroCoin (EUROC), a EUR-backed next-generation stablecoin

This is why Circle’s decision to issue such an eccentric cryptocurrency made headlines in mid-June 2022.

Circle launches EUROC on June 30, 2022

According to the official announcement shared by Circle Inc. on its main website and social media accounts, the fintech operator is ready to issue Euro Coins (EUROC), a stablecoin pegged 1:1 to the Euro.

The new coin will be 100% backed by Euros held in Euro-denominated bank accounts, so EUROC will be fully redeemable. In general, EUROC will share the technical design of USDC, a flagship product of Circle.

According to his team’s statement, the EUROC asset will be backed by a group of highly reputable Circle partners, including centralized exchanges (Binance.US, Bitstamp, FTX, Huobi Global), decentralized finance (DeFi) protocols (Compound , Curve, DFX, Uniswap Protocol), industry-level custodial solutions (Anchorage Digital, CYBAVO, Fireblocks) and self-custodial cryptocurrency wallets (Ledger, MetaMask Institutional).

The first euro coins (EUROC) will be available through Circle accounts. Enthusiasts and entrepreneurs can buy them with deposits from the US cryptocurrency-based bank Silvergate. Shortly after the first minting events, the EUROC will be sent to exchanges.

Initially, EUROC will be minted on Ethereum (ETH) in the form of ERC-20 tokens. However, in the coming months, more mainstream blockchains are expected to have their own versions of the new stablecoin.

One piece, many use cases

Circle points out that EUROC is a versatile solution that will be integrated with both crypto-centric and ForEx-oriented trading platforms. As such, the EUROC list opens up incredible opportunities for CEXs of all types.

Institutional traders will be able to use EUROC as a gateway to the DeFi segment and the Web3 economy. Companies will be offered to integrate EUROC as a payment method to make their operations simpler and more user-friendly. Stablecoin integration will accelerate cash flow for B2B customers.

Last but not least, individuals are about to have one more tool to make lightning-fast cross-border transfers with virtually zero fees.

Euro-backed stablecoins: EUROC alternatives

Although no EUR-pegged stablecoin has managed to gain traction so far, some projects are trying to introduce EUR liquidity for Web3 users. Among them, EURT, EURS and agEUR are the best known.

The most prominent is Euro Tether (EURT), a “sister product” to the largest stablecoin, USDT. It is issued by Tether Limited and its market capitalization is over $218 million.

EURT is followed by Stasis Euro (EURS), which is the largest EUR-backed multi-chain stablecoin. Its $129 million supply is split between Ethereum (ETH), Polygon (MATIC), Algorand (ALGO), and xDai (STAKE) platforms.

agEUR by Angle Protocol is the largest decentralized algorithm-based stablecoin pegged to the euro. It is over-collateralized and integrated by many DeFi, including majors Curve Finance (CRV), Aave Finance (AAVE), and newer protocols OlympusDAO (OHM) and Frax Finance (FRAX). Its aggregate market cap on Ethereum (ETH) is over $52 million.

Final Thoughts

Euro Coin (EUROC) will be launched by Circle on June 30, 2022. The token is expected to go live on Ethereum (ETH) and other protocols will be added soon.

EUROC will address many use cases in decentralized finance (DeFi), commerce, cross-border transfers and digital payments in retail.

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