Circle’s New Euro-backed Stablecoin Mimics USDC

The Euro Coin (EUROC) will launch at the end of June and emulate Circle’s USDC, the second-largest stablecoin

article-image

Circle CEO Jeremy Allaire | Source: World Economic Forum

share

key takeaways

  • Euro stablecoins hold insignificant value in today’s crypto markets, where USD-pegged stablecoins dominate
  • EUROC is expected to be supported by major cryptoasset custodians and DeFi protocols

Europe is bidding adieu to negative interest rates — and a euro-backed stablecoin is vying to be a prime beneficiary. 

Seizing the development in monetary policy, USDC’s issuer, Circle, announced Thursday a new euro-backed stablecoin called EUROC, modeled after the second-largest dollar-pegged stablecoin, which currently has a market cap of $54.4 billion. 

The plan is for Euro Coin to be backed 100% by euro-denominated reserves held in Silvergate Bank, regulated in North America, so it is redeemable 1:1 for euros. The reserves will grow based on supply and demand. 

“Euro Coin expands opportunities for payments, on-chain FX, trade finance, commerce, and broader digital asset markets use-cases. The launch is symbolic of a shift in crypto markets towards greater and greater utility value from blockchain infrastructure,” Circle’s co-founder and CEO, Jeremy Allaire, wrote in a tweet. 

The euro, shared by 19 European Union member states, is the second-largest currency in the world, just behind the US dollar, but has an insignificant representation in stablecoins. So far in 2022, the eurozone’s currency lost 11% of its value against the dollar, and some analysts predict the two currencies will reach parity later this year.

Until now, only a few stablecoins are pegged to the euro, such as Tether’s EURt — a sister stablecoin to the largest dollar-backed issue, USDT — or Stasis’ EURS. Far from the scale of dollar-pegged stablecoins, EURt has a market cap of roughly $216.1 million and EURS’ market cap sits around $130 million, according to CoinGecko.

Asked whether the launch is linked to the European Central Bank’s decision to raise the benchmark interest rate in July and September out of negative territory, a Circle spokesperson told Blockworks that the company “builds for the long term.”

“There is a clear need for a credible, sound, and regulated euro-backed stablecoin to play a role in the future of finance,” the spokesperson said.

However, on EUROC’s website, Circles addresses the issue: “How do negative eurozone interest rates impact Euro Coin? Circle assumes the interest rate risk on Euro Coin reserves, just as we do with USDC,” the company says. 

The new token will be available for everyone June 30. EUROC will launch on the Ethereum blockchain as an ERC-20 standard token — additional blockchains will be added later this year. USDC similarly began on Ethereum and has since expanded to eight other chains.

“A number of ecosystem leaders will support Euro Coin at launch, including Anchorage Digital, Binance.US, Bitstamp, Compound, Curve, CYBAVO, DFX, Fireblocks, FTX, Huobi Global, Ledger, MetaMask Institutional, and Uniswap Protocol,” the statement said. 

EUROC reserves will be audited and attested monthly by Grant Thornton, a US independent auditor, starting in July.

Asked whether the stablecoin will be compliant with future European regulation once MiCA (Markets in Crypto-Assets) framework is approved by the EU, a Circle spokesperson responded, saying that EUROC will be initially issued “within the US regulatory perimeter, with euro-denominated reserves held by US-regulated financial institutions.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

HYATT REGENCY SALT LAKE CITY

TUES, OCT. 8, 2024

Guided by the expertise of Blockworks Research Analysts team, this one day event will feature senior leaders, entrepreneurs, and developers from across the crypto industry. Attendees will have the opportunity to participate in an immersive experience to explore the latest trends, […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report cover graphics (1).jpg

Research

Wormhole is a suite of open-source, permissionless protocols used to move assets and queries across blockchains.  Despite being a common misconception, Wormhole is not just a token bridge. Nevertheless, protocols can build token bridges on top of Wormhole by leveraging the cross-chain messaging provided.

article-image

Ether is a commodity just up until the point it is not, or, ether is not a commodity just up until the point it is — whichever you prefer

article-image

The bull-market conference was filled with good feelings but little clarity on where the crypto industry is headed next

article-image

The Friday ruling was issued as a default judgment because Sameer Ramani “appears to have fled the country”

article-image

Bitcoin’s previous record high against the Euro was set in September 2021

article-image

As bitcoin ETFs grow larger and more liquid, due diligence teams at wirehouses and other investment firms are more likely to clear them, Bitwise researcher says

article-image

Sponsored

The TRON DAO team attended ETH Denver, one of the leading events in the blockchain space