A euro-pegged stablecoin has just been announced by Circle Internet Financial, the organization that manages the USDC. Is called EUROC (euro currency) and its indexation on the European currency will be carried out actual reserves held with financial institutions. L’USD Coin, the fourth largest cryptocurrencyhas enjoyed a resurgence in popularity since the implosion of the UST stablecoin (from the Terra blockchain).
For a month, more and more investors – including cryptocurrency “whales” (the biggest fortunes) – have preferred to leave stablecoins including Tether (the first by capitalization) for the USDC, considered less risky. Stablecoins differ based on their protocol to maintain their indexation to the underlying asset they are tracking and their blockchain’s ability to withstand sudden movements in buy or sell volumes.
At $ 54 billion, USD Coin is no longer far behind Tether with $ 69 billion. In capitalization, only Bitcoin and Ethereum are ahead, but they are not stablecoins. The third place in the ranking goes to BUSD, the Binance stablecoin. Perhaps Euroc will soon take its place. Bad news for European projects, whose Circle token risks taking a back seat.
“One of the most reliable digital currencies”
While thousands of investors have lost their luck with the fall of the FSO, Circle knows when it’s time to play its part with a safe European stablecoin. With its model based on real euro reserves in banks, Circle differentiates its tokens from those of Earth which were based on an algorithm and protocol that played on supply and demand, with an adjacent cryptocurrency (the famous Moon).
“Euro Coin (EUROC) is a regulated stable currency, backed by the euro, issued on the same full reserve model and built on the same pillars of trust, transparency and security that have made the USDC one of the most reliable digital currencies in the world”, indicates the press release of the American company. Reserves are specified as being “A mix of liquidity and public debt only in euros”a spokesperson for the club said CoinDesk.
However, Tether Limited doesn’t get caught on the wrong foot. The company that owns the largest stablecoin in the world also owns it of a stablecoin based on the Euro, the EURt. However, its capitalization ($ 41 million) has nothing to do with its flagship token. To be able to protect your funds in a euro stablecoin, you must contact the startup Angle Labs or Lugh (EURL), launched by the Casino group in collaboration with Société Générale and Coinhouse.
1 / Get ready for #EuroCoin!
Euro Coin (EUROC) is our newest # stable currency which will start on June 30th.
We designed it with the same full-reserve model #USDC so that it is always redeemable 1: 1 per euro. See how to get it https://t.co/3PclycHxPk
– Circle (@circlepay) June 16, 2022
The problem of stablecoins in Europe
In the United States, the overflow of freedom has its limits: the example of Earth and its UST and Luna tokens. But in Europe the opposite could be criticized. Indeed, the new European cryptocurrency regulation (MiCA) tightens the screw on the side of stablecoin issuers, to the point that it will take a lot of effort for a token to be able to compete with American players like Circle.
“We won’t have to come and cry in two years when the United States dominates the market”, commented Raphaël Blochthe publisher of the newsletter The great whale. According to MEPs, stablecoins pegged to the euro could undermine the European sovereignty and its stability, but also its monetary policy. Circle will certainly have to negotiate with the European Union as well if it is to be able to democratize its token.
When does EUROC arrive?
In order to trade cryptocurrencies in EUROC, Circle’s new euro stablecoin, you will have to wait until June 30 next. At that time the stablecoin (which was based on the Ethereum blockchain) will be available and many cryptocurrency exchanges have already announced that they will integrate it into their list of available tokens.
The presence of Binance, Bitstamp, FTX and Huobi Global should be noted. Ledger or even MetaMask will accept it on their Portfolio and Uniswap, Curve, DFX or even Compound on DeFi.