Mi. Aug 10th, 2022

Since the rise of stablecoins, the sector is firmly in the hands of US dollar-denominated stablecoins, accounting for over 95% of the total market. Above all, players like Circle, Tether and Paxos dominate the stablecoin market, all of which have pegs to the US dollar. Since Circle launched the US dollar stablecoin (USDC) in 2018, the stablecoin’s market capitalization has grown to a significant size of more than $50B. As of today, there is no euro stablecoin of a similar size. This could now change with the Euro Coin (EUROC) from Circle.

Previous to the increase of the euro key interest rates above zero in July 2022, the necessary conservative coverage, such as that carried out by Circle with the EUROC, has not been economical. However, companies can now issue fully covered euro denominated stablecoins without having to pay negative interest rates in their issuance. Until now, crypto investors and traders have generally relied on cashing out in US dollar stablecoins. Thus, those holding tokenized fiat money from the euro zone have been exposed to exchange rate risk as a result. Companies with a strong import and export business outside the SEPA area could also benefit from immediate payment processing. Thus, EUROC could become the first major euro denominated stablecoin that gains over 1% market share and grows to significant adoption and trading volume.

Furthermore, blockchain applications, and DeFi applications in particular, are likely to benefit from a euro stablecoin such as EUROC that reduces the hurdles faced by people from the eurozone. Circle is convinced that the internet needs an uber „money API“, and believes that stablecoins are the answer. Please join Joao Reginatto, Circle’s vice president of product development to discuss why stablecoins are a development platform and how they can impact the future of financial services.

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