The issuer of the world’s second largest stablecoin, the USD Coin (USDC), the company “Circle Internet Financial“, has launched a fully-bound stablecoin that is pegged to the Euro (EUROC), indicating to the market that demand for cryptocurrency exchange services remains high despite the recent turmoil in the industry.
This new stablecoin is called Euro Coin or EUROC and will be available for trading on June 30.
Like USDC, Euro Coin is a regulated stablecoin that is fully backed by reserves, in this case in Euros. This means that every EUROC coin in circulation will have a Euro equivalent reserve, held in financial institutions controlled by the United States.
Silvergate Bank, a cryptocurrency-friendly financial institution, was introduced as the initial custodian for the stablecoin, EUROC.
EUROC provides businesses with broader access to liquidity in euros, which can be used for payments, transactions, lending and borrowing. The stablecoin will initially be released on the Ethereum blockchain.
About the euro
The euro is the second largest fiat currency in the world, according to the Bank for International Settlements (BIS). The BIS’s 2019 Triennial Central Bank Survey found that the euro was on one side of 32% of all currency transactions.
The euro, launched in 1999, is the common currency of the 19-member Eurozone. Its dominance as a trading pair is further reflected in the United States Dollar Index or DXY, where it maintains a weighting of 57.6%.
Stablecoins were originally designed as a way to give cryptocurrency traders access to liquidity, due to banking restrictions on digital assets.
However, their utility has expanded significantly over time. Stablecoins now serve the population that does not have bank accounts or do not engage in traditional banking transactions, as well as users in countries where access to dollars is limited due to capital controls or sanctions.
Circle recently released dedicated business accounts for USDC transactions, highlighting the growing demand for stablecoin payments among businesses.