Circle, the issuer behind the second largest dollar-pegged stablecoin and the fourth largest cryptocurrency in the market, USDC, announced yesterday that it will launch a fully collateralized euro-pegged stablecoin. According to a press release, the new token named Euro Coin (EUROC) will begin trading as an ERC-20 token on the Ethereum network on June 30, with additional blockchain presence expected by the end of the year.
– There is clear market demand for a digital currency denominated in euros, the second most traded currency in the world after the US dollar – said Circle co-founder and CEO Jeremy Allaire, adding that the new euro-backed stablecoin will help unlock a new era of fast, cheap, secure, and interoperable value exchange worldwide.
EUROC will use the same proven issuance and redemption model as USDC, which has a current market capitalization of $55 billion. It will also be fully backed by euro-denominated reserves held in leading financial institutions within the US regulatory perimeter, the announcement states. The stablecoin provider did not clarify whether EUROC will be backed solely by euros held in banks outside the Eurozone, or whether it will include other highly liquid financial instruments such as commercial papers and bonds.
However, Allaire’s claims of apparent market demand for euro-denominated stablecoins seem to contradict actual market signals. Tether’s EURT and Stasis’s EURS today have a combined market capitalization of only about $344 million, which is 367 times less than the two largest dollar-backed stablecoins.
