Circle, the company behind USDC Stablecoin, is announcing the euro coin

Circle, the company behind USDC Stablecoin, is announcing the euro coin

Does the world need euro coins? There are already stable euro-denominated coins on the market. However, here is the difference in the circle. As an issuer of the well-regarded USDC, they have the reputation, knowledge and clientele to accomplish this. Even with all these advantages, it is the market that will decide if the world needs Euro Coin.

Related Reading | Crypto investors find security in stable currencies, bitcoins, massively reject altcoins

He project page, they describe it as: “Euro Coin (EUROC) is issued by Circle under the same full reserve model as USD Coin (USDC), a digitally trusted dollar currency with more than $ 54 billion in circulation.” Initially, Euro Coin will exist on the Ethereum blockchain, it will be a traditional ERC-20 that is already compatible with everything that exists.

The euro coin will be “100% covered by euros held in euro-denominated bank accounts, so they can always be used 1: 1 for euros”. The difference with regular euros is that EUROC will be “available 24/7 and moving at the speed of the Internet”. The new stablecoin debuts on June 30. “Companies can mint euro coins directly from the source by depositing euros in their Circle account using Silvergate’s Euro SEN network.”

What is the main use of euro coins?

In a recent tweet, Circle CEO Jeremy Allaire summed up the product’s value proposition. “Like the USDC, Euro Coin is issued within a regulated money transfer framework, under the same statutes governing the USDC, with full reserves in euros, with the same security, liquidity and transparency that the market expected from Circle.” Still, does it solve the problem? Two words: foreign exchange.

Returning to the project page, Circle promises “digital banking in multiple currencies and an almost current currency, where daily volume in traditional markets can exceed $ 6.6 trillion globally.” As we just read in Bitcoinist Book Club“The Bitcoin Standard” explains that this huge market is emerging only to solve the “age-old problem of lack of random desire.” As Saifedean Ammous explained, the process goes like this:

“The seller does not want the currency held by the buyer, so the buyer must first buy another currency and bear the costs of conversion. As advances in transport and telecommunications continue to increase global economic integration, the cost of this inefficiency is growing. The foreign exchange market, with a daily volume of $ 5 trillion, exists solely as a result of this inefficiency in the absence of a single globally homogeneous international currency. ”

As Circle’s numbers show, the foreign exchange market has grown since the book was published. And since we are far from living in the bitcoin standard, with a “single globally homogeneous international currency”, the foreign exchange currency will continue to grow. And here comes the Euro Coin.

ETH price chart for 06/16/2022 on Kraken | Source: ETH/USD on TradingView.com

Characteristics of the new Stablecoin

  • Where will the money that supports the operation be? “Circle will hold euros in euro bank accounts with leading financial institutions, starting with Silvergate Bank in the United States.”

Related Reading | Crypto Company Circle wants to become a global bank for digital currency

  • “Companies can use the free Circle Account to mint and buy euro coins at no extra cost.” Circle can afford to treat companies that way because they are so big and established.
  • The Circle will review the euro coin. “The Grant Thornton LLP will issue monthly certificates on euro coin reserves, starting with the July 2022 attestation. Circle will publish attestation reports on this website, with the July report available for review online by the end of August 2022.”

It is also worth noting that the main criticism the project received was because they chose Ethereum to start. However, Circle soon promises Euro Coin in other blockchains. And since the USDC exists in every blockchain that supports smart contracts under the sun, there’s no reason not to trust them.

Featured Image: Screenshot from Circle's website  | Charts by TradingView



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