Stablecoin demand is increasing as businesses seek on-chain liquidity to better their operations.
Circle Internet Financial, the issuer of USD Coin (USDC), is launching a fully-reserved stablecoin tied to the euro, demonstrating to the market that demand for crypto foreign exchange services remains strong despite recent industry upheaval.
The Euro Coin, or EUROC, will be ready for trading on June 30, according to a statement issued by Circle on Thursday. Euro Coin, like USDC, is a regulated stablecoin that is completely backed by reserves – in this case, the euro. This means that for every EUROC token in circulation, an equivalent euro-denominated reserve will be maintained in custody at US-regulated financial institutions.
Silvergate Bank, a crypto-friendly financial institution, was named as the stablecoin’s initial custodian.
The EUROC stablecoin provides businesses with increased access to euro liquidity, which may be utilized for payments, trading, lending, and borrowing. The stablecoin will first appear as an ERC-20 standard token on the Ethereum blockchain.
According to the Bank for International Settlements, the euro is the world’s second largest fiat currency in terms of foreign exchange turnover (BIS). According to the BIS’ 2019 Triennial Central Bank Survey, the euro was on one side of 32% of all currency exchanges.
The euro, which was introduced in 1999, is the unified currency of the Eurozone’s 19 members. Its dominance as a trading pair is further represented in the United States Dollar Index, or DXY, which has a weighted of 57.6 percent.
Stablecoins were created to provide crypto dealers with liquidity owing to banking restrictions on digital assets. However, their usefulness has grown dramatically over time. Stablecoins currently provide services to the unbanked and underbanked people, as well as consumers in countries where access to dollars is restricted owing to capital controls or sanctions. Circle has announced dedicated corporate accounts for USDC transactions, highlighting the growing enterprise demand for stablecoin payments.
According to CoinMarketCap, the worldwide stablecoin market is currently worth more than $157.5 billion. USDC has a market capitalization of $54.2 billion.