Circle Internet Financial, the issuer of the USD Coin (USDC) dollar-pegged stablecoin, is set to introduce a new token by the end of the month – this one backed by the single European currency.
The Euro Coin (EUROC) will be fully backed by euro-denominated reserves held in the custody of financial institutions that fall “within the U.S. regulatory perimeter,” the company announced Thursday. One such institution will be San Diego-based Silvergate Bank, the company said.
EUROC joins a short list of euro-backed stablecoins including EURt, issued by Tether, and EURS, from Malta-based Stasis. Tether is also the issuer of the largest dollar-pegged coin, USDT, which has a market cap of more than $70 billion compared with second-largest USDC’s $54 billion.
“Euro Coin is a regulated, euro-backed stablecoin issued under the same full-reserve model and built on the same pillars of trust, transparency, and security that have made USDC one of the world’s most trusted digital currencies,” the statement said.
Circle did not specify if reserves would be made up of euros exclusively or would include other instruments like commercial paper or bonds.
Regulators and lawmakers in the European Union (EU) are in the process of setting up rules for stablecoin issuers looking to serve customers in the bloc’s 27 member states. The Markets in Crypto Assets (MiCA) legislation, set to be finalized by the end of June, includes stringent rules particularly for large stablecoin issuers.
It is unclear how a euro-backed stablecoin issued under U.S. standards might be perceived by EU leaders, and how Circle is anticipating the EU’s pending legislation. Circle had not responded to a request for comment by press time.
“[Stablecoins] are addressed by MiCA because they could indeed raise concerns regarding the EU monetary policy, stability and sovereignty,” Eva Kaili, vice president of the European Parliament told CoinDesk during an interview last year.
Euro Coin will launch on the Ethereum blockchain on June 30 as an ERC-20 standard token. Support for additional blockchains is expected later in the year. According to the announcement, several ecosystems including Anchorage Digital, Binance.US, Bitstamp, FTX, Huobi Global, Ledger and MetaMask Institutional will support the stablecoin at launch.
According to Circle’s official website, Euro Coin is initially only accessible via Silvergate’s Euro SEN network, which requires potential users to have an active banking relationship with the bank. Once trading on exchanges kicks off, people and businesses will be able to trade for and withdraw EUROC to Ethereum-compatible wallets, the website said.
The website also says that starting in July, Grant Thornton LLP, a global network of independent accounting and consulting firms, will issue monthly attestations of Euro Coin reserves.
“There is clear market demand for a digital currency denominated in euros, the world’s second most traded currency after the U.S. dollar,” Jeremy Allaire, Circle founder and CEO, said in a press statement.