In early March 2023, well-known cryptocurrency exchange Coinbase made an official announcement that it has listed the euro-backed stablecoin Euro Coin (EUROC). Another digital asset exchange followed suit just a few days later and many more are preparing to do the same.
So, what exactly is EUROC? And why is it gaining popularity?
In this article, we seek to answer those questions and take a closer look at the significance of euro-backed stablecoins to investors and the industry as whole. We also share information on how you can deposit EUROC into your Cake DeFi account and generate competitive yields.
So, let’s begin.
But first, what are stablecoins
Stablecoins are a type of cryptocurrency that aims to maintain a stable price. Unlike traditional cryptocurrencies, which can experience significant price volatility, stablecoins offer a more predictable value by being pegged to an asset or currency.
One popular type of stablecoin is the dollar-backed stablecoin, which - as the name suggests - is backed by US dollars held in reserve.
How do dollar-backed stablecoins work?
Dollar-backed stablecoins are designed to maintain a 1:1 ratio with the US dollar. For every dollar-backed stablecoin issued, there is an equivalent amount of US dollars held in reserve. This backing ensures that the value of each token remains stable and predictable.
To issue dollar-backed stablecoins, companies typically hold the equivalent amount of US dollars in reserve and issue tokens on a one-to-one basis. When users want to redeem their tokens for US dollars, they can do so directly with the issuer.
Recent issues and concerns surrounding dollar-backed stablecoins
Dollar-backed stablecoins have been gaining popularity in the world of cryptocurrency, with major players like Tether, USDC, and BUSD dominating the market. However, recent issues and concerns have emerged regarding the transparency and backing of these stablecoins.
One of the main concerns with USDT, the largest stablecoin by market capitalization, is the lack of transparency surrounding its reserves. While Tether claims that every USDT token is backed by one US dollar held in reserve, it has yet to provide a full audit or proof of these reserves.
This lack of transparency has led some to question whether Tether actually holds enough reserves to back all outstanding tokens.
In addition, Circle - the company that created USDC - filed in the fall of 2022 a complaint to the regulator New York State Department of Financial Services (NYDFS) about BUSD not being fully backed. Paxos, the company that issued BUSD, has since stopped minting the said stablecoin at the direction of the NYDFS.
The rise of EUROC
Due to the issues mentioned above, uncertainties facing US-backed stablecoins have grown and have led to an increase in the demand for euro-backed stablecoins such as EUROC.
So, what is EUROC?
EUROC is a regulated, euro-backed stablecoin issued by Circle - the same company that created USDC. On its official website, the company stated that EUROC is “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 company also claimed that the launch of EUROC “aims to further Circle’s successful work in driving the frictionless exchange of financial value and bridging crypto-native and traditional financial services.”
EUROC was made available on 30 June 2022.
What are the use cases of EUROC?
According to Circle, “businesses can use EUROC to easily move euro liquidity on-chain, accept and make euro payments globally that can settle in minutes, and access crypto capital markets for trading, borrowing, lending and more.”
Who else can use EUROC and for what purposes?
Exchanges - customers can convert local fiat currency to EUROC and offer access to new digital asset trading pairs and near-instant stablecoin FX.
Institutional traders - make markets with EUROC and take advantage of arbitrage opportunities across digital asset exchanges and the crypto ecosystem.
Ecosystem - pay for goods and services at participating merchants, transfer money quickly across borders, and use Euro Coin throughout the innovative Web3 ecosystem.
Where can I buy EUROC? How do I generate yields on it?
EUROC is supported by a growing number of ecosystem leaders including DeFiChain and is available on Cake DeFi, as well as several prominent crypto exchanges such as Coinbase, Bittrex, Uniswap, Huobi.
We’re thrilled to announce that Cake DeFi users can now deposit EUROC into their accounts and start generating yields through our YieldVault and Liquidity Mining services.
As the first CeDeFi platform to offer such services for EUROC, we take pride in providing our users with innovative ways to earn competitive returns on their investments. So, stay tuned for the official announcement and make sure to participate when these services go live. We can't wait for you to experience the benefits of earning yields on EUROC through Cake DeFi.
If you want to deposit and generate yields on your EUROC, but have not signed up for a Cake DeFi account yet, click here.
So, what are you waiting for? Sign up now and take control of your financial destiny.