• The European Union is in the process of formulating laws on the issuance of stable coins
• Circle Internet Financial revealed that the EUROC tokens can now be adopted by firms
• The current USD stable coin is pegged to the US dollar.

The issuer of the USD stable coin (USDC), Circle Internet Financial, plans to roll out a new token, the Euro Coin, by the end of June. The current USD stable coin is pegged to the US dollar.

Plans are underway to ensure that the new token will be backed by a single European-based currency.

The Euro Coin (EUROC) will be backed by reserves dominated by euros with the reserves in the custody of financial firms within the US regulatory perimeter.

How will the Euro Coin fair?

One of the euro-denominated reserves is hosted by Silvergate, a financial institution that is based in San Diego. Circle Internet Financial revealed that the EUROC tokens can now be used by firms to move, trade, and make payments in Euros.

The Euro liquidity chain will span the entire globe in terms of digital trade and payment transactions. The EUROC tokens will ensure that payments can be settled in minutes and clients can get access to crypto capital markets.

Users can trade, borrow and lend their digital assets through the EUROC stable coins. The company stated that EUROC will be hosted on the Ethereum blockchain and will be backed by different protocols.

Some of the protocols include; CYBAVO, FTX, Huobi Global, DFX, Binance, Curve, Bitstamp, Uniswap, Fireblocks, and MetaMask. Stable coins are usually backed by an array of assets such as gold, bonds, or cash.

This in return makes them a significant digital asset and a credible option in the crypto market. The Euro coin is a regulated digital asset that is built on trust, transparency, and security.

Tension in Legislation

Lawmakers and Regulatory Authorities in the European Union are in the process of formulating laws on the issuance of stable coins. The legislation seeks to ensure that customers across the 27 member states are protected from unregulated digital assets.

The MICA (Markets in Crypto Assets) legislation is set to be finalized by the end of this month. The legislation will include strict rules for stable coin issuers, especially large firms. From a political perspective, a Euro coin issued under US standards might spark a legal war in European waters.

This is because the news may not be well received by some of the EU leaders. According to Eva Kaili, the Vice President of the European Parliament, concerns could be raised on the topic. She said that the matter handled by MICA and the sovereignty and stability of the European Monetary Policy was at stake.

The Euro coin will be launched as an ERC-20 standard token on the Ethereum blockchain. The firm also claimed that additional blockchain support is to be done during the year. Once legal trading of the EUROC is in place, users will be able to trade using stable coins.

People will be able to withdraw their Euro coins and deposit them in Ethereum-based digital wallets. Circle Internet Financial Founder, Jeremy Allaire, believes that there is a clear and ready market for the Euro coin.

With the Euro being the second most traded currency in the world after the US dollar, then it is wise to have a euro-based stable coin. This comes after the recent decline in the value of the Euro against the dollar earlier in the year.