A new generation of digital assets, called “stablecoins”, has captured the crypto community’s attention. Although stablecoin is a broad term that includes a lot of variations, the most popular forms are the fiat-collateralised versions. This means a cryptocurrency backed by real-world reserve assets, such as fiat currencies like the U.S. Dollar or Euro. These are intended to solve the volatility issues that have traditionally plagued cryptocurrencies, without impacting the features that make digital assets special, such as their immutability, transparency, security, and speed. These new generation assets might be useful to tackle the risk of the global financial crisis and subsequent erosion of money value.
Launched in July 2018 by STASIS, a financial tokenisation platform, the EURS coin is one such stablecoin, backed by the second leading global currency, the Euro, in a 1:1 ratio. The company is aimed to create a reliable digital currency that could challenge the dominance of the US Dollar as the world’s reserve currency.
Ties with the Euro can boost the efficiency of the EURS for both everyday transactions as well as complex financial transactions between institutions. This is particularly ideal for situations where difficulty in dealing with the greenback outside the US leads to high transactions costs. As of December 5th, 2019, STASIS EURO or EURS had a market cap of over 31 million euros.
A Reliable Digital Currency that Leverages Euro’s Value
The Euro is the second most popular reserve currency after the US Dollar, accounting for approximately 20% of the global foreign currency reserves in 2018. It has huge value internationally but remains underutilised in terms of its transactional capacity. Gregory Klumov wanted to use the immense value of the Euro and put it on a blockchain. This led to the creation of EURS, and on-demand, and immutable Euro-backed digital asset.
The EURS is backed by the Euro held in the company’s reserve account, in a 1:1 ratio. it is supported by a robust ecosystem of liquidity providers, exchanges, custodians, payment platforms and others.
Since the EURS is backed by a highly stable fiat currency, its volatility is much lower than that of its counterparts, which makes it an ideal hedging tool in cryptocurrency portfolios. The STASIS team created EURS due to the increasing demand for cryptocurrencies by European institutional investors. By tokenising the value of the Euro, the company wanted to create greated transparency and accountability between institutions and consumers. The EURS could bridge the gap between the cryptocurrency industry and traditional macro-economic forces. Until now, cryptocurrency trading was a space dominated by retail traders, but the fiat-backed EURS could attract institutional investors into the market and increase the total market cap for cryptos.
Creating the New Financial Globalism
The idea behind creating a Euro-based crypto asset was that not all investors use the US Dollar as the reporting currency. Stablecoins are widely used to enter and exit the cryptocurrency market since they are cheaper than converting crypto to fiat and back to crypto in a short period. This is why 75% of all Bitcoin trading takes place in exchange for Tether or USDT (a US Dollar-backed stablecoin).
However, the whole world doesn’t report income or pay taxes in US Dollars, and this creates complications in terms of reporting cryptocurrency gains and losses. This is where the EURS becomes a highly useful tool for arbitrage. It provides an excellent way to move value between crypto exchanges, without exposure to the US Dollar.
The EURS allows users to send money across borders using the blockchain instantly. Blockchain allows quick transfers, with no intermediary costs. At the same time, the system does not sacrifice a stable currency value. People living in countries with inflationary or unstable currencies can access a permanent store of value in the EURS.
A Regulated Stablecoin for the Crypto Industry
EURS is a stablecoin regulated by the Malta Virtual Financial Act, and aims to reduce liquidity and counterparty risks for both traders and the exchanges that trade it.
DSX was the first exchange to list EURS on its platform. By listing EURS-based trading pairs, DSX provides its customers with a better way of transferring fiat-like currency. Customers now have access to quick transfers between exchanges using less volatile crypto and can always buy EURS to protect themselves from price spikes.
It’s the biggest non-USD stablecoin: with €32 million in reserves and 2 Million of daily trading volume, EURS is the only stablecoin outside the USD -spectrum that received such level of recognition. It also ranks 6th among all stablecoins.
Lastly, as an EIP 20 token, EURS makes it non-compulsory to pay GAS fees on Ethereum networks if a transaction is initiated from STASIS stablecoin wallet. In case it’s initiated from another wallet, a user has to pay GAS+0,5 EURS. This makes the process of sending crypto smooth and straightforward.
Stablecoins like the EURS could ultimately become the E-money 2.0: can’t be counterfeited by cash and are more regulation-friendly, as such assets leave trails on public blockchains, which can be tracked. EURS is a cryptocurrency backed by fiat currency that is already established and trusted: the Euro. It’s an exciting time to be in the cryptocurrency industry!