Finnish company Membrane Finance has released a fully-reserved stablecoin backed by the euro, according to a Feb. 2 blog post from the company. The company is licensed by the Finnish Financial Supervisory Authority (Fin-FSA) and claims that the new ”EUROe” coin is “the first and only EU-regulated crypto stablecoin.”
United States-based Circle Inc. released its own euro-backed stablecoin in June, but its Euro Coin (EUROC) was initially custodied by Silvergate Bank, a U.S.-regulated entity.
Each EUROe token is backed by “at least one fiat euro […] In a European financial institution or bank, ring-fenced from Membrane Finance,” according to the company’s post. The company believes it will allow for “near-instant payments” at close to zero cost, in contrast to the high cost and slow speeds of traditional finance.
Membrane Finance CEO Juha Viitala expressed hope that the regulated EUROe coin would encourage more Europeans to grow their wealth through the use of decentralized finance (DeFi) applications, stating:
“Stablecoins are an essential part of the transition towards blockchain-based money infrastructure, and Europeans deserve to have a full-reserve euro stablecoin from the EU and regulated by an EU-based financial authority. EUROe hopefully brings more regular people to DeFi, who were previously unable to or worried about the volatility of cryptocurrencies.”
The EUROe will initially be available on Ethereum, with support for additional blockchain networks planned for the future.
“Stablecoins,” or crypto tokens backed by fiat currency, have had a long and illustrious history in the crypto world. The first U.S. dollar stablecoin, Tether was initially released for the Bitcoin Omni Layer, with an Ethereum version arriving in 2018. It is now the third-largest cryptocurrency by market capitalization, according to CoinMarketCap.
On Jan. 19, Circle and the team behind the Uniswap decentralized exchange released a report claiming that blockchain-based foreign exchange can reduce remittance costs by as much as 80%.