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Stablecoins are cryptocurrencies pegged to a traditional fiat currency, which supports price stability and real-world usability. There are several stablecoins currently linked to the U.S. dollar. Some of the more significant ones are Tether (USDT) and USD Coin (USDC).
Circle Internet Financial, LLC is the global crypto finance company that created USDC. In June 2022, it launched a European stablecoin known as Euro Coin, or EUROC. This euro-pegged stablecoin can support euro transfers across borders quickly and cost-effectively, and claims always to be redeemable 1:1 for euros. Let's take a closer look at how this latest stablecoin by Circle works.
The Euro Coin (EUROC) is a digital currency, denominated by euros, which facilitates on-chain euro liquidity. An ERC-20 standard token tied to the Ethereum blockchain, EUROC uses the same full reserve model that Circle’s USDC uses. The price of this euro-backed stablecoin is fully supported by fiat reserves in leading U.S.-based financial institutions. This full reserve model maintains the price conversion of the Euro Coin to the euro as 1:1 at all times. While it is expected to be widely adopted by businesses and individuals alike, the future of the Euro Coin is tied to European Union regulations, which are still being worked out.